TMI Blog2021 (4) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable under the Section 19 of the Tamil Nadu Value Added Tax Act, 2006. Both the petitioner and the respondent have not brought to the attention of the Court about the fate of assessment order passed under Tamil Nadu Value Added Tax, 2006 for the aforesaid assessment year as to whether credit was allowed to the petitioner under Section 19 of the said Act. Therefore, there are no merits in the present writ petition in absence of such vital information. If there was any zero rated sale during the subsequent years, it can only be refunded in accordance with the law to the petitioner. There is no scope for adjustment for past liabilities - Therefore, if the petitioner was otherwise entitled to such refund under Section 18 of the Tamil Nadu Value Added Tax, 2006, instead of refunding the amounts to the petitioner, such amount may be allowed to be set-off against the tax liability in view of the peculiar situation arising out of subsequent development and transition to a different tax regime under the GST Laws with effect from 01.07.2017. The petitioner is allowed to file an appeal against the impugned orders within a period of thirty days from date of receipt of a copy of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... du Value Added Tax Act, 2006 on 10.04.2014 to revise the assessment order dated 10.01.2014. 9. By an order dated 21.04.2014, the original assessment order dated 10.01.2014 for the Assessment Year 2011-12 was revised. The respondent re-determined the tax payable by the petitioner as ₹ 19,67,207/- by re-computing the gross tax due as ₹ 40,60,869/- less ₹ 19,25,287/- from the Input Tax Credit and determined the net balance payable by the petitioner as ₹ 19,67,207/-. 10. The petitioner claims to have adjusted an amount of ₹ 23,31,952/- being the Input Tax Credit available for adjustment under Rule 10(10)(b) of the Tamil Nadu Value Added Rules 2007 from its online monthly return of February, 2014. After adjustment of the aforesaid amount, according to the petitioner, there was an excess payment of ₹ 4,12,295/- which was to be refunded. 11. In the above background, a fresh notice dated 03.06.2014 under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 was issued to the petitioner to revise the assessment order dated 21.04.2014. 12. Pursuant to the above notice dated 03.06.2014 issued to the petitioner, the first mentioned impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the impugned order, it is the contention of the learned counsel for the Commercial Tax Department that the petitioner has an alternate remedy before the Deputy Appellate Commissioner and places reliance on the decision of the Hon ble Supreme Court in ALD Automobiles Vs. Assistant Commissioner (CT) , (2018) SCC OnLine SC 1945. 20. The learned counsel for the respondent/Commercial Tax Department further submits that the Input Tax Credit of ₹ 23,31,952 /- which has been adjusted by the petitioner has lapsed in absence of a valid claim for input tax credit within time. He submits that as per Section 19(11) of the TNVAT Act, 2006, in case, a registered dealer fails to claim Input Tax Credit in respect of any transaction of taxable purchased in any month, he shall make claim before the end of the financial year or before ninety days from the date of purchase, whichever is later. 21. In the operative portion of the first mentioned impugned order dated 31.07.2014, it has been held as under:- Limitation for adjustment On verification of the returns for the month of October 2010 to March 2011 the first sellers whom the assessees from whom they have purchased go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of such sales effected outside the State of Tamilnadu, no tax being paid to the State of Tamil Nadu. 37.In Mohammed Haji Manachithodi Agencies Vs State of Kerala [2012(3) KLT (SN) 17], the Division Bench of the Kerala High Court has held that the set-off is in the nature of a concession and no dealer has a right to claim input tax credit independent of the provision of Section 11 of the Kerala VAT Act. 38. Provision for availing concession is to be strictly construed and followed:- Input tax credit, which is in the nature of concession or indulgence, could be availed only in the manner prescribed under Section.19 Law is well settled that the person, who claims exemption or concessional rate, must obey and fulfill the mandatory requirements exactly. Unless there is strict compliance with the provisions of the statute, the registered dealer is not entitled to claim Input tax credit . Apart from Section 19 of TNVAT Act, there is no independent right to claim Input tax credit . When Section 19(11) stipulates time frame for a ailment of Input tax credit, the registered dealer must strictly follow the mandatory requirements of he provision. 39. The availme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Assessment Orders under Central Sales Tax Act, 1956. 24. It is submitted that Section 18 of the TNVAT Act, 2006 contemplates 2 situations, i.e. adjustment of Input Tax Credit towards discharge of tax liability and refund of tax borne on zero rated sale. In this case, the petitioner has adjusted such Input Tax Credit as per Rule 10(9)(a) of the Central Sales Tax (Tamil Nadu) Rules, 1957. 25. The learned counsel further submits that question of filing of Form-W for refund of Input Tax Credit does not arise as the petitioner is in a position to adjust the excess credit towards tax its liability. 26. The learned counsel for the respondent Commercial Tax submits that this Writ Petition lacks merits. It is submitted that since the petitioner had failed to claim Input Tax Credit in time, the adjustment made subsequently by the petitioner towards tax liability for the Assessment Year 2011-2012 under the CST Act, in terms of Rule 5(3-A) of the Tamil Nadu CST Rules, 1957was impermissible. 27. He therefore submits that there is no error in the impugned order passed by the respondent and therefore prays for dismissal of the present Writ Petition. 