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TMI Blog2019 (12) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... Act (in W.P.9853 of 2010 and batch) (iii) Penalty for the aforesaid additions/enhancements to turnover based on Section 27(3)(a) of the Act (in both batches of writ petitions) 3. Heard the detailed submissions of Mr.Prasad and Mr.AN.Ramanathan, learned counsels appearing for the petitioners and Mrs.J.Padmavathy Devi, learned Special Government Pleader appearing for the Commercial Taxes Department in all writ petitions. 4. The petitioners are manufacturers and traders in gold and silver jewellery. In the course of their business, the petitioners purchase worn-out jewelry from unregistered dealers as well as gold bullion from registered dealers both within the state, utilizing the same in the manufacture of new jewellery. The provisions of Section 12 of the Act provide for the levy of tax on purchases from registered dealers or any person in circumstances where no tax is payable by the registered dealers and where the goods purchased are used in the manufacture of other goods for sale. Credit is available on the tax paid on such purchasers. 5. According to the petitioners they are entitled to the credit of tax paid on the purchase of the gold converted into jewellery and so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of each writ petition for the sake of brevity and also for the reason that though the specific numerical details would vary, the issue they pertain to remain one and the same and the conclusion that I reach in this writ petition would apply on all fours in respect of all the writ petitions without exception. WP(MD)Nos.8062 to 8064 of 2010 and 9853, 8065 to 8067 of 2010 (in re.Bhima Jewellers) challenge various proceedings of the respondent including assessments. The summary of the writ petitions in the case of Bhima Jewellers have been circulated by way of a chart and I extract the chart below for the sake of convenience. Sl. W.P.No. Issue involved Prayer 1 8061 of 2010 Reversal of input credit relying on the provisions of Section 19(2)(ii) and Section 19(4) Writ of Declaration to declare the provisions of Section 19(2)(ii) and Section 19(4) as unconstitutional. 2 8062 of 2010 Reversal of input credit relying on the provisions of Section 19(2)(ii) and Section 19(4) Writ of Certiorari to quash assessment order dated 13.05.10 for assessment year 2006-07. 3 8063 of 2010 (a) Reversal of input credit by relying on provisions of Section 19(2)(ii) and (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase tax under Sec.12 has already been clarified as per letter No.VAT Cell 7067/2007/ (VCC No.627) dated 31.05.2007 clearly mentioning it that purchase tax paid on the purchase of beaten up gold when utilized for manufacture is eligible for input tax credit. The Details are as below: 2007-2008 Apr - 07 3477241 34772 May-07 3780627 37806 Jun-07 2399299 23993 Jul-07 2955984 29560 Aug-07 4655883 46559 Sep-07 5312260 53123 Oct-07 10407973 104080 Nov-07 14160883 141609 Dec-07 198338 198338 ---------- 699840 --------- For the period from April 2007 to August 2007, the purchase tax Rs. 154444/- has been paid to you as per your instruction vide Chq.No.68869 dated 26.09.2007 and taken the claim in Nov.07 as per out letter dated 20.12.2007. The amount of Rs. 564346/- has been paid to you vide chq.No.179125 dated 28.01.2008 as per your notice. By our letter dated 28.01.2008 we had requested you to give credit for the payment by us forward purchase tax, but so far you have not adviced us to adjust it in future payments. 2007-2008 Jan-08 17101216 171012 Feb-08 14306547 143065 Mar-08 18387 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase tax, the argument advanced by the respondent in the counter to WP(MD)No.9853 of 2010 at para-4 of the counter is extracted below: '4.It is submitted that the Petitioner has mentioned the purchase tax under section 12(2) but in no where pointed out that the purchase tax has been paid in the month of purchase in the Form I submitted by the petitioner. For example for month of April 2007 the tax liability is Rs. 1754725-00 under section 19(1). Eligible credit under section 19(1) is Rs. 2065923-00. The balance amount of Rs. 688802-00 was only paid through cheque on 16-5-2007. The liability of Rs. 34,772-00 under section 12(2) was not paid in the return filed for the month of April 2007.' 13. I am of the considered view that the assessing authority has not appreciated the methodology followed in the proper perspective. What the petitioner has done is, as apparent from the tabulation and reply extracted above, to remit the purchase tax by taking credit in respect thereof against the credit available in the immediately preceding month. Thus, at the end of the period in question, the liability to purchase tax is taken to be remitted in full by set-off of such liability ..... X X X X Extracts X X X X X X X X Extracts X X X X
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