2015 (8) TMI 1300 - HC - VAT and Sales Tax

Inter-state sale or not - It is stated that the movement of goods took place between Kerala and Tamil Nadu based on the purchase of materials from Tamil Nadu. Therefore they requested the 2nd respondent not to deduct VAT while making payment to them. Therefore they sought a clarification from the authority in terms of Section 94 of the Kerala VAT Act - authority directed to consider the clarification application within a period of two months from the date of receipt of a copy of this judgment.

Summary

Issues: Clarification on VAT deduction for materials purchased from Tamil Nadu for execution of works contract.

Analysis:
1. The petitioner, a registered Class I contractor with the Public Works Department and the Highways Department, sought clarification regarding the deduction of VAT on raw materials purchased from suppliers in Tamil Nadu. They argued that since the movement of goods occurred between Kerala and Tamil Nadu for the purpose of executing works awarded by the State of Kerala, VAT should not be deducted. They referenced Section 94 of the Kerala VAT Act and a previous judgment by the Kerala High Court in the case of FI Design & Development Private Limited vs. State of Kerala to support their position.

2. The learned Government Pleader acknowledged that the clarification application had been received but not yet disposed of. The Court, considering the facts and circumstances, directed the authority to review and decide on the clarification application within a stipulated period of two months from the date of receiving a copy of the judgment. Consequently, the writ petition was disposed of, indicating that the Court's directive to the authority was the resolution sought by the petitioner regarding the VAT deduction issue for materials purchased from Tamil Nadu for works contract execution.