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2023 (1) TMI 341 - KARNATAKA HIGH COURTInput tax credit - eligibility of benefit of input tax credit claimed after six months from the date of invoice - Section 10(3) of the K-VAT Act - tax period April 2010 to March 2011 - HELD THAT:- The amended After 2015 amendment w.e.f 01.04.2015., provision of Section 10(3) of the KVAT Act clearly provides that the input tax availed by a dealer in a tax period shall be relatable to goods purchased during immediately preceding five tax periods of such tax period and shall be accounted for in accordance with the provisions of KVAT Act. In the connected appeal, M/s Sonal Apparel Pvt Ltd. v. State of Karnataka & Ors [2016 (3) TMI 1286 - KARNATAKA HIGH COURT], the assessees have raised a common ground challenging the Section 10(3) of the KVAT Act, as ultra vires the Constitution of India as well as the object and Scheme of the KVAT Act - Hon’ble Single Judge held that Section 10(3) of the KVAT Act, prior to its amendment vide the Karnataka Value Added Tax (Amendment) Act, 2015, shall be read down to enable the petitioners to calculate the net tax liability by deducting the input tax paid on its purchases from its output tax liability, irrespective of the month in which the selling dealer raises invoices. It is settled that the input tax credit is an indefeasible right. The main issue is whether the assesses who have filed the returns belatedly are entitled for input credit or not. A plain reading of provision of Section 10(3) of the KVAT Act, 2003, shows that no time limit or restriction is prescribed for availing the input tax credit. In Dai Ichi Karkaria Ltd. [1999 (8) TMI 920 - SUPREME COURT], the Apex court has held that credit is indefeasible. The Modvat credit is similar to the Input Tax Credit in this case. Therefore, no exception can be taken to the view taken by the Hon’ble Single Judge that the Input Tax Credit cannot be denied on the anvil of the machinery provisions or the provisions relating to the time frame. The assessees shall be eligible to avail the input tax credit as and when the tax is paid by them, without any limitation of time - Petition allowed.
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