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2018 (7) TMI 1355 - HC - VAT and Sales TaxInput Tax Credit on Capital Goods - Section 19(3)(b) of the TNVAT Act - denial of credit on the ground that the claim was made after the expiry of the time stipulated in Section 19(11) of the TNVAT Act, which states that input tax has to be claimed before the end of the financial year or before 90 days from the date of purchase, whichever is later. Held that:- Section 19(3)(a) of the TNVAT Act speaks about the entitlement of an assessee for credit in respect of purchases of capital goods. The entitlement is as per the manner prescribed under the TNVAT Rules, viz., Rule 10(4). Section 19(3)(b) of the TNVAT Act speaks about deduction of such input tax credit that may be allowed to be liable after the commencement of commercial production and over a period of three years in the manner as prescribed. After the expiry of three years, the unavailed credit shall lapse to the Government - Rule 10(4)(b) of the TNVAT Rules prescribes the manner in which the credit shall be allowable after commencement of commercial production and over a period of three years. The Rule states a dealer shall be entitled to avail up to 50% of the credit in the same financial year and the balance credit before the end of the third financial year. A registered dealer, who has purchased capital goods shall be allowed input tax credit in terms of Rule 10(4) provided, he gives an intimation within 30 days from the date of commencement of commercial production and the tax leviable shall be not more than 50% in the same financial year and the balance before the end of the third financial year. Thus Section 19(3) read with Rule 10(4) of the TNVAT Rules speaks only about the entitlement. Section 19(11) does not carve out any distinction between the type of goods purchased by the dealer on which there is a claim for input tax credit, but refers to any transaction of taxable purchase in any month. Thus, if a dealer fails to claim input tax credit in respect of any transaction of taxable purchases, in any month, the legislature has given time to the dealer to make the claim before the end of the financial year or before 90 days from the date of purchase, whichever is later. Section 19 of the TNVAT Act, being a complete code by itself, cannot be truncated in the manner sought to be done by the petitioner - The prescription under Rule 6 of the TNVAT Rules is mandatory, which the dealer has to comply with. Therefore, such maintenance of input tax adjustment account can have no impact on the time limit prescribed in the statute for claiming input tax credit. Thus, the distinction, which has to be borne in mind is that Section 19(3) deals with entitlement and Section 19(11) deals with availment, which prescribes not only a procedure but also an outer time limit. Thus, the interpretation given by the respondent in the impugned order is perfectly valid and legal. Petition dismissed - decided against petitioner.
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