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2022 (3) TMI 46 - HC - VAT and Sales TaxInput Tax Credit - petitioner has not fully complied with the requirements of Sub-Rule (1) and Sub-Rule (2) of Rule 38 of the Rules of 2006. - HELD THAT - The claim of input tax credit by a registered dealer is required to be examined taking into consideration not only Section 18 of the Act of 2003 providing for input tax credit, but also other provisions contained in the Act of 2003 as also the Rules framed under the Act of 2003. While Section 18 of the Act of 2003 provides for input tax credit, Section 72 of the Act of 2003 read with Rule 38 of the Rules of 2006 provides contingencies when input tax credit may not be allowed. On the face of clear provision contained in Rule 38, Sub-Rule (3) of the Rules of 2006, the claim of input tax credit, which is otherwise available under Section 18 of the Act of 2003, may be disallowed as the mandate of law is clear that unless the dealer makes full compliance of Sub-Rule (1) and Sub-Rule (2) of Rule 38 of the Rules of 2006, input tax credit shall not be allowed. The provisions contained in Section 18 of the Act of 2003, Rule 18 of the Rules of 2006 as also Section 72 of the Act of 2003 and Rule 38 of the Rules of 2006 had to be read conjointly and not in isolated manner. It is petitioner s own admission and undisputed fact that various cash transactions were made and the authorities found that invoices in respect of various transactions were not issued - there are no ground to interfere with the impugned order in exercise of our revisional jurisdiction under Section 84 of the Act of 2003. Revision petition dismissed.
Issues: Claim of input tax credit disallowed under Rajasthan Value Added Tax Act, 2003
Analysis: The judgment involves a revision petition under Section 84 of the Rajasthan Value Added Tax Act, 2003, challenging the order of the Rajasthan Tax Board disallowing the petitioner's claim of input tax credit. The petitioner contested that the denial of input tax credit was not valid as it should be allowed for the purchase of taxable goods from a registered dealer, citing Section 18 of the Act of 2003 and Rule 18 of the Rajasthan Value Added Tax Rules, 2006. However, the Board disallowed the claim based on the petitioner's non-compliance with the requirements of Rule 38 of the Rules of 2006. The provision of Rule 18 of the Rules of 2006 outlines the computation of input tax credit, emphasizing the necessity of the original VAT invoice for claiming such credit. Additionally, Section 72 of the Act mandates registered dealers to issue VAT invoices for each sale, failing which penalties may be imposed. Sub-Rule (3) of Rule 38 specifies that no input tax credit shall be allowed unless the dealer fully complies with Sub-Rule (1) and Sub-Rule (2) of Rule 38. The judgment underscores the importance of interpreting Section 18 of the Act of 2003, Rule 18 of the Rules of 2006, Section 72 of the Act, and Rule 38 of the Rules of 2006 collectively rather than in isolation. The court upheld the Board's decision, highlighting the petitioner's admission of non-issuance of invoices for various cash transactions, which led to the denial of input tax credit. Consequently, the revision petition was dismissed, affirming the Board's order. In conclusion, the judgment clarifies the stringent requirements for claiming input tax credit under the Rajasthan Value Added Tax Act, emphasizing compliance with invoicing regulations as a crucial factor in determining the eligibility for such credit.
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