2014 (7) TMI 970 - HC - VAT and Sales Tax

Denial of Input tax credit - Violation of section 18(1) of the Act of 2003 - Tax Board decided in favour of assessee - Held that - Tax Board, by the impugned judgment and order, has recorded a categorical finding that the respondent-assessee has not violated section 18(1) of the Act of 2003 and input-tax credit has been rightly allowed to the assessee. The learned Tax Board has also concluded in clear and unequivocal terms that the assessee has already paid the requisite tax on the purchase price. The finding of the learned Tax Board is also clear and unequivocal that the assessee-trader has reduced the purchase by minimising the trade discount. The learned Tax Board has also examined the newly added section 18(3A) of the Act of 2003 which was enforced with effect from March 9, 2011 and concluded that the learned first appellate authority has not properly thrashed out the matter in the light of prevailing law on the subject, i.e., anterior to March 9, 2011 - there is no infirmity much less legal infirmity in the impugned order passed by the learned Tax Board and consequently no interference is warranted. Accordingly, Decided against Revenue.

Summary

Issues:
Revision petition under section 84 of the Rajasthan Value Added Tax Act, 2003 against judgment of the Rajasthan Tax Board regarding violation of section 18(1) and input-tax credit, payment of requisite tax, trade discount, and application of section 18(3A).

Analysis:
The High Court, in the present case, dealt with a revision petition filed by the petitioner-Revenue against the judgment of the Rajasthan Tax Board. The Tax Board had found that the respondent-assessee did not violate section 18(1) of the Act of 2003 and had rightly allowed input-tax credit, affirming that the assessee had paid the necessary tax on the purchase price and had appropriately reduced the purchase by minimizing the trade discount. The Tax Board also analyzed the newly added section 18(3A) of the Act, effective from March 9, 2011, and determined that the first appellate authority had not adequately considered the matter in light of the law prevailing before March 9, 2011. Consequently, the Tax Board set aside the order of the first appellate authority.

Upon a thorough examination of the entire matter, the High Court concluded that there was no legal infirmity in the judgment of the Tax Board. The Court held that no interference was warranted with the Tax Board's decision and dismissed the revision petition. Additionally, the Court addressed the contention raised by the counsel for the Revenue regarding potential pilferage of revenue. The Court opined that the issue of revenue pilferage could be examined in a suitable case, but in the present matter, it was not relevant, indicating that the question of revenue pilferage was not a subject of concern in the case at hand and could be a matter for judicial scrutiny in a different context.