Verification Before Demand

The Court examined whether ITC disallowance could be sustained when the taxpayer had already reversed and re-availed the credit correctly prior to issuance of the show cause notice. 

It held that once the Revenue itself admits such factual correction, failure of authorities to consider the same renders the adjudication unsustainable. 

The impugned orders were quashed and the matter remanded for fresh adjudication. The ruling reinforces that verification of factual compliance is fundamental before confirming tax demands.