Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2017 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 1617 - HC - VAT and Sales TaxInput tax credit - whether the petitioner can be denied input tax credit for the period from April 2007 onwards and whether the respondent was right in restricting it for a period of 90 days? - Held that - The question of restricting the input tax credit for 90 days is incorrect. If such is the situation, it goes without saying that the petitioner would be entitled to input tax credit for the entire period, as the petitioner has paid higher rate of tax - The decision in the case of CKG. Agencies Versus Assistant Commissioner (CT) FAC Avinashi Assessment Circle, Coimbatore 2010 (4) TMI 1022 - MADRAS HIGH COURT , would squarely apply to the facts of the case, wherein it has been held that the assessee was entitled to avail benefit of input tax credit, once the turnover exceeds ₹ 50,00,000/- limit - petition allowed.
Issues involved:
1. Validity of notice issued to the petitioner under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) for remittance of balance value-added tax and penalty. 2. Denial of input tax credit to the petitioner for the period from April 2007 onwards and the correctness of restricting it for 90 days. 3. Interpretation of Section 3(4)(b) of the TNVAT Act in relation to the petitioner's case. Issue 1: Validity of Notice: The petitioner, a registered dealer under the TNVAT Act, challenged a notice dated 20.10.2008 demanding remittance of balance value-added tax and penalty. The petitioner contended that the notice was issued without providing an opportunity to present objections, rendering it legally flawed. The respondent referred to Section 3(4)(b) of the TNVAT Act to justify the notice. However, this section was introduced after the petitioner filed the revised return, making the notice legally questionable. Issue 2: Denial of Input Tax Credit: The crucial question was whether the petitioner could be denied input tax credit beyond 90 days and if the restriction was valid. The court cited a previous case where it was held that once the turnover exceeds ?50,00,000, the dealer is entitled to input tax credit for the entire period. The court emphasized that the Commissioner's clarification supported this position, stating that if turnover exceeds ?50,00,000 mid-year, the dealer must pay a higher tax rate but is eligible for input tax credit from the beginning of the year. Issue 3: Interpretation of Section 3(4)(b) of the TNVAT Act: The court analyzed the applicability of Section 3(4)(b) to the petitioner's case and concluded that the impugned notice was invalid. Referring to a circular by the Commissioner, the court held that if turnover exceeds ?50,00,000 during the year, the dealer should pay a higher tax rate but is entitled to input tax credit from the start of the year. Consequently, the court set aside the notice, ruling it to be legally flawed and quashing the impugned order. In conclusion, the judgment highlighted the importance of adhering to legal provisions and established precedents in matters concerning tax liabilities and input tax credit entitlements under the TNVAT Act.
|