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2015 (4) TMI 965 - GUJARAT HIGH COURT

2015 (4) TMI 965 - GUJARAT HIGH COURT - TMI - Adjustment of carried forward input tax credit - whether the learned Tribunal has committed any error in declaring and holding that an assessee/dealer is entitled to the Input Tax Credit adjustment against its output tax liability under the VAT Act under the current year under consideration and whether the learned Tribunal has committed any error in quashing and setting aside the order passed by the Assessing Officer as well as the first Appellate Au .....

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te JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) [1.0] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Gujarat Value Added Tax Tribunal (hereinafter referred to as "the Tribunal") dated 13/09/2013 in Second Appeal No.74/2013 by which in an appeal preferred by the respondent-dealer, against the order passed by the first appellate authority dated 06/02/2013 dismissing the appeal on non-deposit of the amount of pre-deposit the learned Tri .....

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ions of law; (A) Whether the learned Tribunal erred in adjudicating on merits despite the first appellate authority dismissed only on the ground of predeposit? (B) Whether the learned Tribunal has erred in holding that the Input Tax carried forward is required to be adjusted against the liability of CST? (C) Whether the learned Tribunal has erred in not giving a specific direction requiring us to execute reversal of carry forward of Input Credit in subsequent year? (D) Whether the learned Tribun .....

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014 dated 11/12/2014 and 104/2015 dated 19/03/2015, the learned Tribunal ought not to have entered into the merits of the case and / or ought not to have decided the issue on merits and / or considered the legality and validity of the original assessment order and, therefore, it is requested to quash and set aside the impugned order passed by the learned Tribunal and remand the matter either to the learned Tribunal or to the learned first appellate authority. [3.0] Ms. Vaibhavi Parikh, learned a .....

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arned Tribunal was not required to go into the merits of the case. However, she has submitted that now the issue involved with respect to the tax liability to be deducted from the Input Tax Credit available in the credit of the dealer has been now concluded by the Division Bench of this Court in the recent decision dated 20/03/2015 in the case of State of Gujarat Vs. Cosmos International Ltd. rendered in Tax Appeal Nos.857/2013 and other allied Tax Appeals, and, therefore, it is requested not to .....

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y the earlier Bench (Coram:-Jayant Patel & S.H. Vora, JJ.), Ms. Pragya Joshi, Registrar of the Gujarat Value Added Tax Tribunal has appeared. The attention of the Registrar of the learned Tribunal is drawn on various decisions of this Court in Tax Appeal Nos.711/2013 dated 30/08/2013; 667/2013 dated 12/09/2013; 688/2013 dated 30/01/2014; 595/2014 dated 13/08/2014; 1317/2014 dated 11/12/2014 and 104/2015 dated 19/03/2015 by which different Benches have taken the view that when the appeal befo .....

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be joined as party respondent, through the Registrar, so as to draw the attention of the learned Tribunal the orders passed by different Benches in the aforesaid Tax Appeals. Ms. Pragya Joshi, Registrar of the Gujarat Value Added Tax Tribunal has stated at the bar that she has collected the judgment and orders passed by this Court in the aforesaid Tax Appeals and attention of the learned Tribunal shall be drawn to the aforesaid decisions. [4.1] Now so far as the questions of law proposed / rais .....

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he matter is to be remanded to the learned Tribunal or to the learned first appellate authority. However, for the reasons stated hereinbelow and in the facts and circumstances of the case, more particularly, when the main issue involved is now squarely covered by the decision of the Division Bench of this Court in the case of Cosmos International Ltd. (Supra), we propose to consider the issue on merits rather than remanding the matter either to the learned Tribunal or to the learned first appell .....

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of law on merits i.e. question nos.(B), (C) & (D) are concerned, the aforesaid questions are squarely covered against the revenue in view of the decision of the Division Bench of this Court dated 20/03/2015 passed in Cosmos International Ltd. (Supra). In the aforesaid decision, the Division Bench of this Court has confirmed the decision of the learned Tribunal by which it was held that the dealer can adjust the tax liability out of the amount in the current year of tax liability out of the .....

