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2022 (3) TMI 1054 - HC - VAT and Sales TaxRefund of excess Input Tax Credit - purchases from dealers covered by the Deferment Scheme, 2005 notified under section 62 of HP VAT Act - presumptive taxation - HELD THAT:- Sub section 7(c)(iii) of section 11 of the Act specifically bars the claim of ITC by a purchasing dealer who has purchased goods in the State from a registered dealer who either opted to pay lump-sum amount in lieu of tax by way of composition under section 16(2) or presumptive tax under section 7, therefore, glance at provisions of section 7 and section 16(2) of the Act becomes necessary to assess the applicability of said provisions in the facts of the case - In the facts of the case in hand, there is nothing to suggest that the selling dealer i.e. M/S Samana Industries had opted to pay presumptive tax or had ever paid it. Applicability of section 16(2) - HELD THAT:- From the conjoint reading of Section 7 and Section 16(2) of the Act and Rule 45 of the rules, it is clear that a registered dealer under the Act has option to pay presumptive lump-sum tax under Section 7 or by way of composition under Section 16(2) in the manner as prescribed in Chapter VI of the Rules. Importantly, by virtue of Rule 45(6), the dealer opting to pay the lump-sum is not liable to issue tax invoices under Section 30 - It is not understandable as to under what assumption, learned Tribunal has upheld the order of the Commissioner by placing reliance upon Section 16(2) of the Act. Again, there is nothing on record to suggest even remotely that the selling dealer M/s Samana Industries Ltd. had opted to pay lump-sum tax for the year 2010-11. The findings recorded by learned Tribunal in this behalf can easily be termed to be non- speaking being bereft of any reasoning. The lump-sum payment of composite tax under Section 16(2) of the Act in no way can be equated with the powers of State under Section 62(5) of the Act as both have separate and distinct fields of operation. There cannot be any overlapping between the two provisions, therefore, disallowance of ₹ 17,06,715/- payable from ITC to the petitioner by invoking the provisions either of Section 7 or Section 16(2) of the Act is wholly illegal and against the mandate of law - It is held that the payment of presumptive tax under Section 7 or lump-sum tax by way of composition under Section 16(2) of the Act read with Rules 45 to 50 of the rules have their application in the specific field expressly contemplated in the Act and cannot be expanded to include deferment of tax notified under Section 62(5) of the Act. There is no dispute on facts that the selling dealer i.e. M/s Samana Industries Limited had initially availed the benefit of deferred payment subsequently converted to upfront payment of 65% of the payable amount by virtue of provisions of notification dated 26.07.2005 - deficit, if any, of 35% in receipt of tax suffered by the State was its voluntary Act under a scheme formulated by it. Such deficit to the State coffers cannot be made basis for penalizing the petitioner who was not at fault. The petitioner was entitled to refund of entire amount of ITC to the tune of ₹ 82,15,821/-. Dis-allowance of ₹ 17,06,715/- from payable amount of ITC to the petitioner as ordered by learned Commissioner vide order dated 28.05.2012 and upheld by learned Tribunal vide order dated 29.08.2015 is held to be wrong, illegal and against the provisions of VAT Act and rules framed thereunder - the instant revision petition is allowed.
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