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2019 (7) TMI 160 - HC - VAT and Sales TaxReversal of input credit u/s 11(7) and (8) of the KVAT Act - sales at discounted price/subsidized price - suppression of purchase made was denied by assessee holding that these occured on the day of death of his father as the business remained unattended - case of assessee is that all these were truly accounted and was reflected in the returns filed - Section 11(3) of the KVAT Act - interpretation of the term 'subsidized price' used in the 2nd proviso to Section 11(3). HELD THAT:- Section 11(3) of the KVAT Act provides that, input tax credit shall be allowed to a registered dealer in respect of a returned period against the output tax payable by him for such period and the dealer shall pay to the Government the balance of output tax in excess of the input tax credited in the manner prescribed. On the facts of the case, the assessee closed down the business after selling the stock of goods at a reduced price. The intend and purport of the 2nd proviso introduced to Section 11(3) is to restrain the assessee from claiming input tax credit over and above the output tax collected. That is why it is insisted that the claim of input tax credit shall not exceed the output tax payable, in case the goods are sold at subsidized price. The interpretation given by the Tribunal that the word 'subsidized price' contained in the second proviso to Section 11(3) can only be construed as a sale in which the Government have provided subsidy to support the price, cannot be accepted as a correct interpretation. The term 'subsidized price' used in the 2nd proviso to Section 11(3) will carry within it any sale made by the dealer at a subsidized price below the purchase value of such goods - we are of the opinion that the assessee in the case is not entitled to claim input tax credit over and above the output tax returned with respect to the goods sold at the reduced price. The question raised in this regard is answered in favour of the revenue and against the assessee. The impugned order passed by the Tribunal to the extent it held that the assessee is entitled for input tax credit demanded beyond the limit of output tax conceded is hereby set aside - revision petition allowed.
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