TMI Blog2020 (2) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... credit in the manner prescribed on the purchase of capital goods for use in the manufacture of taxable goods. The only restriction that is contained under the provision of Sub Section (6) of the Act. In this case, it is not the case of the respondent that there was deliberate ploy on the part of the dealer who sold the capital goods to the petitioner by charging tax at 12.5% to liquidate accumulated credit - whether the tax was paid at 4% or 12.5% as the case may irrelevant as far as the respondent is concerned as the issue is revenue neutral. Thus there is no reason why credit availed by the petitioner should be disallowed particularly in the light of the fact that intention of the legislature is to reduce the cascading effect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verse credit availed equivalent to 8.5% VAT paid in excess by the registered dealer who sold the capital goods to the petitioner. A show cause notice dated 26.12.2011 was issued to the petitioner. The petitioner replied to the said notice by its reply dated 30.01.2012. By the impugned order dated 18.09.2015, the respondent has directed the petitioner to reverse the excess credit of ₹ 5,73,309/- 5.The learned counsel for the petitioner submits that the issue is no longer res integra and is covered by several decisions of this Court. In this connection, learned counsel for the petitioner relies on the decision of a Division Bench of this Court in Sara Leathers Vs. Commercial Tax Officer, (2010) 30 VST 581 (Mad). 6.It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of purchases of capital goods *for use in the manufacture of taxable goods, shall be allowed input tax credit in the manner prescribed. (b) Deduction of such input tax credit shall be allowed only after the commencement of commercial production and over a period of three years in the manner as may be prescribed. After the expiry of three years, the unavailed input tax credit shall lapse to Government. (c) Input tax credit shall be allowed for the tax paid under section 12 of the Act, subject to clauses (a) and (b) of this sub-section. 9.The prescribed procedure is in the Rule 10(4)(a) of the TNVAT Rules, 2007 for availing credit. Rule 10(4)(a) and (b) of the Rules reads as under:- Rule 10(4)(a) The registered de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such tax to the petitioner with a view to liquidate the excess credit of input tax accumulated in their hand, the petitioner cannot be denied of the input tax credit of tax paid and reflected in the invoice. 12.Under those circumstances, the option available to the commercial tax department would be to recover the amount of tax passed on in excess from the registered dealer who sold such capital goods to the petitioner if it facilitated the petitioner to avail credit of such tax if such tax was otherwise not payable. 13.In this case, it is not the case of the respondent that there was deliberate ploy on the part of the dealer who sold the capital goods to the petitioner by charging tax at 12.5% to liquidate accumulated credit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he earlier provisions of the Repealed Act, once the purchaser proves as regards the actual payment of tax at a rate which is not as per the provisions of the Act, the question of proving the passing on of the liability does not arise. The provisions contained under section 19 of the Act relating to input tax credit, hence, herein assumes significance in considering the claim of refund under section 18(2) of the Act. In the circumstances, going by the very provisions of section 18(1) of the Act, given the fact that the sale by the petitioner is zero rated and that the petitioner is entitled to the benefit of section 18(2) of the Act for the refund of the input tax paid on the purchase of goods under the stated circumstances, the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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