2017 (9) TMI 284 - HC - VAT and Sales Tax

Refund the amount of input tax credit (ITC) reversed by the petitioner - Section 19 (2) of TNVAT Act, 2006 - Held that - The settled legal position being that, mere pendency of the Appeal without interim order will not amount to the grant of stay of the order passed by the Lower Court or Lower Forum. In the instant case, it appears that the Appeals filed by the State are yet to be numbered. Therefore, this Court is inclined to issue appropriate direction in this Writ Petition - respondent directed to consider the petitioner s representation, dated 25.07.2017.

Summary

Issues:
1. Interpretation of proviso to Section 19(2)(ii) of TNVAT Act.
2. Claim for refund of input tax credit (ITC) reversed by the petitioner.
3. Pending appeals by the State against a previous decision.

Analysis:
1. The petitioner, a registered dealer under TNVAT Act and Central Sales Tax Act, sought a Writ of Mandamus to direct the respondent to consider their representation for refunding reversed ITC. The petitioner relied on a previous judgment involving the interpretation of the proviso to Section 19(2)(ii) of TNVAT Act. The court analyzed the provisions and concluded that the proviso limits ITC to be allowed in excess of 3% of tax paid on purchases specified in the First Schedule for certain purposes, clarifying that the limitation applies only to specific clauses and not all purposes under Section 19(2).

2. The petitioner argued that the reversal of ITC was not tenable based on the court's previous decision. The respondent, however, opposed the relief, stating that the State had filed appeals against the previous judgment, which were pending. The court noted that the mere pendency of appeals without an interim order does not stay the previous order. While acknowledging the pending appeals, the court directed the respondent to consider the petitioner's representation in light of the previous judgment and pass appropriate orders within eight weeks.

3. The court disposed of the Writ Petition by directing the respondent to consider the petitioner's representation based on the previous judgment and issue orders accordingly within the specified timeframe. The court emphasized that the directions should be followed in accordance with the law. The decision highlighted the importance of considering representations and issuing orders promptly, even in the presence of pending appeals, to ensure timely resolution of legal matters.