TMI Blog2019 (12) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... a notice for payment of such tax. The registered dealer is entitled to furnish a revised return within six months from the end of the relevant tax period. It is the deemed assessment based on the return filed by every registered dealer under Section 35 of the Act except in certain cases where the commissioner may notify. The Cognate Bench of this Court in the case of Kirloskar Electricity Co. Ltd., V/s. State of Karnataka and Another, [ 2018 (2) TMI 524 - KARNATAKA HIGH COURT ] , while considering the denial of input tax credit on the premise that the registered dealer has not claimed such input tax credit in that particular period i.e., input tax credit restricted/denied to the registered dealers merely on the ground that sale invoice on the basis of which input tax credit claimed was pertaining to a month or a period prior to the relevant tax period has held that 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. It is held that the input tax credit cannot be denied only be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RESPONDENTS [BY SRI T.K.VEDAMURTHY, AGA.] O R D E R These petitions involving similar and akin issues, have been considered together and are disposed of by this common order. 2. In W.P.Nos.35989-36000/2016, the petitioner has challenged the order dated 05.05.2016 passed by the Additional Commissioner of Commercial Taxes under Section 64 of the Karnataka Value Added Tax Act, 2003 [ Act for short]. In W.P.No.33372/2018, the petitioner has challenged the re-assessment order and the rectification order passed by the prescribed authority under the provisions of the Act. In W.P.Nos.13781 and 28178-28188/2017, the petitioner has challenged the re-assessment order dated 25.11.2016 passed by the prescribed authority under the provisions of the Act in addition to the other prayers sought. However, the prayers in clauses [d], [e], [f] and [g] are not pressed as having rendered infructuous. In W.P.No.32896/2016 the petitioner has challenged the reassessment orders as well as the demand notices dated 17.05.2016 and 18.05.2016 relating to the assessment years 2012-13 and 2013-14 respectively. Though the petitioner has sought for a direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed authority. The filing of the audit report is to facilitate the Assessing Officer in framing of a proper assessment. The first respondent after verifying all the details furnished by the petitioner in support of the input tax credit/rebate based on the annual audit report, rejected the input tax credit solely on the basis that the same was not claimed in the returns filed. Learned counsel has referred to circular dated 08.02.2018 issued by the Commissioner of Commercial Taxes, [Karnataka] Bangalore in compliance with the direction of this Court rendered in the case of M/s. Kirloskar Electric Company Pvt. Ltd., infra in respect of Section 10[3] of the KVAT Act relating to the period up to 2014-15. 8. Learned counsel for the petitioners argued that the amendment to Section 10[3] of the Act by Act No.5 of 2008 w.e.f., 01.08.2008 substituting the phrase this Act for the words Chapter V would indicate the entitlement of input tax credit by the registered dealer based on VAT Form 240. It was argued that the decision of the Authorities in rejecting the claim of input tax credit is contrary to Section 10[3] of the Act. Reliance was placed on the catena of judgments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return in the prescribed form or submit the return in the prescribed form, electronically through internet in the manner specified in the said notification: Provided further that the specified class of dealers as may be notified by the Commissioner shall pay tax payable on the basis of the return, by electronic remittance through internet in the manner specified in the said notification. (2) The tax on any sale or purchase of goods declared in a return furnished shall become payable at the expiry of the period specified in sub-section (1) without requiring issue of a notice for payment of such tax. (3) Subject to such terms and conditions as may be specified, the prescribed authority may require any registered dealer.- (a) to furnish a return for such periods, or (b) to furnish separate branch returns where the registered dealer has more than one place of business. (4) If any dealer having furnished a return under this Act, other than a return furnished under sub-section (3) of Section 38, discovers any omission or incorrect statement therein, other than as a result of an inspection or receipt of any other infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akes it clear that the registered dealer is liable to furnish a return in the Form and manner prescribed and shall pay the tax due on such return within 20 days/15 days after the end of the preceding month or any other tax period as may be prescribed. The tax on any sale or purchase of goods declared in return furnished becomes payable at the expiry of the period of 20 days/15 days without requiring issue of a notice for payment of such tax. The registered dealer is entitled to furnish a revised return within six months from the end of the relevant tax period. It is the deemed assessment based on the return filed by every registered dealer under Section 35 of the Act except in certain cases where the commissioner may notify. 17. Provisions of Section 10[3] of the Act was amended from time to time. Section 10[3] as it stood prior and after the amendments is quoted hereunder for ready reference: SECTION 10[3] OF THE KVAT ACT PRIOR TO AMENDMENT Act No.5 of 2008: [3] Subject to input tax restrictions specified in Sections 11, 12, 14, 17, 18 and 19, the net tax payable by a registered dealer in respect of each tax period shall be the amount of output tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of net tax to be paid or refunded, no deduction for input tax shall be made unless a tax invoice, debit note or credit note, in relation to a sale, has been issued in accordance with Section 29 [x x x] and is with the registered dealer taking the deduction at the time any return in respect of the sale is furnished, except such tax paid under subsection [2] of Section 3. 18. The Cognate Bench of this Court in the case of Kirloskar Electricity Co. Ltd., V/s. State of Karnataka and Another, reported in [2018] 50 GSTR 385 [Karn], while considering the denial of input tax credit on the premise that the registered dealer has not claimed such input tax credit in that particular period i.e., input tax credit restricted/denied to the registered dealers merely on the ground that sale invoice on the basis of which input tax credit claimed was pertaining to a month or a period prior to the relevant tax period has held that 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther than the interpretation made in this judgment and the instructions of this circular is taken by any of the authorities in the department while examining the claim of input tax credit as per section 10[3] of KVAT Act, 2003, as existed up to 31.03.2015, such authorities will be held responsible for any contempt proceedings that would be initiated by the Hon ble High Court of Karnataka and disciplinary action will be initiated against those authorities as per the Karnataka Civil Service Rules. 