Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2014 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (7) TMI 889 - HC - VAT and Sales TaxChallenge to the clarification of the first respondent in Reference - powers to issue a circular or clarification under the TNVAT Act - Input tax credit - Capital goods - Held that:- The definition of capital goods only specifies that the goods which are used for the purpose of manufacture can be categorized as capital goods. The tax paid for the purchase of capital goods used in the case of manufacture is entitled to be claimed back as ITC - The petitioner herein is involved in the manufacturing of industrial boilers. Huge metals can only be carried by crane for manufacturing boilers. When the cranes are exclusively purchased by a dealer to be used for manufacturing activity, the same would definitely fall under the definition of capital goods. However, when the cranes purchased as rented out to others or used for any other purpose other than for manufacturing activity, the same cannot be treated as capital goods. Therefore, the classification of cranes would have to be dealt with on the facts of each case. First respondent had no powers to issue any circular or clarification. Further section 48 A was introduced with effect from 27.09.2011. Any order by the State Level Authority for Clarification and Advance Ruling under Section 48 A can only be made regarding any clarification on rate of tax on an application by a dealer. Even there, the first respondent has no powers to individually or independently issue any clarification on rate of tax. It is also clear that the first respondent does not have any authority to issue circulars or clarifications on any other matters other than rate of tax. The first respondent cannot use the circulars or clarifications to overcome the provisions of the statute. Any interpretation which was not intended by the legislature also cannot be introduced by way of circulars or clarifications. Any change in the statute can be brought in only by way of amendment. The levy of tax must be within the four corners of law and must not be based on surmises and conjunctures. Any act contrary to the provisions of the taxing statute would be hit by Article 265 of the Constitution of India. Therefore, the impugned circular issued without authority is set aside. The petitioner is directed to submit their objections within four weeks from the date of receipt of a copy of this order and the second respondent shall consider the objections and pass orders independently sticking on to the provisions of the Act - Decided in favour of assessee.
|