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2020 (2) TMI 683 - HC - VAT and Sales TaxAdjustment of input tax credit for making pre-deposit - fulfilment of condition under 2nd proviso to Section 51 (wrongly mentioned as 52 in the prayer of the Writ Petitions) of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- Input Tax Credit is not intended for being utilised for payment of pre-deposit. At the same time, as per Section 19(18) of the TNVAT Act, 2006, excess input credit, if any, after adjustment under Sub-Section shall be carried forward for the next year or refunded in the manner as may be prescribed. As per Rule 10(10)(b) of the Tamil Nadu Value Added Rules, 2007, in case where Input Tax Credit as determined by the Assessing Officer for any registered dealer, for a year, exceeds the tax liability for that year, it may be adjusted and the excess Input Tax Credit may be adjusted against any arrears of tax or any other amount due from him. If there are no arrears under the Act, or after adjustment there is still an excess of Input Tax Credit, Assessing Authority shall serve Form P upon such dealer. Rule 11 of the aforesaid Rule contemplates the issue of reference of such amounts - excess Input Tax Credit is to be refunded back if after adjustment there is balance available. Therefore, it is evident that if the amount of credit can be refunded, they can also be adjusted towards pre-deposit of the tax liability for the purpose of Section 51 of the TNVAT Act, 2006. The contention of the petitioner that for the purpose of pre-deposit under Section 51 of the TNVAT Act, 2006 an assessee can utilise the excess Input Tax Credit provided accepted, the aforesaid Input Tax Credit itself is not the subject matter of the dispute or where any notice has been issued to deny such tax credit - To deny such right would amount to improper denial of right of appeal to an assessee - petition allowed.
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