9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 341 - HC - VAT and Sales TaxValidity of assessment order - reversal of Input Tax Credit - inputs damaged in transit or destroyed at some intermediary stage of manufacture - Section 19(9) sub-clause (iii) of TNVAT Act - periods 2008-09 to 2012-13 and 2011-12 to 2016-17 - HELD THAT - Issue decided in the case of M/S. ARS STEELS ALLOY INTERNATIONAL PVT. LTD. VERSUS THE STATE TAX OFFICER, GROUP I, INSPECTION, INTELLIGENCE I, CHENNAI 2021 (6) TMI 957 - MADRAS HIGH COURT where it was held that the reversal of ITC involving Section 17(5)(h) by the revenue, in cases of loss by consumption of input which is inherent to manufacturing loss is misconceived, as such loss is not contemplated or covered by the situations adumbrated under Section 17(5)(h). The only difference between the matters covered by the above order and the present matters would be that the impugned orders in these matters are passed under the provisions of the TNVAT Act. The applicable provisions, Section 17(5)(h) of the TNGST Act and Section 19(9)(iii) of the TNVAT Act are in pari materia - petition allowed.
Issues:
Challenge to assessment orders under TNVAT Act for the periods 2008-09 to 2012-13 and 2011-12 to 2016-17 regarding reversal of input tax credit (ITC) under Section 19(9)(iii) related to damaged inputs. Analysis: The judgment dealt with the challenge to assessment orders under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) for specific periods. The main issue revolved around the reversal of input tax credit (ITC) under Section 19(9)(iii) concerning inputs damaged in transit or destroyed at an intermediary stage of manufacture. The court referred to a previous case involving a similar issue under the Tamil Nadu General Sales Tax Act, 1959, where it was held that loss inherent to the manufacturing process cannot be equated to instances outlined in the provision for ITC reversal. The court analyzed the legislative history of the TNVAT Act, emphasizing the provisions of Section 19 related to ITC eligibility and denial. It highlighted that the loss occurring due to consumption in the manufacturing process is inherent and not covered by the situations specified for ITC reversal. The judgment also compared the TNVAT Act provisions with Section 17 of the GST Act, which echoes similar principles regarding ITC entitlement and restrictions. Furthermore, the court referenced a previous case regarding entitlement to Cenvat credit, where it was established that some loss of input during the manufacturing process is inevitable. The judgment reiterated that the reversal of ITC based on inherent manufacturing loss is misconceived and not covered under the relevant provisions. Consequently, the impugned orders were set aside, and the writ petitions were allowed, with no costs imposed. In conclusion, the court reaffirmed its earlier decision and applied the same reasoning to the present matters, as the provisions under the TNVAT Act were found to be in pari materia with those under the TNGST Act. Therefore, the impugned orders were set aside, and all writ petitions were allowed, with connected miscellaneous petitions closed and no costs imposed.
|
