2023 (1) TMI 294 - HC - VAT and Sales Tax

Rectification of mistake - mistake apparent on the face of record - Interpretation of Statute - Section 19(5)(a) read with Section 17 and Section 2(20) as well as Section 30 of the Act - reversal of ITC - G.O.Ms.No.103 dated 01.08.2012 - G.O.Ms.No.155 dated 08.12.2012 - G.O.Ms.No.6 dated 06.02.2013 - HELD THAT - Section 84 provides for the rectification of an error apparent on record and not one which involves discussion, debate or possible multiple opinions. This is a settled position as per several judgments of the Hon ble Supreme Court and High Courts - What has to be borne out by process of reasoning taking note of rival contentions and differing points of view is not liable to be addressed under Section 84, the purpose of which is only to correct an apparent and evident mistake. None of the Notifications in this case touch upon the aspect of Input Tax Credit in the hands of the selling dealers, and had they done so, the officer would perhaps have been right in stating that the grant of ITC even in the place of such express provision for reversal in the Notification, was an error apparent on record. Since the Notification did not mention anything about ITC or reversal, the impugned proceedings would also have to be tested in the context of whether at all Section 84 could be applied in this case, and thus fail. The impugned orders are quashed and these writ petitions are allowed.

Summary

Issues Involved:
1. Exemption from tax on the sale of furnace oil.
2. Reversal of Input Tax Credit (ITC) under Section 19(5)(a) of the Tamil Nadu Value Added Tax Act, 2006.
3. Applicability of Section 84 for rectification of an error apparent on record.

Issue-wise Detailed Analysis:

1. Exemption from Tax on the Sale of Furnace Oil:
The petitioner, an oil manufacturing company, sought and obtained tax exemptions on the sale of furnace oil to High Tension (HT) industrial consumers during periods of power shortages in Tamil Nadu. The exemptions were granted through three Government Orders (G.O.s) issued under Section 30 of the Tamil Nadu Value Added Tax Act, 2006. These orders covered specific periods between 2012 and 2013 and included conditions such as the production of certificates and the refund of VAT paid upon compliance with the conditions.

2. Reversal of Input Tax Credit (ITC) under Section 19(5)(a):
The respondent proposed to reverse the ITC availed by the petitioner for the period from 01.02.2012 to 06.02.2013, arguing that the transactions were exempt under Section 30 and thus should not attract ITC. The petitioner contended that Section 19(5)(a) applies only to goods exempted under the Fourth Schedule and not to transactions exempted under specified conditions or events. The court examined the distinction between exempted goods and exempted transactions, referencing the Supreme Court's judgment in Commercial Taxes Officer v. A Infrastructure Limited. The court concluded that the exemption granted under Section 30(1)(c) involves a combination of specified goods and assessees, which does not fall under the purview of Section 19(5)(a).

3. Applicability of Section 84 for Rectification of an Error Apparent on Record:
The court addressed the respondent's invocation of Section 84, which allows for the rectification of an error apparent on record. The court noted that Section 84 is intended for correcting evident mistakes and not for issues that require discussion or multiple opinions. Since the notifications did not explicitly mention the reversal of ITC for the selling dealers, the court determined that the proceedings for rectification under Section 84 were not applicable in this case.

Conclusion:
The court quashed the impugned orders and allowed the writ petitions, directing the Sales Tax Appellate Tribunal to dispose of the appeal in line with the court's observations. The court emphasized that the notifications did not stipulate the denial of ITC for the selling dealers, and thus, the reversal of ITC was not justified. The proceedings under Section 84 were also deemed inappropriate as they involved issues requiring detailed reasoning and consideration of differing viewpoints.