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State of Gujarat Versus Kairavi Steel

2015 (7) TMI 1037 - GUJARAT HIGH COURT

Demand of interest and penalty - Assessee paid excess Input Tax Credit - Held that:- while declaring / holding that the appellant is entitled to adjustment of admissible Input Tax Credit towards its output tax liability of the current year under consideration, the learned Tribunal has rightly observed and held that the assessee is liable to pay interest only on the dues rising on assessment after adjusting the admissible Input Tax Credit towards its output tax liability - Decision in the case of .....

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R (Per : Honourable Mr. Justice A. J. Desai) 1. By way of the present appeal filed under Section 78 of the Gujarat Value Added Tax Act, 2003, the Commissioner of Commercial Tax has challenged the judgement and order dated 15.10.2014 passed by the Gujarat Value Added Tax Tribunal, Ahmedabad in Second Appeal No. 685 of 2014, by which it has been held that the respondent assessee cannot be held to pay the interest and penalty on the tax levied since the assessee has already paid excess Input Tax Cr .....

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the assessment year of 2008-09 and produced relevant documents along with the returns. The Assessing Officer by passing assessment order made the total demand of 38,13,740/- including tax demand of ₹ 7,96,791/-, interest of ₹ 6,45,538/- and penalty of ₹ 23,71,441/- disallowing the demand raised by the assessee by way of Input Tax Credit on the purchases made from M/s. Nova Shipping Pvt. Ltd. The said decision was challenged by the assessee by way of filing first appeal under Se .....

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Tribunal, Ahmedabad. By judgement and order dated 15.10.2014, the Gujarat Value Added Tax Tribunal, Ahmedabad partly allowed the appeal and held the since the assessee has already paid excess Input Tax levied interest as well as penalty was contrary to the provisions of law as well as the decision of the Tribunal in case of Cosmos International Ltd. V. State of Gujarat.Hence this appeal. 3. Learned AGP Ms. Vacha Desai fairly conceded that the decision delivered by the Tribunal in case of Cosmos .....

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see. 4. On the other hand, learned advocate Mr. Uchit Sheth appeared for the respondent and states that he has already filed his appearance on behalf of the respondent - assessee. Learned advocate would submit that in view of the decision delivered by the Coordinate Bench of this Court, there is no need to interfere with the present appeal. 5. Heard learned AGP Ms. Vacha Desai and learned advocate Mr. Uchit Sheth. Perused the impugned judgement and order passed by the Gujarat Value Added Tax Tri .....

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t equal to the amount of, (i) tax collected from the purchasing dealer by a registered dealer from whom he has purchased such goods or the tax payable by the purchasing dealer 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 not be allowed for purchases (a) ... to (d) ... (dd) made prior to the date of registration. 12. Tax Credit for stock on (31st March .....

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g the dealer an opportunity of being heard direct him to pay a penalty equal to twice the amount of tax credit so claimed. 13. Net amount of Value Added Tax The net amount of 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 ma .....

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after called central sales tax liability) for the said tax paid and the remaining amount of central sales tax shall be payable : or (b) if there is no Central 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 .....

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and on assessment the Input Tax Credit admissible to an assessee/dealer is determined. Once on assessment it is found that dealer is entitled to a particular Input Tax Credit, in that case, Rule 18 of the Rules, 2006 which provides for calculation 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 .....

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next subsequent year and that is the scheme of the VAT Act and the Rules, 2006 more particularly with respect to the Input Tax Credit. Therefore, merely because while submitting the form and raising the claim of Input Tax Credit, the assessee had 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 c .....

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