2019 (3) TMI 298 - HC - VAT and Sales Tax

Remand of the case - Refund of input tax credit - opening stock as on 01.04.2005, which was purchased during the previous year when the Kerala General Sales Tax Act was in force - Refund of input tax credit on the close of the year, ie 31.03.2006 - Held that - Admittedly, the Tribunal affirmed the order of the first Appellate Authority. Now, we are informed that the Assessing Officer on the question of input tax credit on the opening stock, has held against the assessee by an order giving effect to the first appellate authorities order - On the question of refund of excess input tax credit on the close of the year also the Assessing Officer verified the documents and held against the assessee. The said order has been upheld in first appeal and is said to be now pending before the Tribunal. We are dismayed that the Assessing Officer, despite an order of the first Appellate Authority confirmed by the Appellate Tribunal, has thought it fit to decline the claim of input tax credit on the opening stock on a verification of the documents. We see from the order of the first Appellate Authority that the documents were verified and the same found to be available in the records at specific pages as mentioned therein and then directed that the refund order would be restored. There is no scope for further verification by the Assessing Authority and the issue stands finalised in first appeal. There can be no remand on that particular issue and the Assessing Officer ought not to have looked into that. The Assessing Officer ought to have issued a modified order maintaining the order of refund on that issue atleast - there is no reason to interfere with the order of the first Appellate Authority as confirmed by the Tribunal on the question of input tax credit on the opening stock maintained as on 01.04.2005. Refund of excess input tax as on 31.03.2006 - Held that - Admittedly, there was an open remand and the Assessing Officer has dealt with the issue to find against the assessee, on which a second appeal is also said to be pending. Hence, we do not think that there can be any interference on the open remand made too. Revision dismissed.

Summary

Issues involved:
1. Refund of input tax credit for opening stock purchased under the Kerala General Sales Tax Act.
2. Refund of excess input tax credit on 31.03.2006 supported by Form 21CC and Form 21B.

Analysis:
1. The High Court addressed the issue of refund of input tax credit for the opening stock purchased under the previous Kerala General Sales Tax Act. The assessee had two claims before the Assessing Officer: one for the opening stock on 01.04.2005 and the other for the close of the year on 31.03.2006. The Kerala Value Added Tax Act allowed the claim of input tax credit for the opening stock processed and sold during the VAT regime's introduction year. The Assessing Officer initially allowed the refund but later sought to reverse the decision. The first Appellate Authority verified the documents and confirmed the availability of records for the opening stock claim. Despite this, the Assessing Officer declined the claim, prompting the High Court to uphold the Appellate Authority's decision, stating that the issue was finalized in the first appeal, and no further verification was necessary.

2. The second issue involved the refund of excess input tax credit on 31.03.2006 supported by Form 21CC and Form 21B. The Appellate Authority remanded this issue for fresh consideration. The Tribunal affirmed this decision. The Assessing Officer, after verification, held against the assessee on both the opening stock and the excess input tax credit claims. The High Court noted that the Assessing Officer should have issued a modified order maintaining the refund on the opening stock issue, as the matter was finalized in the first appeal. Regarding the excess input tax credit on 31.03.2006, an open remand was in place, and the Assessing Officer's decision against the assessee was upheld. The High Court dismissed the revision, emphasizing that the opening stock issue was finalized by the Tribunal and could not be reconsidered by the Assessing Officer, while the excess input tax credit issue remained pending for further appeal.

In conclusion, the High Court upheld the decision regarding the refund of input tax credit for the opening stock purchased under the previous tax regime, emphasizing that the issue was finalized in the first appeal and could not be revisited. The Court also addressed the refund of excess input tax credit on 31.03.2006, noting the open remand and pending appeal, ultimately dismissing the revision and maintaining the decisions made by the Appellate Authority and the Tribunal.