2018 (5) TMI 1812 - HC - VAT and Sales Tax

Scope of deferred tax within the meaning of Section 61(2)(d)(iii) of the Haryana Value Added Tax Act, 2003 read with Rule 69 of Haryana Value Added Tax Rules, 2003 - whether input tax paid by the assessee can be counted towards payment of 50% of deferred tax upfront under Section 61(2)(d)(iii) of the Haryana Value Added Tax Act, 2003? - Held that - In case the unit opts for payment of half of the deferred tax upfront alongwith the returns, the deferred tax would be calculated without deducting the amount of input tax paid on the goods used in the manufacture and the amount of input tax paid by it is to be counted towards payment of 50% of deferred tax upfront. The substantial questions of law are answered accordingly and the appeal stands dismissed.

Summary

Issues:
1. Interpretation of deferred tax under the Haryana Value Added Tax Act, 2003.
2. Whether input tax paid by the assessee can be counted towards payment of deferred tax upfront.

Analysis:

Issue 1: Interpretation of deferred tax under the Haryana Value Added Tax Act, 2003
The appellant-revenue filed an appeal challenging the order of the Haryana Tax Tribunal regarding the calculation of deferred tax under the Haryana Value Added Tax Act, 2003. The respondent assessee, engaged in manufacturing and sale of Sheet Metal components & Auto Parts, was granted an exemption certificate for tax deferment. The Assessing Authority created an additional demand under the CST Act, which the assessee contested, claiming the benefit of deferment under Section 61(2)(d)(iii) of the HVAT Act. The Tribunal allowed the appeals based on a previous judgment and the appellant-revenue appealed against this decision.

Issue 2: Input tax payment towards deferred tax upfront
The Court examined whether the input tax paid by the assessee could be considered for payment of deferred tax upfront under Section 61(2)(d)(iii) of the HVAT Act. Referring to a previous case, the Court concluded that the deferred tax should be calculated without deducting the input tax paid on goods used in manufacturing. The Court emphasized that if the unit opts to pay half of the deferred tax upfront, the calculation should not deduct the input tax paid. The Court highlighted that the input tax paid should be counted towards the payment of 50% of the deferred tax upfront, as per the provisions of the HVAT Act and relevant rules.

In light of the interpretation provided in the previous case, the Court dismissed the appeal, stating that the substantial questions of law were answered accordingly. The Court also dismissed the application for condonation of delay in filing the appeal due to the dismissal of the appeal on merits. The judgment reaffirmed the calculation method for deferred tax and the treatment of input tax payments under the HVAT Act.