28. Though several issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of one hundred and eighty days from the date of making zero rate sales accrual of such input tax credit, such credit shall lapse to Government. 30. The petitioner has claimed that it has effected zero rated sale within the meaning of Section 18 of the Tamil Nadu Value Added Tax Act, 2006 and therefore adjusted a sum of ₹ 23,31,952/- from its Input Tax Credit in annual return for Assessment Year 2013-2014 as against the gross tax due for a sum of ₹ 40,60,869/- for Assessment Year 2011- 2012 as determined by the respondent vide order dated 31.07.2014. 31. It is noticed that in first mentioned impugned order, the gross tax payable the petitioner has been re-determined as ₹ 40,60,869/- .Adjustment of input tax credit has been however restricted to ₹ 4,43,946/- as against ₹ 19,25,287/- which was earlier allowed. 32. I shall first deal with the first issue relating to availability of input tax credit under Section 19(5) of the Tamil Nadu Value Added Tax Act, 2006 and the claim of the petitioner for adjustment of the aforesaid input tax credit under the provisions of the Central Sales Tax Act, 1956 read with Rule 3A of the Central Sales Tax (Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006. While, Sub-Section (2)(ii) and Sub-Section (2)(v) to Section 19 of the Tamil Nadu Value Added Tax Act, 2006 seems to allow credit without any limitation, Section 19(5)(c) of the said Act puts a restriction from availing of Input Tax Credit on goods sold as such or used in the manufacture of other goods and sold in the course of inter-State trade and commerce falling under Section 8(2) of the Central Sales Tax Act, 1956. 37. In fact, earlier on 17.01.2005, a White Paper was released by the Committee of Finance Ministers before various VAT laws were enacted by the respective States. There, it was made clear that input tax credit (hereinafter ITC ) would be available to be set-off against tax liability on all intra-State and inter-State sales. Para 2.3 of the same reads as under: Coverage of Set-Off/Input tax credit 2.3. This input tax credit will be given for both manufacturers and traders for purchase of inputs/supplies meant for both sale within the State as well as to other States, irrespective of when these will be utilised/sold. This also reduces immediate tax liability. Even for stock transfer/consignment sale of goods out of the State, input tax pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax (Tamil Nadu) Rules, 1957. 43. The language adopted in Rule 5(3-A) of the Central Sales Tax (Tamil Nadu) Rules, 1957makes it clear that there is a one to one corelation i.e. availing of input tax credit in accordance with Rule 10(9)(a) of the Tamil Nadu Added Tax Rules, 2007 and its ultimate utilization for discharging tax liability under Central Sales Tax Act, 1956 in terms of Rule 5(3-A) of the Central Sales Tax (Tamil Nadu) Rules, 1957. 44. Thus, only if credit is available as per Rule 10(9)(a) of the Tamil Nadu Value Added Tax Rules, 2007 read with Section 9(5) of the Tamil Nadu Value Added Tax Act, 2006 as in force w.e.f. 01.01.2001, it can be adjusted / utilized for discharging tax liability under Central Sale Tax Act, 1956 under Rule 5(3-A) of the Central Sales Tax (Tamil Nadu) Rules, 1957. 45. In TVS Motor Co. Ltd. Vs. State of Tamil Nadu, (2019) 13 SCC 403, the Court had an occasion to consider the following issues answered by this Court:- (1) Whether Section 19(5)( c ) of the TNVAT Act, 2006 and Rule 10(9)( a ) of the TNVAT Rules, 2007 are ultra vires the provision of the CST Act, 1956? (2) Whether the impugned provisions * were in violation of Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usively to the other State Governments (i.e. outside the State of Tamil Nadu), the said States would be deemed as registered dealers for the purposes of availing benefits of ITC. Otherwise, in such a situation, it would be difficult to hold that test of reasonable classification is met in this limited context. It becomes unnecessary to deal with other contentions of MrBagaria . 51. However, to come to the above conclusion, the Court in para 43 held observed, Sub-section (5) stipulates certain contingencies where such ITC would not be admissible. There is no quarrel about clauses ( a ) and ( b ). We are only concerned with clause (c) of this sub-section which provides that ITC would not be allowed on the purchase of goods sold as such or used in the manufacture of other goods and sold in the course of inter-State trade or commerce falling under subsection (2) of Section 8 of the Central Sales Tax Act. To put it tersely, sale by a dealer who is registered in the State of Tamil Nadu which is effected outside the State of Tamil Nadu will qualify for ITC only when the said sale is made to a registered dealer. If it is to an unregistered dealer, it would not be admissible. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funded in accordance with the law to the petitioner. There is no scope for adjustment for past liabilities. 57. Therefore, if the petitioner was otherwise entitled to such refund under Section 18 of the Tamil Nadu Value Added Tax, 2006, instead of refunding the amounts to the petitioner, such amount may be allowed to be set-off against the tax liability in view of the peculiar situation arising out of subsequent development and transition to a different tax regime under the GST Laws with effect from 01.07.2017. 58. Therefore, while dismissing this Writ Petition, I allow the petitioner to file an appeal against the impugned orders within a period of thirty days from date of receipt of a copy of this order before the appellate authority. 59. If such appeal is filed within such time before the appellate authority, the said appellate authority shall decide the case on merits in accordance with law within a period of three months from date of receipt of a copy of this order. 60. It is made clear there will be no waiver from mandatory pre- deposit of the disputed tax liability. However, Input Tax Credit which has remained unutilized under the provision of Tamil Nadu Value Add ..... X X X X Extracts X X X X X X X X Extracts X X X X
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