9911796707
TMI Blog2017 (4) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner is a dealer duly registered under the provisions of the Act as well as under the provisions of the Central Sales Tax Act, 1956 at Mohali (Punjab). The petitioner was amalgamated with M/s Reliance Fresh Ltd. with effect from 01.07.2013 and with effect from 30.07.2013 it changed its name to M/s Reliance Retail Ltd. The petitioner carries on its business of the manufacturer and sale of jewellery. It is admittedly entitled to Input Tax Credit (ITC) of the tax paid on purchase of gold used in the manufacture of jewellery. The petitioner filed returns for the assessment year 2008-09 in which it claimed ITC in respect of the gold purchased during that year and adjusted the admissible tax credit against its output tax liability and carried forward the balance tax credit to the next year. 3. The respondents by a notice dated 29.08.2012 called upon the petitioner to show cause why penalty and interest be not imposed upon it under sections 56 and 32 of the Act. The notice stated that ITC on purchases amounting to about Rs. 8.23 crores was liable to be rejected as it was not in accordance with Rule 20 read with Section 13(3) of the Act. The petitioner responded to this show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack. Every year is an independent year and is to be assessed separately. Therefore, the goods which have not been counted for the year 2008-09, certainly, input tax credit was bound to be reversed. .......................................Irrespective of the fact and without commenting deep over the matter as to whether Rule 20 is directory or mandatory, it would be suffice to say that the delay in receiving the goods after job work for a few days, under special extra ordinary circumstances could be condoned, but in the present case goods were not received during the said financial year. Therefore, the ITC so claimed was bound to be reversed....................................." The Tribunal also held that the appellant had not led cogent evidence evidencing that the same goods have been received back after the job work. This aspect need not detain us for evidently the petitioner had infact led evidence in this regard even before the Assessing Authority. As Mr.Goyal, the learned counsel appearing for the petitioner rightly pointed out neither the Assessing Authority nor the First Appellate Authority held that the petitioner had not led cogent evidence that the same goods had been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of sale in the course of inter-State trade or commerce or in the course of export out of territory of India; and (b) used in manufacturing or in packing of taxable goods sent outside the State other than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India. 13(3) Where a taxable person sends any goods as such or after being partially processed for further processing on job work basis, he shall debit the ITC by four percent of the value of such goods. If such goods after processing are received back by such person, the ITC debited at the time of dispatch, shall be restored. Such person shall, however, be required to produce proper evidence in the shape of records, challans or memos or any other document evidencing receipt of such goods, whenever asked for. Section 26 26(1) Every taxable person shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed. (2) Every registered person shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed. (8) A taxable person or a registered pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, Rule 20 insofar as it prescribes the time limit is bad in law. 9. Mr. Rajinder Goyal, the learned counsel appearing on behalf of the respondents on the other hand contended that under sub section (1) a taxable person shall be entitled to ITC "in such manner and subject to such conditions as may be prescribed....................." and that, therefore, the legislature was entitled to prescribe the time limit within which the goods sent for job work must be received back. 10. Section 13(1) deals with a taxable person's entitlement to ITC. It provides that a taxable person would be entitled to ITC subject to such conditions as may be prescribed. The legislature is, therefore, entitled to prescribe the conditions subject to which the taxable person shall be entitled to ITC. When a party fulfills the conditions, as may be prescribed, his entitlement to ITC is crystallized and vested in him. Sub section (3) of Section 13 does not curtail this entitlement to a taxable person to ITC. As far as the entitlement to ITC is concerned, the matter ends there. Sub section (3) deals with a different situation. It deals with a situation where the taxable person sends such goods for furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard than referring to an order under section 85 of the Act passed by the Excise and Taxation Commissioner, Punjab. Another assessee raised inter-alia the following question to be determined under section 85 of the Act:- "1. Whether Input Tax Credit debited on transfer of goods for job work can be restored if the goods are received back after a period of ninety days which is against the rule 20 of PVAT Act, 2005." The order in so far as it is relevant reads as under:- "Rule 20 regulates the provision of section 13(3) of the PVAT Act, 2005. This rule is directory in nature. No tax is evaded if the goods are received after 90 days of sending the same for job work and are accompanied by relevant documents i.e. challan, invoice or any such documents as may show the same goods are being received after job work by the taxable person. Therefore at the most it can be considered as violation of rule which can be penalized under section 60 of the PVAT Act, 2005. Therefore, orders may please be passed in such a way that the taxable person had not to forego the input tax credit available to him without selling the goods or converting same into tax free goods." ............................ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 20. The period of 90 days is not confined to the same assessment year. Indeed it cannot be. If for instance the goods are sent during the last few days of the assessment year or even on the last date of the assessment year, they cannot be expected to be returned by the job workers during the same assessment year. That is not even contemplated by the Rule. 16. The Tribunal also observed that the goods were not returned within a few days. We see no reason to restrict the right to claim a reversal of the debit under sub section 3 only if the goods are returned within a few days. They must be returned within a reasonable time. 17. This brings us to an important aspect as to what is a reasonable time for the purpose of reversing the debit under sub section (3) of Section 13. Although what is reasonable time must depend on the facts of each case, in our view, the reasonable time must be assessed not in vacuum but keeping in mind the scheme and purpose of the Act itself. Keeping in view the purpose and the scheme of the Act, we are inclined to hold that it must be determined considering the possibility of ascertaining whether the goods returned by the job workers are the very goods t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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