2023 (1) TMI 986 - HC - CST, VAT & Sales Tax
Reversal of Input tax Credit - on purchase of R.E.P. license which is goods, tax has been paid by the applicant - When a dealer after purchasing any import license from open market and after paying tax at the rate of 4% as per the notification and having used the license for import of chemical and thereafter selling the goods so imported by him in furtherance of his business is entitled for the benefit of I.T.C. or not?
HELD THAT:- Section 13 of the Act of 2008 is charging section which deals for grant of Input Tax Credit to a dealer liable to pay tax subject to conditions given in Column (2), in respect of all taxable goods, where such taxable goods are purchased on or after date of commencement of the Act, are allowed credit of the amount, as Input Tax Credit, to the extent provided in Column (3) of the table - if goods purchased are used in manufacture of any goods and where such manufactured goods are sold in the course of export of goods outside the territory of India or any taxable goods manufactured are sold either inside the State or in the course of inter- State trade or commerce, a dealer is entitled to full amount of I.T.C.
In the instant case, the claim of assessee-dealer was solely rejected on the ground that he had not dealt with the sale and purchase of license which he had purchased from open market and was thus not entitled to claim I.T.C. The authorities as well as the Tribunal recorded a finding that no manufacturing activity was carried out by the assessee after importing the goods from outside the country using the import license.
In VIKAS SALES CORPORATION AND ANOTHER VERSUS COMMISSIONER OF COMMERCIAL TAXES AND ANOTHER (AND OTHER APPEALS AND WRIT PETITIONS) [1996 (5) TMI 363 - SUPREME COURT], the Apex Court had already held that grant of license by Licensing Authority to the registered exporter is not a sale. The sale is when the registered exporter or purchaser sells it to another person for consideration - In the instant case, the assessee-dealer had purchased import license from another person after paying the taxes as was applicable and the licence, which was in a intangible form was converted into a tangible form by the assessee importing chemical from outside the country.
The findings recorded by the Tribunal to the extent that I.T.C. can only be availed in case the assessee-dealer selling the licence itself and not importing the goods using the said import license and reselling the same in the market is not correct - revision allowed.