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TMI Blog2015 (8) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... r can adjust current year tax liability out of Input Tax Credit available in credit of dealer – In view of said decision, no substantial questions of law arises – Therefore, Tribunal rightly deleted interest and penalty – Decided against Revenue. - Tax Appeal No. 326 of 2015, Civil Application (OJ) No. 388 of 2015 - - - Dated:- 1-5-2015 - M. R. Shah And S. H. Vora, JJ. For the Appellant : Ms Vacha Desai, AGP For the Respondent : None ORDER ( Per : Honourable Mr. Justice M. R. Shah ) 1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Gujarat Value Added Tax Tribunal, Ahmedabad dated 22.01.2014 passed in Second Appeal No.770 of 2013, the Revenue has preferred the present tax appeal with the following proposed substantial questions of law:- (1) Whether the Hon ble Tribunal erred in adjudicating on merits despite the first appellate authority dismissed only on the ground of pre-deposit? (2) Whether the Hon ble Tribunal erred in deleting levy of interest and penalty? 2. The main grievance voiced by Ms.Vacha Desai, learned A.G.P. appearing on behalf of the appellant-State is that as the appeal before the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014 dated 13/08/2014; 1317/2014 dated 11/12/2014 and 104/2015 dated 19/03/2015 by which, the different Benches have taken the view that when the appeal before the Tribunal is against the order passed by the first Appellate Authority dismissing the appeal on the ground of non-deposit of the amount of pre-deposit, the learned Tribunal need not and/or should not enter into the merits of the case and the learned Tribunal is required to concentrate on the order passed by the learned first Appellate Authority dismissing the appeal on the ground of pre-deposit and/or the amount of pre-deposit only. However, in the facts and circumstances of the case, more particularly, when the main issue involved is now squarely covered by the decision of the Division Bench of this Court in the case of Cosmos International Ltd. (supra), we propose to consider the issue on merits rather than remanding the matter either to the learned Tribunal or the first Appellate Authority as no fruitful purpose would be served in remanding the matter to the learned Tribunal and/or even to the first Appellate Authority as now, the main issue on merits is concluded against the Revenue by the judgment and order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to (4) ... (5) Notwithstanding anything contained in this Act, Tax credit shall be allowed for purchases- (a) ... to (d) ... (dd) made prior to the date of registration. 12. Tax Credit for stock on (31st March, 2006) 12(1) to 12.6) The provisions of section 11 shall apply mutates mutandis to the tax credit to be availed of under this section. 12(7) If the Commissioner is satisfied that a dealer (a) has claimed tax credit for such stock for which he is not entitled for claiming tax credit as per the provisions of section 11 and subsections (3) and (4) of section 12, or (b) has claimed excess tax credit than what he is entitled to under section 11 or under this section the Commissioner may, after giving the dealer an opportunity of being heard direct him to pay a penalty equal to twice the amount of tax credit so claimed. 13. Net amount of Value Added Tax The net amount of Value Added Tax for a tax period payable shall be determined after the adjustment of tax credit in the manner as may be prescribed. GUJARAT VALUE ADDED TAX RULES, 2006 15. Calculation of Tax Credit u/s.11 15(1) ... 15(2) ... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l there is any Input Tax Credit in the credit of the assessee/dealer, such balance Input Tax Credit is required to be carried forward to the next subsequent year and that is the scheme of the VAT Act and the Rules, 2006 more particularly with respect to the Input Tax Credit. Therefore, merely because while submitting the form and raising the claim of Input Tax Credit, the assessee had claimed more / excess Input Tax Credit than admissible, is no ground to deny the assessee/dealer to adjust the admissible Input Tax Credit (which is held to be admissible only after assessment) against its output tax liability under the VAT Act in the current year under consideration. To deny such Input Tax Credit in the current year under consideration would be against the provisions of the VAT Act and the Rules, 2006 more particularly section 11 of the VAT Act read with Rule 18 of the Rules, 2006. It is not in dispute that whatever is claimed by the assessee as Input Tax Credit by submitting the Form No.108 is always subject to the assessment/reassessment and the actual amount of Input Tax Credit is determined only on assessment by the Assessing Officer. Only after assessment / reassessment, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 18 of the Rules, 2006 and is entitled to adjust such Input Tax Credit against its output tax liability under the VAT Act of the current year under consideration. Merely because while submitting the Form No.108 the assessee/dealer submitted the claim of Input Tax Credit more than which is held to be admissible on assessment may be original assessment or even audit assessment or even reassessment, by that itself is no ground to deny the assessee/dealer to adjust the admissible Input Tax Credit against its output tax liability of VAT Act of the current year under consideration. [8.0] In view of the above, we agree that the view taken by the learned Gujarat Value Added Tax Tribunal, Ahmedabad declaring and holding that the assessee/dealer is entitled to adjust the Input Tax Credit against output tax liability of the VAT Act of the current year under consideration and after adjusting the same the liability of interest on the balance amount due is required to be considered. 7. In view of the above decision of this Court, no substantial questions of law arise as proposed by the appellant-State. Under the circumstances, instead of remanding the matter to the learned Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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