2025 (4) TMI 241 - HC - VAT / Sales Tax

Denial of Input Tax Credit (ITC) under the Orissa Value Added Tax Act 2004 - deemed sale or not - HELD THAT - There is no illumination in impugned order though ground taken was mentioned inter alia in clause (iii) of the recital of the grounds in impugned order. In the circumstances considering petitioner was entitled to raise all grounds as recorded in said order dated 21st February 2023 made in presence of revenue the order is set aside and the appeal restored to the authority. Petition disposed off.

Summary

In the case before the Orissa High Court, the petitioner challenged an appellate order dated March 30, 2024, which denied Input Tax Credit (ITC) under the Orissa Value Added Tax Act, 2004. The petitioner, represented by Senior Advocate Mr. Arvind Datar, argued that the denial was based on the misapplication of Section 20(8)(c) of the Act. The petitioner contended that the capital goods in question, used for manufacturing and subsequently leased back to the seller, qualified for ITC. Furthermore, the petitioner claimed that Section 20(3), applicable to dealers, should have been considered, as the petitioner was not a manufacturer, and this point was ignored in the impugned order.Mr. Sunil Mishra, representing the revenue, argued that the denial was justified, asserting that the goods were second-hand and used for manufacturing, thus falling under Schedule 'D' which bars ITC. He maintained that Section 20(8)(c) was correctly applied, and Section 20(3) was inapplicable.The court noted that the appellate order failed to address all grounds raised by the petitioner, which were left open by a previous order dated February 21, 2023. Consequently, the court set aside the impugned order and remanded the appeal back to the authority for reconsideration, allowing the petitioner to present all relevant grounds. The writ petition was thereby disposed of.