2015 (4) TMI 999 - HC - VAT and Sales Tax

Denial of input tax credit - Demand of differential tax - Held that - Tax Board, after appreciation of evidence and factual finding, has come to the conclusion that the assessee sold goods to the ultimate consumers on discounted amount and it was none of the business of the Revenue to interfere in the affairs of the assessee. Even if the assessee sells goods at a loss at least revenue should not have grudge or concern. It is also not debarred under the sales tax law and/or VAT law to sell the goods below the invoice value. Once a whole seller has issued an invoice , then Input Tax Credit is allowable as per VAT invoice alone and the same requires to be allowed to the assessee. - sales tax law does not debar if the assessee chooses to sell the goods keeping in view the prospective discount or rebate which may be received by the assessee and in passing the same to the consumer on account of the business expediency or otherwise. - Tax Board has basically come to a finding based on the appreciation of evidence on record and I do not find any infirmity or perversity in the order impugned so as to call for interference of this Court - Decided against Revenue.

Summary

Issues:
1. Dismissal of appeal by Tax Board regarding Input Tax Credit claim for Assessment Year 2008-09.

Analysis:
The High Court heard a petition by the Revenue challenging the Rajasthan Tax Board's order dismissing an appeal related to the Assessment Year 2008-09. The respondent, a dealer of electronic items, had claimed Input Tax Credit based on discounts received from manufacturers/purchasers. The Assessing Officer was not satisfied with the claim, leading to a differential tax levy. The Deputy Commissioner (Appeals) allowed the appeal, stating that the Input Tax Credit was rightly claimed. The Revenue then appealed to the Tax Board, which upheld the decision of the DC(A). The Revenue contended that the Input Tax Credit was wrongly claimed as goods were sold at a lower price than the invoice value, while the respondent argued that it was within their rights to manage affairs accordingly.

The Court considered the arguments presented by both parties and reviewed the impugned order. It noted that the Tax Board had concluded that the respondent sold goods to consumers at discounted prices, indicating that Revenue should not interfere in the business decisions of the assessee. The Court emphasized that selling goods below invoice value was not prohibited by sales tax or VAT laws, and Input Tax Credit should be allowed based on the VAT invoice alone. Referring to a previous case, the Court highlighted that the law does not restrict an assessee from selling goods considering prospective discounts or rebates. The Court found no issues with the Tax Board's decision, as it was based on evidence and did not warrant interference. Consequently, the revision petition was dismissed for lack of merit, with no costs imposed.