2017 (9) TMI 979 - HC - VAT and Sales Tax

Interpretation of statute - refund - reversal of input tax credit - Section 19 (2) (v) of the Tamil Nadu Value Added Tax Act, 2006 - Held that - similar issue decided in the case of M/s. Everest Industries Limited Versus The State of Tamil Nadu, The Deputy Commissioner (CT) (FAC) 2017 (3) TMI 279 - MADRAS HIGH COURT , where it was held that A plain reading of the provisions of sub-section (1) and sub-section (2) of Section 19 of the 2006 Act would show that, as long as specified goods, which suffer tax are used for any of the purposes set out in clauses (i) to (vi) of sub-section (2) of Section 19, the assessee should be able to claim the ITC, with a caveat in so far as clause (v) is concerned - the respondent directed to take note of the decision of the Court in M/s. Everest Industries Ltd. s case and pass decision on merits - petition allowed by way of remand.

Summary

Issues:
- Refund of Input Tax Credit under Section 19 (2) (v) of the Tamil Nadu Value Added Tax Act, 2006 for the assessment year 2013-14.

Analysis:
1. The petitioner sought to quash the order rejecting their refund application and requested the court to direct the respondent to refund the amount. The court referred to a previous case and highlighted the decision related to interpretation of proviso to Section 19 (2) (ii) of the TNVAT Act. The court emphasized that a dealer is entitled to claim Input Tax Credit (ITC) for specified goods used for specific purposes, subject to certain limitations. The court clarified that the limitation provided in the proviso applies only to certain purposes specified in the clause and not to all purposes outlined in the Act.

2. The court noted that the insertion of the proviso had caused difficulties for manufacturers, affecting their competitiveness. The court referred to the Statement of Objects and Reasons indicating the withdrawal of the input tax credit reversal to enhance the competitiveness of manufacturing industries in Tamil Nadu. The petitioner relied on a previous decision and made a representation seeking a refund based on the court's ruling. The respondent, however, rejected the refund application, stating that the petitioner was not a party to the previous decision. The court found this reasoning erroneous, emphasizing that being a party to the previous decision was not a prerequisite for seeking a refund based on that decision.

3. The court considered the respondent's argument regarding pending appeals by the State against similar decisions. The court clarified that the pendency of appeals without an interim order does not stay the implementation of the lower court's decision. The court directed the respondent to reconsider the petitioner's representation in light of the previous decision and pass appropriate orders within a specified timeframe. The court allowed the writ petition, set aside the impugned order, and remanded the matter to the respondent for fresh consideration based on the court's decision in the previous case.

This detailed analysis highlights the court's interpretation of the relevant legal provisions, the impact of previous decisions on the current case, and the procedural aspects related to refund applications and pending appeals.