2024 (1) TMI 1082 - HC - VAT and Sales Tax

Input tax credit - denial in respect of the export transaction - power of suo motu revision against an order of the Assistant Sales Tax Officer or Sales Tax Officer - HELD THAT - This issue has become academic. More so, when as against the assessment order the writ petitioner had filed an appeal and when the matter was fixed at the appellate stage, an authority who is junior than the appellate authority can obviously not exercise this power of suo motu revision. Above all a Senior Commissioner who is none other than the Commissioner of Sales Tax being a superior authority has sufficient jurisdiction to exercise the power of suo motu revision - the said ground raised by the writ petitioner does not appear consideration and accordingly stands rejected. Input Tax Credit - denial on account of payment made to third party on behalf of the selling dealer - HELD THAT - It is a well settled legal principle that Input Tax Credit is a form of concession provided by the legislator and it is available only if the conditions stipulated are fulfilled. Sub-rule(8) of rule 19 makes it clear that the payment has to be made to the selling dealer by means cheque or demand draft or by means of electronic mode. Therefore, the writ petitioner is precluded from adding words to a stature to state that he will be entitled to the benefit of Input Tax Credit though he is not paid the amount to the selling dealer but to a third party based on certain instructions. The concession can always comes with conditions and if the conditions are not fulfilled the concession is not available. Therefore, the conclusion arrived at by the tribunal in this regard deserves to be confirmed. Thus, no grounds have been made out by the petitioner to interfere with the order passed by the learned tribunal - the writ petition fails and stands dismissed.

Summary

Issues involved: Challenge to order of West Bengal Taxation Tribunal regarding denial of Input Tax Credit (ITC) in export transaction and jurisdiction of Special Commissioner to set aside assessment order.

Issue 1 - Denial of ITC in export transaction:
The petitioner challenged the order denying ITC in respect of the export transaction, despite the Assessing Officer initially allowing the claim. The appellate authority later allowed the appeal, but the Special Commissioner set aside the assessment order granting ITC. The petitioner argued that the Special Commissioner had no jurisdiction under Rule 142 of the West Bengal Value Added Tax Rules, 2005, which specifies the authority entitled to issue suo motu revision orders. The tribunal held that the appellate authority has powers similar to the assessing officer, including modifying the assessment order, and that the Special Commissioner rightly exercised suo motu revision powers under Section 85 of the West Bengal VAT Act.

Issue 2 - Jurisdiction of Special Commissioner:
The petitioner contended that the Special Commissioner was not the appropriate authority to exercise revision powers. However, the Notification by the State Government appointed the Special Commissioner to perform duties of the Commissioner of Sales Tax, making the Special Commissioner the Commissioner for all purposes under Section 85 of the Act. The tribunal concluded that the Special Commissioner, being a superior authority, had jurisdiction to exercise the power of suo motu revision. The petitioner's argument based on Rule 142 of 2005 rules was deemed academic, as a junior authority cannot exercise revision powers against an appellate order.

Conclusion:
The tribunal upheld the denial of Input Tax Credit based on the legal principle that concessions like ITC are subject to fulfillment of stipulated conditions. As the petitioner failed to meet the condition of payment to the selling dealer by specified means, the denial of ITC was justified. Consequently, the writ petition challenging the tribunal's order was dismissed, with no costs imposed.