20. In the case of Sonal Apparel Private Limited V/s. State of Karnataka and Another, reported in [2017] 97 VST 488 Karn], the learned single judge of this Court has held in paragraphs 37 as under: 37. Under the KVAT Act, tax is leviable on every sale of goods, irrespective of whether it is the first, second or third sale. However, in order to ensure that the Act does not fall foul of the prohibition placed by the Constitution of India on double taxation, the provisions of the Act permit a dealer to deduct the amount of tax paid by him on his purchases while calculating his net tax liability. If the interpretation afforded by the Revenue to the meaning of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ILR 2007 KAR 1336 , the learned single judge of this Court in the context of Section 139 of the Income Tax Act, 1961, held that the said provision does not indicate that the authorities are barred from processing the return filed under the IT Act, 1961 just because it is not filed within the time stipulated either under Section 139[1] or 139[4] of the said act. A return filed is bound to be processed by the Income Tax authorities for which purpose they are meant unless there is an embargo placed. 23. In the case of State of Karnataka Vs. Centum Industries Private Limited case, reported in [2015] 77 VST 117 [Karn], The Division Bench of this Court interpreting Section 10[3] of the Act inasmuch as the belated claim made by the assessee much after the lapse of a reasonable period, 6 months, disallowed the claim of input tax credit. It is beneficial to refer to the relevant paragraphs which reads thus: 12. It is contended on behalf of the assessee that, once input tax has been paid, by virtue of Section 10 the assessee is entitled to the rebate of the tax against the output tax notwithstanding the fact that such a claim is not put forth in the returns filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed in that period and accounted for in accordance with the provisions of the Act. If the assessee is not putting forth a claim for input tax deduction in the return filed in July 2006 nor as he put forth such a claim in a revised claim which he could have filed within 6 months there from his right to claim input deduction is lost. He cannot for the first time in the returns filed in February 2007 put forth a claim for input tax deduction as the said return was not related to the tax period during which the input tax was paid. In that view of the matter, the Tribunal has not applied its mind to the aforesaid provision and ignoring the mandate of law has allowed the said deduction erroneously. Therefore, the said finding recorded by the Tribunal cannot be sustained and accordingly it is hereby set aside. The question of law raised is answered in favour of the revenue and against the assessee. 24. Section 31[4] of the Act reads thus: [4]. Every dealer whose total turnover in a year exceeds one hundred lakh rupees shall have his accounts audited by a Chartered Accountant or a Cost Accountant or a Tax Practitioner subject to such conditions and such limits a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made by the registered dealer. Filing of returns is sine-qua-non to determine the net tax liability under Section 10[3] after deducting the input tax from the output tax. Section 10[4] plays an important role in calculating the amount of net tax to be paid or refunded wherein it is categorically specified that a tax invoice, debit note or credit note, in relation to a sale, has been issued in accordance with Section 29 and is with the registered dealer taking the deduction at the time, any return in respect of the sale is furnished, except paid under Sub-section [2] of Section 3 i.e., from an unregistered dealer. 27. At this juncture, it is beneficial to refer to the Division Bench judgment of this Court in the case of Infinite Builders and developers V/s. Additional Commissioner of Commercial Taxes [2014] 68 VST 24, the relevant paragraphs of which are quoted hereunder: 44. The assessee never filed any revised return in respect of the period from April 2005 to March 2006 nor claimed any input credit return, but, on the other hand only filed nil tax liability return. The assessee persisted and did not file any revised return or anything at all even afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the Act. 57. In the circumstances we find that the impugned order passed by the Commissioner setting aside the appellate authority s order for the periods April 2005 to March 2006 and April 2006 to November, 2006 and restoring the assessment order cannot be said to be suffering from any illegality or want of jurisdiction and therefore, the appeals to that extent are dismissed. The Judgments relied cannot further the case of the appellant/assessee, as when a statutory provision mandates compliance in a particular manner in examining as to whether the compliance is secured or otherwise a broad based approach is not called for, more so in tax matters, where the liability is strictly as per the sections and compliance, both on the part of the revenue and on the part of the assessee, also should be strictly in terms of the statutory provisions. An assessee pays penalty if it violates the statutory provision and likewise the revenue also loses revenue unless it adheres to the requirements of the statutory provision. It is for this reason we are not impressed by the submission on behalf of the assessee that there was no need for taking a technical approach or hyper technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the assessment would not assume supremacy over the relevant substantial provisions. Such opinion of the Chartered Accountant/Cost Accountant/Tax Practitioner would only be a recommendatory but cannot obliterate the mandatory provisions of filing of returns to compute the net tax liability under Section 10[3] and 10[4] of the Act. 30. It is apparent that all the registered dealers are not required to file such Form VAT 240 but only depending on the total turnover for the year, Form VAT 240 has to be filed. In cases where no such VAT 240 is filed, it would certainly result in discrimination if VAT 240 has to be accepted as the basis for determining the input tax credit. VAT Form 240 cannot replace the return . 31. At the cost of repetition, it is reiterated that none of the judgments referred to, by the learned counsel for the petitioners would permit the registered dealer to claim the input tax credit on the basis of the VAT Form 240 without filing the return. When the statutory provision mandates compliance in a particular manner, it should be done in that particular way alone not by any other method. Expressio unius est exclusio alterius is the well settled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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