2016 (9) TMI 408 - SUPREME COURT

Restriction on input tax credit - reversal of credit when sale price is lower than purchase price - Scope of sub-section (20) of Section 19 of the Tamil Nadu Value Added Tax Act, 2006 - retrospective or prospective effect - Held that: - It is a trite law that whenever concession is given by statute or notification etc. the conditions thereof are to be strictly complied with in order to avail such concession. Thus, it is not the right of the 'dealers' to get the benefit of ITC but its a concession granted by virtue of Section 19. - As a fortiorari, conditions specified in Section 10 must be fulfilled.

Challenge to constitutional validity of sub-section (20) of Section 19 of VAT Act has to fail. When a concession is given by a statute, the Legislature has power to make the provision stating the form and manner in which such concession is to be allowed. Sub-section (20) seeks to achieve that. - Decided against the assessee.

Validity of amendment with retrospective effect - Held that:- The entire gamut of retrospective operation of fiscal statues was revisited by this Court in a Constitution Bench judgment in Commissioner of Income Tax (Central) – I, New Delhi v. Vatika Township Private Limited [2014 (9) TMI 576 - SUPREME COURT]

The amendment in-question fails to meet these tests as pronounced in the above decision. - Such a provision, therefore, cannot have retrospective effect, more so, when vested right had accrued in favour of these dealers in respect of purchases and sales made between January 01, 2007 to August 19, 2010. Thus, while upholding the vires of sub-section (20) of Section 19, we set aside and strike down Amendment Act 22 of 2010 whereby this amendment was given retrospective effect from January 01, 2007. - Decided partly in favor of assessee.