2011 (6) TMI 718

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..... for the respondent ORDER The connected revision cases are filed by one and the same assessee challenging the orders of the Kerala Value Added Tax Appellate Tribunal confirming the assessment on sale of deep freezers and disallowance of input tax credit claimed under section 11 of the Kerala Value Added Tax Act, 2003 (hereinafter referred to as, "the Act" for short). We have heard learned couns .....

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..... tax credit,  which is the tax paid on the purchase as a credit while determining the petitioner's liability for tax. The first appellate authority as well as the Tribunal rejected both the claims by holding that supply of deep freezers by the petitioner to the distributors is sale of capital goods, which is not entitled to depreciation under section 11(5)(o) of the Act. It is against thes .....

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..... that there is no sale of deep freezers to the distributors because in fact it is a sale on deferred payment basis and the cost is recovered at 25 per cent each for the four years from the date of delivery. In our view, the transaction is a pure sale but on credit basis payable in four instalments. The lower authorities including the Tribunal rightly found that the agreement does not reflect the n .....

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..... the Act. Deep freezers purchased and delivered are used for storage of ice cream by the distributors, and so much so, it is capital goods for the distributors; and when the petitioner is engaged in purchase and sale of the same to their distributors the petitioner was engaged only in trading of the said goods. So much so, the goods are not capital goods at the hands of the petitioner, who has purc .....

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..... n excess of the output tax payable for the sale of the goods. It is a matter to be seen whether the sale is at discounted price and if so the above provision disentitles the petitioner for input tax credit in excess of the output tax payable on the sale of deep freezers made to the distributors. Therefore these revision cases are allowed in part by directing the assessing officer to verify the pa .....

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