2014 (8) TMI 257 - HC - VAT and Sales Tax

Denial of Input tax credit - Whether in case an assessee has purchased a property from a registered dealer, thus, when the assets were resold by the assessee, it was entitled to claim input tax credit on such purchases - Held that - Tribunal has come to a factual finding that full details of sales and purchases and the tax paid was available on record, despite which, the Appellate Authority summarily dismissed the appeal observing that no such details are produced. The Tribunal came to the conclusion that the appellant had purchased the property from Cynemid, which purchases were from registered dealer, therefore, when the assets were resold by the assessee, it was entitled to claim input tax credit on such purchases. The assets were purchased by the assessee from Cynemid, and later on transferred to Atul Pharma. All the entities are registered dealers registered under the Gujarat Sales Tax Act. The deed of assignment was also produced on record, which contains all the details. So far as moveable assets are concerned, the assessee also produced invoices for the same. In such background, the Tribunal overrules the findings of the Appellate Authority that no details were furnished. These are thus pure factual findings giving rise to no question of law - Decided against Revenue.

Issues Involved:
1. Challenge to the judgment of the Gujarat Value Added Tax Tribunal.
2. Dismissal of appeal by the Appellate Authority.
3. Claim of input tax credit on purchases from a registered dealer.
4. Disallowance of set off under Rule 42.
5. Factual findings leading to no question of law.

Analysis:

1. The Tax Appeal was filed by the State challenging the judgment of the Gujarat Value Added Tax Tribunal, where the respondent's appeal was allowed. The Assistant Commissioner had raised a tax demand against the respondent, who then appealed to the Appellate Commissioner. The Tribunal remanded the proceedings to decide on merits, but the Appellate Authority summarily dismissed the appeal for lack of sufficient details. The Tribunal found that the appellant purchased assets from a registered dealer, making them eligible for input tax credit. The Tribunal concluded that the Appellate Authority's dismissal was unjustified as full details were available, leading to no question of law arising from these factual findings.

2. Regarding the disallowance of set off under Rule 42, the Tribunal noted that the authorities had relied on a previous decision that was later reversed by the High Court. The Tribunal acknowledged that the decision in the case of Ami Pigments held the field on this matter. The Tax Appeal was ultimately dismissed, and the Civil Application for stay was disposed of accordingly.

3. The Tribunal's detailed observations highlighted that the appellant had purchased assets from a registered dealer, entitling them to claim input tax credit on subsequent sales. The deed of assignment and invoices provided by the appellant contained all necessary details. The Tribunal disagreed with the Appellate Authority's view that no details were furnished, emphasizing the availability of comprehensive evidence supporting the appellant's case.

4. The Tribunal's decision emphasized the significance of factual findings in determining the eligibility for input tax credit and the validity of set off under Rule 42. The Tribunal's analysis underscored the importance of proper documentation and legal precedents in resolving tax disputes effectively.

5. The judgment provided a comprehensive analysis of the factual and legal aspects of the case, ultimately leading to the dismissal of the Tax Appeal. The Tribunal's reasoning and reliance on relevant legal principles, including the decision in the case of Ami Pigments, demonstrated a thorough consideration of the issues at hand and the applicable legal framework.

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