2024 (7) TMI 993 - HC - VAT and Sales Tax

Disallowance of belated claim of Input Tax Credit - disallowance on the ground that, such belated claims for the Input Tax Credit could not be entertained - applicability of Section 10 (3) of the KVAT Act - State Appellate Tribunal allowed the claim - HELD THAT - In the present case, taking note of the law laid down by the Division Bench in the BHARAT EARTH MOVERS LIMITED VERSUS THE STATE OF KARNATAKA REPRESENTED BY THE COMMISSIONER OF COMMERCIAL TAXES BANGALORE 2023 (1) TMI 341 - KARNATAKA HIGH COURT clearly holding that the right to claim Input Tax Credit is a indefeasible right and no time limit is prescribed under Section 10 (3) of the KVAT Act for availing Input Tax Credit, no exception could be taken for entertaining belated claims. There are no question of law arising that requires admission of the revision petition - revision disposed off.

Summary

Issues:
1. Correctness of orders passed by the Karnataka Appellate Tribunal in STA No. 74/2018 and STA No. 75/2018.
2. Belated claim of Input Tax Credit disallowed by the revenue.
3. Interpretation of Section 10 (3) of the Karnataka Value Added Tax Act, 2003 regarding the time limit for availing Input Tax Credit.

Analysis:
The petitioner challenged the orders passed by the Karnataka Appellate Tribunal allowing appeals and remanding the matter back to the assessing authority for fresh orders on the Net Input Tax Credit declared by the appellant. The issue revolved around belated claims of Input Tax Credit disallowed by the revenue. The petitioner argued that the absence of a time limit under Section 10 (3) of the KVAT Act made the right to claim Input Tax Credit indefeasible, emphasizing that procedural requirements should not impede substantive rights.

The respondent's counsel cited precedents, including the case of M/s. Bharat Earth Movers Limited Vs. The State of Karnataka, to support the position that there is no time limit prescribed under Section 10 (3) of the KVAT Act for availing Input Tax Credit. The Division Bench's decision in STRP No. 234/2016 clarified that Input Tax Credit is an indefeasible right, and no time limit restricts its availment. The court referred to the case law and held that the right to claim Input Tax Credit is not subject to time limitations, aligning with the principles established in previous judgments.

The court analyzed the questions framed by the learned Single Judge in the case of Kirloskar Electric Co., Ltd., Vs. State of Karnataka, and the subsequent decisions and appeals. The Division Bench's ruling in STRP No. 234/2016 confirmed that there is no time limit prescribed under Section 10 (3) of the KVAT Act for claiming Input Tax Credit. The court reiterated that the right to avail Input Tax Credit is indefeasible and cannot be denied based on procedural aspects. Consequently, the revision petition was disposed of summarily, upholding the legal position established in previous judgments.

In conclusion, the judgment reaffirmed that the right to claim Input Tax Credit is not bound by time limitations under Section 10 (3) of the KVAT Act, emphasizing the indefeasible nature of this right. The court's decision aligned with previous rulings and clarified that belated claims for Input Tax Credit should not be denied based on procedural considerations, as the substantive right remains unaffected by procedural requirements.