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2022 (8) TMI 979 - HC - VAT and Sales TaxValidity of assessment order - Reversal of ITC - Cash refund of Input Tax Credit - Section 19(2)(v) of TNVAT Act - HELD THAT - The Scheme provided for a cash refund of input tax upon condition that the petitioner had not availed the benefit of reversal as provided for under Section 19(2)(v) of the Act. In the absence of a claim or credit, the question of reversal does not arise. It was for this purpose and in light of the distinction made that the Division Bench had set aside the order of the learned single Judge that had been passed on the anvil of Section 19(2)(v), remanding the matter to the file of the learned single Judge for decision in regard to the distinction made by the petitioner - Since the decision on the aspect of applicability of Section 19(2)(v) impacts the case of manufacturers as well, of which the petitioner is, admittedly, one, the petitioner does not wish to make a foray into the argument taken by it in W.A.No.1654 of 2019 2018 (3) TMI 1272 - MADRAS HIGH COURT . It merely wishes to obtain the benefit of the decision of the Division Bench in W.A.No.1260 of 2017 2022 (4) TMI 1204 - MADRAS HIGH COURT . There are no divergent views on the narration as captured in the preceding paragraphs and in light of the same, this Writ Petition is liable to be allowed.
Issues:
Challenge to assessment order under Tamil Nadu Value Added Tax Act, 2006 for the period 2013-14 based on reversal of Input Tax Credit (ITC) under Section 19(2)(v) - Impact of Division Bench judgment in W.A.No.1260 of 2017 on reversal of ITC for manufacturers - Distinction based on incentive scheme under G.O.Ms.No.101 dated 23.04.2008. Analysis: The petitioner challenged an assessment order under the Tamil Nadu Value Added Tax Act, 2006 for the period 2013-14, concerning the reversal of Input Tax Credit (ITC) under Section 19(2)(v). A learned single Judge's decision was disposed following the ratio from a batch of Writ Petitions, including the case of The State of Tamil Nadu v. M/s.Everest Industries Limited, which touched upon the reversal of ITC. The State filed Writ Appeals against the decision, with one pertaining to the petitioner remanded to the file of the learned single Judge by a Division Bench. The Division Bench judgment in W.A.No.1260 of 2017 favored the assessee, stating that ITC under Section 19(2)(v) is not to be reversed for manufacturers. The judgment emphasized the retrospective and curative nature of the amendment to Section 19(2), restoring the benefit of ITC to all dealers effecting interstate sales. The petitioner's case aligns with this decision, impacting manufacturers' right to avail ITC under the Act. The matter was remanded to the learned single Judge due to a distinction made by the petitioner regarding an incentive scheme under G.O.Ms.No.101 dated 23.04.2008, providing for a cash refund of input tax if the petitioner had not availed the reversal benefit under Section 19(2)(v). The Division Bench set aside the earlier order, focusing on the petitioner's unique position without a claim or credit, thus avoiding the reversal issue. Considering the impact of Section 19(2)(v) on manufacturers, the petitioner sought to benefit from the Division Bench's decision without delving into further arguments. The unanimous view on the facts presented in the case led to the allowance of the Writ Petition without costs, with the respondent indicating a potential challenge to the Division Bench's decision in the Supreme Court. If the Division Bench's decision is overturned, the petitioner may pursue the alternate argument related to the incentive scheme. In such a scenario, thorough verification by authorities is required before any decision is made. The Writ Petition was allowed based on the above terms, with the connected Miscellaneous Petition closed.
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