TMI Blog2016 (1) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... Unit located in any Special Economic Zone is entitled for the refund of input tax credit or deduction from the output tax payable by such dealer. Section 20(2) does not contemplate any period within which, such developer shall claim refund of input tax. Further, Rule 130A which was inserted w.e.f. 1-4-2007 also does not contemplate the period within which the developer shall claim the refund of input tax. Section 35 cannot control Section 20(2). The benefit of beneficial legislation has to be extended to the SEZ dealers. The technicalities shall not come in the way of giving some reliefs. Hence, Section 20(2) has a over-riding effect against Section 35 of the Act. The Tribunal, after examining the matter, has given the relief. We find no infirmity or irregularity in the said find. - assessee is entitled for refund of input tax credit. The appellant has not made out a case to interfere with the same. The substantial questions of law framed are held against the Revenue - Decided against Revenue. - STRP NOS. 329/2014 and 482-487 OF 2014 in STA NOS. 2570-2576/2012 - - - Dated:- 30-9-2015 - MR. VINEET SARAN AND MR. B MANOHAR, JJ. For The Petitioner : Sri. T.K. Vedamurthy, HCGP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the selling dealer. The sale of goods is completed only after the goods purchased are cleared by their Purchase Department and in some cases, by their Technical Consultants. Hence, it is unavoidable that the bills raised by the Suppliers in a particular month are processed only in subsequent months leading to the accounting of these purchases in their books of account in the month in which the bills of the Suppliers are recognized and accounted as purchased. The objections filed by the dealer has been examined with the provisions of KVAT Act by the Assistant Commissioner of Commercial Taxes, by its proceedings dated 26-05-2011, relying upon Section 35(4) of the KVAT Act and has disallowed refund of input tax to the extent of ₹ 5,18,64,074/- while allowing refund of input tax to an extent of ₹ 84,95,621/-. Being aggrieved by the order dated 26-5-2011, the dealer filed an appeal before the Joint Commissioner of Commercial Taxes, (Appeals)-I, Bangalore (hereinafter referred to as 'the First Appellate Authority' for short). The First Appellate Authority allowed the appeal in part except disallowing the refund with respect to the belated claims of input tax c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nomic Zone Units and its developers, amended Section 20 of the KVAT Act on 01-04-2007 and special provision has been made under sub-section (2) of Section 20 of the KVAT Act. Under sub-section (2), the tax paid on purchase of inputs by a registered dealer who is a developer of any Special Economic Zone or an Unit located in any Special Economic Zone established under the authorization by the authorities specified by the Central Government, shall be refunded or deducted from the output tax payable by such dealer subject to such conditions and in the manner as may be prescribed. Rule 130-A was inserted by notification dated 26-07-2007 which came into force w.e.f. 01-04-2007. A registered dealer being a developer of any Special Economic Zone, is eligible for refund of tax paid on any inputs purchased by him or deduction of such tax from the output tax payable by him as specified in sub-section (2) of Section 20 of the KVAT Act. These are the beneficial legislations, in order to encourage the people to develop Special Economic Zones. Section 20 is itself a Code, and it is not controlled by any other Section. Section 10 will not be applicable to Section 20(2) of the KVAT Act. The Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 10, [subject to such conditions as may be prescribed] from output tax payable by such dealer. [(2) Tax paid under this Act on purchase of inputs by a registered dealer who is a developer of any special economic zone or an unit located in any special economic zone established under authorization by the authorities specified by the Central Government in this behalf, shall be refunded or deducted from the output tax payable by such dealer, subject to such conditions and in the manner as may be prescribed.] Rule 130-A. Registered dealer being a developer of any Special Economic Zone:- (1) Any registered dealer being a developer of any special economic zone or an unit located in any special economic zone shall be eligible for refund of tax paid on any inputs purchased by him or deduction of such tax from the output tax payable by him as specified in sub-section (2) of Section 20, subject to the following conditions, namely. - (a) If such inputs are purchased for the purpose of development, operation or maintenance of the processing area in a special economic zone; (b) If such inputs are purchased for the purpose of setting up, operation or maintenance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... makes it very clear that the tax paid on purchase of inputs by the registered dealer who is developer of any Special Economic Zone shall be entitled for refund or deduction from output tax payable by such dealer. This is beneficial legislation made by the Government of India for the development of Special Economic Zone. There is no dispute with regard to the fact that the assessee is a developer of Special Economic Zone at Rachenahalli, and he is eligible for refund of input tax credit. The assessee replied to the proposition notice and explained the circumstances under which the delay has occurred for claiming the input tax credit. He has contended that after receipt of the bills, measurement, certification about the quantity and quality of the work by the qualified engineer and fulfilling other formalities takes one or two months. On fulfilling the said formalities, these bills were processed in the Accounts Section and then finally accepted and accounted in the Books of Account. Under section 10(4) of the Act, the input tax credit can be claimed only when the input invoice is with the registered dealer. Nowhere in the Act has it been stated that the input tax credit should be cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under: Therefore, the assessee was entitled to claim refund of input tax in July 2006. However, he has putforth the claim six months, thereafter. As rightly pointed out by the Tribunal, if he had putforth the claim in July 2006, the amount due to the assessee by way of refund was ₹ 1,36,837/-. Because the claim was made in December 2006, the amount due to him is ₹ 1,04,375/-. Sub- section (3) of Section 30 deals with when the payment of tax is to be made, it does not deal with the claim for refund of input tax. Once the tax is paid under the Act, the assessee is entitled to the benefit of input tax. Either .... .... The entire approach of the Assessing Authority and the First Appellate Authority is contrary to law and runs counter to the spirit of the Act. The Tribunal was justified in interfering with the said order and allowing refund of input tax to the assessee to which is legitimately entitled to under the Act. In that view of the matter, we do not see any merit in this appeal. Accordingly, it is dismissed. Hence, the assessee is entitled for refund of input tax credit. The appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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