rejection of goods

you should take the credit of the input arrived in the factory and cleared it as such from the factory gate after reversing the credit taken.

we have not made any entry of the goods ,as the truck entered in our factory ,we checked the material for quality and due to inferior quality ,rejected the material. Therefore the party is asking us to stamp the tax invoice with our company seal and sign it by writting "goods rejected due to inferior quality" . is this the correct method of doing it.

I my view If your company has not inwarded the material in the inventory then the material can be send back on the parties invoice by giving appropriate remark

No other documentation is necessory

we have not passed any entries in our store ledger nor in the DSA book or any kind of inward entries,can we reject the material by just stamping and passing the remark on the invoice.please advice

You should made all the entries  and cleared the material to your supplier with proper documents(your invoice - cleared as such) with duty (reversal of duty)