2016 (11) TMI 978 - HC - VAT and Sales Tax

Input Tax Credit - The respondent-assessees are carrying on separate business but they sold the goods at a rate lower than the price shown in the VAT invoice keeping in view the discount/incentive received by them from the respective dealers - Held that - reliance placed on the decision of the case of Assistant Commissioner Circle-A Vs. Assistant Commissioner Circle-A Commercial Taxes Bharatpur (Rajasthan) and others Versus Bhagwati Building Material Store and other 2016 (10) TMI 13 - RAJASTHAN HIGH COURT where it was held that Input Tax Credit is allowable as per VAT invoice irrespective of sale value of the goods. ITC allowed - petition dismissed - decided in favor of respondent-assessee.

Summary

Issues:
Input Tax Credit (ITC) claimed based on VAT invoice when goods sold at a lower price due to discounts/incentives.

Analysis:
The judgment addresses the common question of Input Tax Credit (ITC) claimed by the assessee based on VAT invoices, despite selling goods at a lower price due to discounts or incentives received from dealers. The Assessing Officer initially disallowed the ITC, arguing that selling goods below the price on the VAT invoice while claiming ITC is not permissible. However, both Appellate Authorities found the assessee's claim to be valid and allowable. The Revenue challenged this decision, leading to the petitions being considered together due to the common issue raised.

The counsel for the assessee highlighted previous instances where the court had ruled in favor of allowing Input Tax Credit as per the VAT invoice, regardless of the actual sale value of the goods. Reference was made to a specific judgment in the case of Assistant Commissioner Vs. M/s. Bhagwati Building Material Store and others. The Revenue's counsel failed to differentiate the current case from the precedent cited by the assessee.

Considering the consistent stance of the court on similar matters, as evidenced by past judgments such as CTO Vs. M/s. Sharda Agencies and CTO Vs. Narendra Kumar Govind Prasad, where the court upheld the allowance of ITC based on VAT invoices despite lower sale prices, the court found the issue to be settled law. Consequently, all petitions lacking merit were dismissed based on the established legal position.