TMI Blog2010 (9) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... fication of getting more benefit than what is not provided under the proviso (d) of sub-section (3) of section 20. Clause (1) of sub-rule (3) is not required to be provided for the purpose of determination of input-tax credit in view of the clear provision in proviso (d) of sub-section (3) of section 20. Therefore, for the aforesaid reasons, we do not find any merit whatsoever on any one of the legal contentions urged on behalf of the petitioners. The writ petitions are devoid of merit and are accordingly dismissed. - W. P. (C) Nos. 11772, 11938, 11939, . 11940, 11941, 12634, 12635, 12636 of 2009 & 4941, 5933, 6068, 8736, 9088 of 2010 - - - Dated:- 6-9-2010 - GOPALA GOWDA V. C.J. AND MAHANTY I., J. V. GOPALA GOWDA C.J. This batch of writ petitions have been filed by the registered dealers urging common facts and grounds praying to grant certain reliefs which will be extracted in the later part of the judgment. By consent of learned counsel for the parties, we have heard these matters together and pass the common order. Certain relevant facts are stated for the purpose of examining the rival legal contentions urged in these writ petitions with a view to find out as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that the OVAT Act, 2004 was brought into operation with effect from April 1, 2005 and since then they have been submitting returns and making claims in accordance with the provisions of the OVAT Act. The State Legislature amended the provisions of the law by inserting proviso (d) to sub-section (3) of section 20 of the OVAT Act with effect from June 1, 2008. It is the case of the petitioners that input-tax credit is to be regulated and determined under the provisions of section 20 of the Act. A bare reading of section 20 of the OVAT Act would reveal that input-tax credit is to be computed in accordance with the provisions. The opening sentence of section 20 states subject to other provisions of this Act and mandates about the method of calculation of payment of net input-tax credit and further it mandates that the determination of the input-tax credit is to be made in accordance with the provisions as laid down in the said section, in respect of all sales or purchases taxable under the OVAT Act, other than sales or purchases of goods specified in Schedule B and Schedule C. It is the further case of the petitioners that sub-section (2) of section 20 envisages that inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be calculated limiting to the extent of Central sales tax payment where the dealer effects sale of goods in course of inter-State trade and commerce. Clause (b) of sub-rule (3) of rule 11 prescribes that if the sale is made which falls under clause (a), the registered dealer making such sale, shall furnish the particulars of sales corresponding purchase of goods made from registered dealer inside the State while submitting return under the Act. The said clause requires that where a dealer effects sales in the inter-State trade and commerce, he shall file the return and furnish the particulars of such sales and corresponding purchase of goods made from the registered dealer inside the State complying with the requirements as laid down in annexure II of form VAT 201. Sub-clause (c) of sub-rule (3) of rule 11 provides that if the sale of the goods falls within the scope of clause (a), results in Central sales tax payable less than the corresponding input tax on the corresponding purchase of goods, the input-tax creditable for the tax period shall be reversed by the amount calculated in box provided in serial No. 5 of annexure II in the return. The aforesaid sub-clause (c) postulates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment as input-tax credit only to the extent of the Central sales tax payable. Such limitation of credit is unauthorized, illegal and violative of articles 14 and 265 of the Constitution. In the guise of exercise of power under section 94 of the OVAT Act, framing of the rule is beyond the conferment of power in relation to matters provided under section 94. Therefore, they have prayed to grant the reliefs sought for in the writ petitions. Counter statement is filed in W.P. (C) No. 11772 of 2009. The same is adopted in all these petitions justifying the framing of the impugned rule and the form traversing the petition-averments contending that framing of the rule is in conformity with section 94 of the OVAT Act. It is contended by them that the legal contentions urged in the writ petitions by the registered dealers are on account of misreading of sections 20, 18 and also the definition provisions of input tax and input-tax credit as given under section 2(26) and 2(27) of the OVAT Act. The framing of sub-rule (3) of rule 11 of the Rules is in conformity with the proviso (d) of sub-section (3) of section 20 of the Act as it has got application to all manufacturers. From a care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. The power of prescription of rule by way of subordinate legislation by the State Government is derived from the power conferred under section 94 of the Act. The same has been framed to give effect to the provisions of section 20(3), proviso (d). Therefore, the same cannot be said as unguided, unfettered or ultra vires section 20 of the Act or articles 14 and 265 of the Constitution of India. Therefore, they have requested for dismissal of all the writ petitions as the same are without any merit. We have heard learned senior counsel Mr. J. Patnaik, Mr. S.C. Lal and Mr. Pati on behalf of the registered dealer-petitioners extensively. We have also heard learned standing counsel Mr. Patnaik on behalf of the oppositeparties with reference to the abovesaid legal contentions urged in their petitions and the counter statement in support of their respective claim and counter claim. On the basis of the aforesaid rival legal contentions urged by the learned senior counsel and by the Government Advocate and the standing counsel on behalf of the Commercial Taxes Department, the following points would arise for our consideration: (i) whether the framing of rule 11(3) is ultra vires secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a business, (ii) transaction of sale or purchase of capital goods pertaining to any trade, commerce, manufacture, adventure, concern or transaction shall be deemed to be a transaction comprised in business, (iii) purchase of any goods, the price of which is debited to the business and sale of any goods, the proceeds of which are credited to the business shall be deemed to be transactions comprised in busi ness. Proviso (d) of sub-section (3) of section 20 reads as under: (d) the input-tax credit on purchase when sold in course of inter State trade or commerce shall be allowed only to the extent of the Central sales tax payable under the Central Sales Tax Act, 1956 (74 of 1956). The definition of business as in clause 2(7) is an inclusive definition and brings within its ambit any trade, commerce or manufacture. It is an undisputed fact that the petitioners who are registered dealers are manu facturers. It is also an undisputed fact that on the goods/raw materials purchased by them to use as input to manufacture a new goods, they are required to be paid purchase tax. The definition of input is very clear that any goods purchased by a dealer in the course of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in exercise of statutory power under section 94 for execution of the provisions of the Act cannot be said at any rate as excessive, unguided and unfettered exercise of power by the State Government. When section 20(3), proviso (d) makes it explicitly clear as to what is the extent of statutory right given to the dealer for grant of input-tax credit. Further the particulars required to be furnished in annexure IIA of form VAT 201 also cannot be termed as arbitrary. The said particulars/information are required to be furnished by the traders for the purpose of availing of input-tax credit while selling the manufactured goods in the course of inter-State sale. That is what is provided in clauses (a) to (e) of sub-rule (3) of rule 11. The strong reliance placed upon the clause (f) of sub-rule (3) of rule 11 and the particulars provided in annexure IIA form VAT 201 cannot be made use of for the purpose of justification of getting more benefit than what is not provided under the proviso (d) of sub-section (3) of section 20. Clause (1) of sub-rule (3) is not required to be provided for the purpose of determination of input-tax credit in view of the clear provision in proviso (d) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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