Feedback   New User   Subscription   Demo   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Sri. Kanaheyallal Patel Versus The Assistant Commissioner of Commercial Taxes Audit-2. 5, D.V. O-2

2018 (2) TMI 773 - KARNATAKA HIGH COURT

Input tax credit - Section 10(3) of the KVAT Act, 2003 - Held that: - the controversy involved in these writ petitions is squarely covered by a decision of this Court in Kirloskar Electric Co. Ltd. And Others Versus The State of Karnataka [2018 (2) TMI 524 - KARNATAKA HIGH COURT], where it was held that the machinery provisions cannot be allowed to override and defeat the substantive claim of the Input Tax Credits under Section 10(3) of the KVAT Act, 2003, which without any restriction of the ti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t Petition No.58917-928/2016 and connected matters (Kirloskar Electric Company Limited Vs. State of Karnataka and another) decided on 10/01/2018 with regard to the claim of Input Tax Credit under Section 10(3) of the KVAT Act, 2003, wherein it is held as under:- 19. A closer look at the contextual facts of the case and as explained in bracketed portion in the aforesaid quote from the Division Bench decision in Centum Industries Private Limited case in the light of the provisions of Section 10(3) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rom the order of the Karnataka Appellate Tribunal, though inverted commas ( - ) have not been used by the Division Bench in the said Paragraph 14 of its judgment, but immediately thereafter, the Division Bench says In coming to the said conclusion, the Tribunal has not applied its mind to sub Section (3) of Section 10 ….. makes it obvious. Therefore it appears that what precedes these words is the reasoning given by the Tribunal while deciding the Appeal in favour of the petitioner assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

entirely different and therefore that judgment is of little help to the Revenue - Department in these cases. 21. The learned Additional Advocate General also contended before the Court that the amendments were effected in Section 10(3) of the KVAT Act, 2003 in the year 2015 and 2016, though for the period of assessments in question before this Court in the present batch of writ petitions are admittedly and without any dispute from either side are much prior to these amendments in Section 10(3) a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

actical difficulties, the State has effected these amendments to facilitate the claim of the ITC after these amendments. However, at the same time, the learned Additional 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 Advocat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y 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 accounts, if on the other hand, the same is sought to be negatived and Dealer is called upon to file a revised return to claim the IT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for allowing the deduction of ITC against the OPT in a particular tax period to determine the net tax payable for that tax period and therefore there is no justification whatsoever to accept such an interpretation put forth by the learned counsels for the Respondent State. Such contentions had not only been negatived and with great respects, rightly so by the learned Single Judge in the case of Sonal Apparel Private Limited case, but this Court is of the considered opinion that the Respondent De .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is claimed by the Dealer. 23. The learned counsels for the Respondent State were at complete loss of words to the question put by the Court as to, under what authority of law the State can retain the tax paid by the selling Dealer to the State as collected under the Sale Invoice which is passed on to the purchasing Dealer who are the assessees - petitioners before this Court, if ITC in respect of such sale invoice was to be disallowed, contrary to the very concept of VAT law and the unrestricte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aim 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, 2003, which without any restriction of the time frame, allowed such deduction or credit of the ITC against the OPT liability of the Dealer in question. 27. When the Assessing Authority could pass the impugned re-assessment order, Annexure C dated 29/04/2016 for the whole year in one go, disallowing the ITC claim illegally by restricting it on the basis of monthly Tax Periods, what can be the justification for disallowing the same, without it being found to be an unverified claim, not supporte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules which provides for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilized, has to be paid for. We are h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ar raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day that is becomes available. 29. Thus the claim of credit of input tax is indefeasible as was the case of CENVAT under Excise law and such credit of ITC under VAT law which is equivalent to tax paid in 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 limita .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s contended by the Respondent State or seeks to restrict and defeat the claim of ITC in the period of assessment following such amendment. Be that as it may. Since that amendment is neither applicable to the facts of the present case nor any of the sides has called the same in question, this Court need not make any further analysis of these amendments. 32. This Court is, therefore of the considered opinion that the impugned assessment orders/re-assessment orders passed by the Respondent - Assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

her opinion that despite more than one judgment interpreting the provisions of Section 10(3) of the KVAT Act, 2003, in favour of the assessees, the tendency on the part of the Assessing Authorities of the Respondent Department to still keep on passing the orders contrary to these judgments is in utter disregard of the judicial and hierarchical discipline which they are bound to observe and it may also amount to a deliberate disobedience on their part and may invite contempt action and therefore .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version