2024 (4) TMI 621 - HC - VAT and Sales Tax

Time limitation for availing Input Tax Credit - Validity of reassessment order and demand notices - Availment of Input Tax Credit by filing belated returns - HELD THAT - In BEML's case 2023 (1) TMI 341 - KARNATAKA HIGH COURT , the Division Bench held 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. Apart from setting aside the impugned orders passed by the Joint Commissioner of Commercial Taxes, the impugned reassessment orders at Annexures-'H1' to 'H3' and consequent demand notices at Annexures- 'J1' to 'J3' also deserves to be set aside. Petition allowed.

Summary

Issues involved:
The issues involved in the judgment include challenging orders under section 62(6) and 39(2) u/s 36(1) and 72(2) of the KVAT Act, demand notices under Rule 180(1) of the KVAT Rules, and appeals before the Joint Commissioner of Commercial Taxes (Appeals) regarding Input Tax Credit and belated returns.

WP No. 3685/2024:
The petitioner sought relief in quashing orders dated 30.10.2023 and 31.10.2023 under section 62(6) of the KVAT Act, as well as orders dated 26.11.2020 and 27.11.2020 under section 39(2) r.w.s 36(1) and 72(2) of the KVAT Act. The petitioner challenged demand notices dated 26.11.2020 and 27.11.2020 issued under Rule 180(1) of the KVAT Rules. The court allowed WP No. 3685/2024 and set aside the mentioned orders and demand notices, thereby disposing of the case.

WP No. 15057/2021:
In this case, the petitioner sought relief in quashing an order dated 20.07.2021 under section 69(1) of the KVAT Act, and requested rectification applications for the tax periods 2006-07 to 2008-09. The petitioner also requested not to enforce demands until disposal of appeals against the orders dated 26.11.2020 and 27.11.2020 by the JCCT(Appeals). The court disposed of WP No. 15057/2021 as a consequence of setting aside the assessment orders and demand notices in WP No. 3685/2024.

Judgment Details:
The Senior Counsel for the petitioner referred to re-assessment orders and demand notices, highlighting the pending appeals before the Joint Commissioner of Commercial Taxes (Appeals). The issue of Input Tax Credit was extensively discussed, citing the judgment in BEML's case and its confirmation by the Supreme Court. The court agreed with the petitioner's contentions and set aside the impugned orders and demand notices, in line with the legal principles established in previous cases. The judgment emphasized the indefeasible right to input tax credit and directed the respondents to drop all further proceedings against the petitioner.

Conclusion:
The High Court allowed WP No. 3685/2024, setting aside specified orders and demand notices. Consequently, WP No. 15057/2021 was disposed of, and the respondents were directed to cease further proceedings. The judgment reaffirmed the importance of input tax credit as an indefeasible right, in line with established legal precedents.