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Tribunal has committed any error in declaring and holding that an assessee/dealer is entitled to the Input Tax Credit adjustment against its output tax liability under the VAT Act under the current year under consideration and whether the learned Tribunal has committed any error in quashing and setting aside the order passed by the Assessing Officer as well as the first Appellate Authority in directing to carry forward such Input Tax Credit to the next subsequent year? [7.1] While considering th .....

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to a registered dealer who has sold such goods to him during the tax period. (ii) ... (iii) ... (b) ... (2) ... to (4) ... (5) Notwithstanding anything contained in this Act, Tax credit shall be allowed for purchases- (a) ... to (d) ... (dd) made prior to the date of registration. 12. Tax Credit for stock on (31st March, 2006) 12(1) to 12.6) - The provisions of section 11 shall apply mutates mutandis to the tax credit to be availed of under this section. 12(7) If the Commissioner is satisfied th .....

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Value Added Tax for a tax period payable shall be determined after the adjustment of tax credit in the manner as may be prescribed." GUJARAT VALUE ADDED TAX RULES, 2006 15. Calculation of Tax Credit u/s.11 15(1) ... 15(2) ... 15(3) A registered dealer shall calculate tax credit as per Form201 and such calculation shall be made separately for each tax period. 18. Calculation of Tax (1) The net amount of tax payable under section 13 by a registered dealer, other than the dealer who has been g .....

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Sales Tax liability or if the central sales tax liability for the said tax period is less than the said negative amount, then no tax under the Act as well as under the Central Act will be payable and the net amount, after adjusting the Central Sales tax liability, shall be carried forward to the next tax period of the same year or, as the case may be, the subsequent year." Section 11 of the VAT Act provides for an Input Tax Credit admissible and Rule 18 of the Rules, 2006 provides for calcu .....

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tion of tax would come into play. On conjoint reading of section 11 of the VAT Act read with Rule 18 of the Rules, 2006, a dealer is entitled to adjust its output tax liability against its admissible Input Tax Credit in the current year under consideration. Thereafter and after adjusting the Input Tax Credit against its output tax liability of the current year under consideration, if still there is any Input Tax Credit available to a dealer/assessee, a dealer is entitled to adjust such balance I .....

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ad claimed more / excess Input Tax Credit than admissible, is no ground to deny the assessee/dealer to adjust the admissible Input Tax Credit (which is held to be admissible only after assessment) against its output tax liability under the VAT Act in the current year under consideration. To deny such Input Tax Credit in the current year under consideration would be against the provisions of the VAT Act and the Rules, 2006 more particularly section 11 of the VAT Act read with Rule 18 of the Rules .....

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termined, an assessee/dealer is entitled to such Input Tax Credit and on such Input Tax Credit the assessee is entitled to adjust such Input Tax Credit against its output tax liability under the VAT Act of the current year under consideration. Only in a case where the admissible available Input Tax Credit is less than the output tax liability of the current year under consideration, after permitting to adjust such Input Tax Credit against its output tax liability of the VAT Act of the current ye .....

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t the assessee is liable to pay interest only on the dues rising on assessment after adjusting the admissible Input Tax Credit towards its tax liability. [7.2] So far as the submission by Shri Dave, learned AGP appearing on behalf of the State/Revenue that while submitting the Form No.108, the assessee with malafide intention claimed more/excess Input Tax Credit than it was entitled to and/or admissible under the VAT Act and the Rules, 2006 and therefore, the assessee is not entitled to adjust s .....

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nt or in a given case reassessment. Therefore, when on assessment the assessee / dealer is held to be entitled to a particular Input Tax Credit, in that case, the assessee/dealer is entitled to the benefit of Rule 18 of the Rules, 2006 and is entitled to adjust such Input Tax Credit against its output tax liability under the VAT Act of the current year under consideration. Merely because while submitting the Form No.108 the assessee/dealer submitted the claim of Input Tax Credit more than which .....

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