TMI Blog2023 (11) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... een as bringing into operation the prohibition under the 3rd proviso to Section 11(3) in respect of input tax credit and the 3rd proviso to Section 12(1) in the case of special rebate - the question really is not whether the petitioners had an option to avail the exemption envisaged in the notifications or not; rather, the point is that by virtue of the notifications aforementioned, the inter-state sale of rubber had to be seen as exempted for the purposes of the 3rd proviso to Section 11(3) and the 3rd proviso to Section 12(1) of the KVAT Act. The petitioners were therefore not entitled to avail input tax credit of the tax paid on purchases of rubber within the State so long as Annexures-I and II notifications were in force and operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raw rubber from registered dealers and also from growers and sells the same to registered dealers in the State as also to dealers outside the State by way of inter-state sales. It is not in dispute that the petitioners were entitled to avail input tax credit under Section 11 or special rebate under Section 12 of the KVAT Act in respect of the tax paid by them at the time of purchase of raw rubber under Section 6(1) or Section 6(2) of the KVAT Act, as the case may be. Further, under normal circumstances, in terms of Section 11 of the KVAT Act, they could utilise the input tax to pay the output tax on sales effected by them to registered dealers in the State or to dealers outside the State. In the latter event, they would be able to utilise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paid, are sent outside the State or used in the manufacture of goods and the same are sent outside the State, otherwise than by way of sale in the course of inter-state trade or export or where the sale in the course of interstate trade is exempted from tax, the special rebate under this section shall be limited to the amount of such tax paid in excess of four percent: 3. In the case of the petitioners, it is not in dispute that they paid CST in accordance with Section 8(1) of the CST Act, and hence, under normal circumstances, they would have been entitled to take input tax credit of the tax paid at the time of purchase of the rubber within the State/in accordance with Section 11/12 of the KVAT Act. The Assessing Officer, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd II notifications were optional and that the said treatment of those notifications had to be with retrospective effect to cover the periods covered by these O.T. Revisions, the petitioners could avail input tax credit despite the payment of CST on inter-state sales. The Appellate Tribunal found force in the said contention of the petitioners and allowed them to adjust the CST amounts paid by them during the said assessment years on inter-state sales towards the demand raised on them pursuant to disallowance of the input tax credit availed in respect of inter-state sales. 5. The petitioners however were not satisfied with the orders of the Appellate Tribunal and have impugned the same in these O.T. Revisions. It is their contention that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11, which says that, provided that this notification shall be optional to those who continue to pay tax under sub section (1) of section 8 of Central Sales Tax Act, 1956 (Central Act 74 of 1956) for the period from 31st day of July 2008 upto and including 30th June 2017 is the Hon'ble Appellate Tribunal justified in its finding that the dealers engaged in interstate sale have the liability to pay tax due to under the KVAT Act, 2003, where the explanatory note to the notification S.R.O. 521/19 dated 07.08.2019 makes it amply clear that those who have continued to pay tax as per sub-section (1) of section 8 of the said Act shall remain outside the purview of notification S.R.O. 753/2011? C. Where notification S.R.O. 753/2011 was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l submissions, we are of the view that while the contention of the petitioners, relying on the provisions of Section 11/Section 12 of the KVAT Act, may appear persuasive at first blush, on a closer scrutiny of the statutory provisions, we find ourselves unable to accept the said contention. The exemption envisaged in Annexures-I and II notifications has to be seen in the context of the statutory provisions governing input tax credit under the KVAT Act, namely, Sections 11 and 12 therein. While de hors the said provisions, Annexures-I and II notifications may probably be seen as conferring an optional exemption in respect of the tax payable under Section 8(1) of the CST Act, in view of the specific provisions of the 3rd proviso to Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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