2017 (12) TMI 1482 - HC - VAT and Sales Tax

Refund of input tax credit - export sales - Form W - whether the respondent was justified in simply returning the Form-W, for the reasons assigned in the impugned notice? - Held that - Similar issue decided in the case of R.K. Knits Versus Assistant Commissioner (CT) Adyar II Assessment Circle, Chennai and others 2011 (11) TMI 779 - MADRAS HIGH COURT , where it was held that Admittedly, the dealer had been making a claim in terms of rule 10 (10) in his monthly returns and there was no denial of the fact that the claim had been made within the time specified under the Act. In the face of the admitted fact as to the filing of Form I remaining undisputed, there was no justification in the contention of the Assistant Commissioner that Form W filed beyond 180 days resulted in the rejection of the refund claim. Writ Petitions are disposed of, by directing the petitioners to re-present the Form-W along with the copy of the decision rendered in R.K.Knits, and on receipt of the application/Form-W, the respondent shall afford an opportunity of hearing to the petitioners/Authorized Representative of the petitioners and pass orders on merits and in accordance with law on the Form -W filed by the petitioners.

Summary

Issues involved: Challenge to notices for refund of Input Tax Credit (ITC) for export sales filed beyond prescribed time under TNVAT Act and Rules.

Analysis:

1. The Writ Petition was filed to challenge the notices issued by the Assessing Officer, returning the petitioner's Application filed in Form-W claiming refund of Input Tax Credit (ITC) for export sales beyond the time prescribed under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) and Rules. Section 18(3) of the TNVAT Act states that if a dealer has not adjusted the ITC or made a claim for refund within 180 days, it shall lapse to the Government. Rule 11 of the TNVAT Rules provides for refund and the manner in which it should be made.

2. The Court referred to a previous judgment where a similar issue was considered. In that case, the petitioner had purchased raw materials locally, manufactured cotton knitted fabrics, and exported them to foreign countries. The turnover was reported as 'Zero Rated Sales', and the petitioner claimed a refund as the ITC exceeded the tax liability. The Court held that since the turnover related to export sales attracting zero rates, and the claim was made within the specified time, there was no justification for rejecting the refund claim based solely on the late filing of Form-W.

3. The Court emphasized that the provisions on input tax credit are beneficial and that claims could be made in monthly returns as well. The proper course for the Assessing Officer would be to consider the claim expeditiously and pass orders accordingly. The Court directed the petitioners to re-present Form-W along with a copy of the previous judgment for the Assessing Officer to review and pass orders on the merits and in accordance with the law.

4. The Respondent did not dispute the legal position established in the previous judgment, and therefore, the Court directed the Respondents to consider the matter in line with the decision in the previous case. The Court also allowed petitioners in cases where documents required to accompany Form-W were not annexed to re-submit the form with all relevant documents.

5. The Court gave a timeline of three months for the Respondents to comply with the directions issued, and upon re-presentation of Form-W by the petitioners, the Respondents were instructed to review the applications and pass orders accordingly. The Writ Petitions were disposed of based on the terms mentioned in the judgment, with no costs awarded.