2009 (10) TMI 831 - HC - VAT and Sales Tax

Input tax credit in respect of the stock held by the dealer-respondent - Held that - The instant appeal is squarely covered by the Division Bench judgment rendered in the case of City Petro 2009 (1) TMI 789 - PUNJAB AND HARYANA HIGH COURT . Therefore, following the same reasoning the appeal is dismissed.

Summary

Issues:
Challenge to order under Punjab Value Added Tax Act - Input tax credit claim - Time-limit for filing claim - Interpretation of appointed day for counting period - Legislative intent and VAT Rules.

Analysis:
The High Court judgment involved an appeal filed by the Revenue challenging an order passed by the Value Added Tax Tribunal regarding the input tax credit claim under the Punjab Value Added Tax Act. The Tribunal allowed the input tax credit claim for the dealer-respondent despite a delay in filing the application, leading to the Revenue's appeal. The controversy centered around the interpretation of the time-limit for filing the claim and the appointed day for counting the period. The Division Bench of the High Court had previously addressed a similar issue in the case of State of Punjab v. City Petro, where it was held that the period for filing the claim should be reckoned from the date of publication of the VAT Rules, not the appointed day, to align with the legislative intent and make the VAT Rules workable.

The Division Bench's judgment emphasized that the legislative intent behind sections 13 and 14 of the VAT Act was to allow dealers to claim input tax credit subject to certain conditions within a specified period. The court highlighted that a period of 45 days should be counted from the date of publication of the VAT Rules to ensure the effective functioning of the statute. The judgment underscored the principle of purposive construction in interpreting statutes like the VAT Act to advance the legislative objectives and rule-making authorities' intentions. The court rejected the Revenue's argument that the period should be calculated from the appointed day, emphasizing that such an interpretation would defeat the statute's purpose and burden dealers with additional taxes on goods already subjected to sales tax.

The High Court further cited subsequent Division Bench judgments in cases like State of Punjab v. Indian Colour Centre and Lahori Mal Bimal Chand Jain v. State of Punjab, which reiterated the principles established in the City Petro case. The court concluded that the instant appeal fell within the purview of the City Petro judgment and dismissed the appeal based on the same reasoning. As the appeal was disposed of on merit, the court found no need to pass any additional orders related to the civil miscellaneous application filed alongside the appeal, thereby concluding the matter comprehensively.