2014 (4) TMI 545 - HC - VAT and Sales Tax

Whether Addl. CCT(R) was justified in denying the registered dealer purchases and thus rejecting the input tax claim made by assessee u/s 10 of the Act - Bonafide Registered dealer Section 10 of the Karnataka Value Added Tax, 2003 - Held that - For the assessment year 2005-06 the TIN number of M/s. Healthy Life Agro Foods, Bangalore was not in existence - Only on 19-02-2014, the HEALTHY LIFE, and others of HEALTHY LIFE was registered under the Act with different TIN number Therefore, the dealer has failed to establish that the selling dealer M/s. Healthy Life Agro Foods, Bangalore is a bonafide registered dealer borne on the file of any local VAT office - Section 70 casts burden on the appellant to prove that any transaction of the dealer for the purposes of payment of tax or assessment of tax or any claim to input tax under the Act - However, the appellate had not discharged the burden cast upon it by producing necessary documents - Hence appellant is not entitled for input tax credit in respect of edible oil purchased from M/s. Healthy Life Agro Foods, Bangalore Decided against assessee. Input Tax Credit Entitlement for Deduction of input tax - Input tax in respect of capital goods - Held that - The assessee had purchased edible oil both from domestic market so also from outside Karnataka State and was paying Tax separately under CST Act, 1956 - The purchase of goods vehicle is a capital goods purchased for the purpose of business - Section 12 provides for deduction of input tax in respect of the capital goods - Hence, assessee is entitled for deduction of input tax in respect of purchase of a Canter fitted with Tanker Decided in favour of Assessee. Input Tax Credit Entitlement for Deduction of input tax - Input tax in respect of other capital goods Lack of Evidence - Held that - AO had disallowed the input tax on the ground that no such claim is made by the appellant by filing Form VAT 100 and the purchases were not supported by relevant records - Hence, the appellant is not entitled for claiming deduction of input tax in respect of the said capital goods - Accordingly, the appellant is entitled for the relief only insofar as the purchase of capital goods i.e. Canter fitted with Tanker and the claim of the appellant in respect of edible oil and other capital goods the appellant is not entitled for any relief - Hence, the first and third questions of law are held against the appellant and the second question of law is held in favour of the appellant - Decided against assessee.

Summary

Issues Involved:
1. Denial of input tax credit for purchases from M/s. Healthy Life Agro Foods.
2. Denial of input tax credit on the purchase of a goods vehicle.
3. Denial of input tax credit on the purchase of other capital goods.

Issue-wise Detailed Analysis:

1. Denial of Input Tax Credit for Purchases from M/s. Healthy Life Agro Foods:
The appellant, a dealer in edible oils, claimed input tax credit for purchases made from M/s. Healthy Life Agro Foods. The Assessing Authority and Revisional Authority denied this credit, stating that M/s. Healthy Life Agro Foods was not a registered dealer, and the TIN provided was invalid. Despite the appellant producing tax invoices and delivery notes, the authorities found that the TIN number 29020450710 was not registered in any local VAT office. The appellant failed to prove the legitimacy of M/s. Healthy Life Agro Foods as a registered dealer, as required under Section 70 of the KVAT Act. Consequently, the court upheld the denial of input tax credit for these purchases, concluding that the appellant did not meet the burden of proof.

2. Denial of Input Tax Credit on the Purchase of a Goods Vehicle:
The appellant purchased a Canter fitted with a tanker for transporting edible oil and claimed input tax credit for this capital good. Under Section 12 of the KVAT Act and the definition provided in Section 2(7), capital goods include goods vehicles used in the course of business. The court found that the appellant used the vehicle for transporting taxable goods, thus qualifying for input tax credit. The court disagreed with the Revisional Authority's denial of this credit, emphasizing that the vehicle was indeed used for business purposes. Therefore, the appellant was entitled to input tax credit for the purchase of the Canter fitted with a tanker.

3. Denial of Input Tax Credit on the Purchase of Other Capital Goods:
The appellant claimed input tax credit for other capital goods without filing the necessary Form No.100 or providing supporting documents. The Assessing Authority disallowed these claims due to the lack of proper documentation. The court upheld this decision, noting that the appellant failed to comply with procedural requirements for claiming input tax credit. The appellant did not provide sufficient evidence to support their claims, and thus, the denial of input tax credit for these capital goods was justified.

Conclusion:
The court allowed the appeal in part. It modified the order of the Revisional Authority, granting input tax credit for the purchase of the Canter fitted with a tanker. However, it upheld the denial of input tax credit for purchases from M/s. Healthy Life Agro Foods and other capital goods due to insufficient evidence and non-compliance with procedural requirements.