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TMI Blog2018 (2) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of ITC was disallowed by the Division Bench not on the basis of an interpretation of the substantive provisions contained in Section 10(3) of the KVAT Act, 2003, or any restriction of period to be read therein but because of the belated claim made by the assessee much after the lapse of a reasonable period viz., six months from the month of June 2006 in the month of February 2007 and while referring to the belated claim beyond six months, the Division Bench referred to Section 35 of the KVAT Act, 2003, which prescribes 20 days period for filing of the Returns for the month ended and in case of omissions or errors, the assessee is permitted to file a revised Return under Section 35 (3) and (4) of the KVAT Act, 2003, within a period of six months from the end of relevant tax period respectively. 20. In the aforequoted paragraph 14 of the judgment of the Division Bench in Centum Industries Private Limited case, from the words "........ However, the Tribunal without reference to the statutory provisions proceeds on the assumption that allowing input tax is a statutory promise made to the dealer buying the goods from the registered dealer by paying that tax mentioned in the tax i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Advocate General's argument is that, by necessary implication therefore for the previous periods, it should be inferred that since there was no such relaxation available to the assessees, therefore unless the ITC invoice pertains to the same tax period, such ITC cannot be allowed. This argument of the learned Additional Advocate General cuts the arguments of the learned AAG himself, when he submits that the amendment was effected to facilitate the claim of ITC by the State realizing the difficulties of the assessees. If the restrictive and narrow interpretation put forth by the learned counsel for the Respondents is accepted, the same would lead to absurd, impractical and totally unintended results. While on the one hand, the Dealer is enjoined with the legal obligation to maintain the Books of Accounts in the ordinary course of its business on a day-to-day basis as required under Section 31(1) of the KVAT Act and well settled Accounting Principles and he would record the purchases only when he purchases the goods and the goods are so received by him and depending upon the terms of contract, the contract is finally executed completely by recording such purchase in the Books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the Division Bench of this Court in Centum Industries Private Limited case, which as explained above, does not support the case of the Revenue at all. 24. In the peculiar facts of the Centum Industries Private Limited case, the claim of ITC credit was disallowed on the basis of the belated claim made by it and not while interpreting the substantive provisions of Section 10(3) of the Act in a narrower way, as is sought to be canvassed by the Respondent State before this Court even now. 25. The learned counsels for the Respondent State were again without any answer to the question of the Court as to how the machinery provisions of filing of the returns under Section 35 of the KVAT Act, 2003 for assessing the tax liability including the OPT, ITC and Net Tax liability under Section 10 of the KVAT Act, 2003, can be allowed to override the substantive provisions of Section 10 of the KVAT Act, 2003, contained in chapter II of the said KVAT Act, 2003. 26. In the absence of any valid answer and submission on behalf of the Respondent State, this Court can safely conclude that the machinery provisions cannot be allowed to override and defeat the substantive claim of the Input T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the chain of sales of the same goods, cannot be denied on the anvil of machinery provisions or even provisions relating to time frame which is law of limitation only bars the remedy rather than negativing the substantive claims under the taxing statutes. 30. Both the questions framed above are therefore liable to be answered in favour of the petitioners assessees. The claim of ITC cannot be restricted and denied on the stated grounds by Revenue. It cannot be denied only because ITC claim is not made in respect of Sale Invoices which are not pertaining to same Tax Period, nor it can be denied on the ground that such claim is not made immediately in the month or months following the month of purchase of goods in question. The machinery provisions of filing of Returns under Section 35 of the KVAT Act cannot defeat the substantive claims under Section 10(3) of the Act. The Revenue is entitled only to verify that the Sale Invoices are genuine and valid and such ITC claim is not duplicate, fictitious or bogus. Article 265 of the Constitution of India does not entitle the State to retain such tax paid by Selling Dealers and deny the claim of ITC credit or set off in the hands of the Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any further multiplicity of litigation before this Court and Appellate Forums. Therefore, such a Circular shall be issued by the Respondent Commissioner of Commercial Taxes and the Respondent - Departmental Authorities, including the Appellate Authorities under the Act are cautioned that now onwards if any contrary view is found to be taken by such Authorities of the Department on aforesaid issue, this Court would initiate suo motu contempt proceedings against the Commissioner of Commercial Taxes as well as the concerned Authorities of the Respondent Department. 35. With these observations and directions, these writ petitions are allowed. All the impugned orders passed by the Assessing Authorities are set aside and the matters are restored to file of the respective Assessing Authorities, for passing fresh orders in accordance with law, as interpreted above. No costs." 2. Accordingly, the present writ petitions are also disposed of in the same terms. 3. If any other issues arise in the matter other than the aforesaid covered issue, the petitioner assessee may file a regular Appeal under Section 62 of the KVAT Act, 2003, before the Joint Commissioner (Appeals) and if such an Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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