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2019 (3) TMI 439 - MADRAS HIGH COURTAvailing Input Tax Credit (ITC) wrongly - Whether the input tax credit availed by the assessee on the purchase of cement, which was used for the manufacture of RCC pipe can be curtailed, while they availed the benefit of a notification issued by the Government in G.O.Ms.No.79, Commercial Taxes and Registration (B2), dated 23.03.2007 whereby, the Government reduced the rate of tax payable by any dealer on the sale of certain goods under the TNVAT Act? Held that:- In the instant case, the assessee manufactures RCC pipes. For the assessee to be entitled to the reduced rate of tax at 4%, he should not avail the input tax credit on the purchase of same. This is a restriction or a condition specified in the notification. The Court cannot substitute words, nor delete any portion of the notification and redo the same as interpreted by the assessee. Very recently, the Hon'ble Supreme Court has held that strict interpretation has to be given to any exemption notification and the interpretation should lean in favour of the Revenue. Therefore, the contention advanced by the assessee does not merit acceptance. Penalty u/s 27(4) - Held that:- The Assessing Officer has clearly recorded a finding as to how the assessee has wrongly availed the input tax credit - the case would fall under Section 27(2) of the TNVAT Act and the penalty under Section 27(4) is automatic - penalty upheld. Tax case revision dismissed - decided against assessee.
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