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TMI Blog2017 (3) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... t'). 2.The petitioners, before me, are manufacturers, who claim that they have purchased inputs, which are referred to, in the First Schedule to the 2006 Act and, qua them, have paid tax. The contention being that these tax suffered inputs have been used in manufacturing and/or processing of goods in the State, and therefore, they should be allowed full credit of the tax paid on the inputs without being fettered by the proviso to Section 19(2)(v) of the 2006 Act. 3. I may state, at the outset, that the counsels for the assessees and the Revenue are agreed that I should treat W.P.No.7969 of 2014, as the lead petition, and therefore, the facts articulated therein should be referred to, in order to arrive at a conclusion qua, the interpretation, to be given to the proviso to Section 19(2)(v) of the 2006 Act. 3.1.Counsels agree that, once, this Court were to take a view one way or the other on the interpretation of the provision in issue, the decision arrived at, in W.P.No.7969 of 2014 , would apply in principle to all other cases. PREFATORY FACTS: 4.Therefore, before I proceed further, let me, broadly, indicate the facts which have given rise to W.P.No.7969 of 2014. 5.The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought about by G.O.No.139, dated 08.11.2013, issued a pre-assessment notice dated 21.01.2014, to the petitioner, in respect of return filed for the month of December, 2013. 7.1 By way of the said pre-assessment notice, respondent No.2 sought to suggest that there was a short reversal of ITC. Via the said pre-assessment notice, the petitioner was directed to pay, (what, respondent No.2 construed as a wrong availment of ITC), a sum of Rs. 1,30,139/- towards tax along with interest at the rate of 2%. 7.2 The petitioner, in response to the pre-assessment notice, filed a reply dated 30.01.2014. The petitioner, via the reply, brought to fore the fact that the pre-assessment notice was silent as to basis on which, reversal of ITC was sought. 7.3 Notwithstanding the aforesaid stand taken in the reply, the petitioner attempted to explain the effect of the amendment brought about by the Act 28 of 2013. Respondent No.2, however, was not convinced by the contents of the reply, and hence, proceeded to pass the impugned order dated 06.02.2014. 8. I must note here that in the title to the impugned order, the date of the petitioner's reply is noted as 18.10.2014, which, I am told is a typ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Nos.7969, 10585 and 10586 of 2014, the submissions were made by Mr.R.L.Ramani, learned senior counsel; in W.P.No.1388 of 2017, the arguments were put forth by Mr.J.Arokhiaraj; in W.P.No.1880 of 2017, the submissions were made by Mr.N.Murali; in W.P.No.38233 of 2015, the arguments were made by Mr.R.Raghavan; in W.P.No.1268 of 2017, the submissions were advanced by Mr.Adithya Reddy; in W.P.No.1230 of 2017, the submissions were made by Mr.P.Rajkumar; in W.P.No.722 of 2017, the submissions were made by Mr.N.Prasad; in W.P.No.44188 of 2016, the submissions were made by Mr.N.Sriprakash and N.Prasad; in W.P.No.43402 of 2016, the arguments were also put across by Mr.N.Prasad. 13.On the other hand, the respondents were represented by Mr.S.Kanmani Annamalai, learned Additional Government Pleader (Tax). CONTENTIONS 14. The arguments advanced on behalf of the petitioners were pithy and neat. The submission made was that the petitioners were registered dealers, who had purchased taxable inputs specified in the First Schedule to the 2006 Act, which, thereafter, were used in manufacturing and/or processing the final goods. In other words, once inputs, which had suffered tax, were purchased wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impact would be 11.11.2013 to 01.04.2015. 15.1 The alternate argument, thus, was that, the deletion of the proviso to Section 19(2) of the 2006 Act should be given retrospective effect, in the absence of anything said to contrary, as it was curative in nature. In other words, the submission, in effect, is that, if, this Court were come to the conclusion that the proviso to Section 19(2) of the 2006 Act were to apply to all six clauses, i.e., (i) to (vi), then, the deletion of the proviso should be treated, as a recognition of the fact by the legislature that it was never meant to apply to the manufacturers, in the first place. 15.2 In support of their submission, on this count, learned counsel for the petitioners, in particular, Mr.Prasad, relied upon the judgement of the Supreme Court in : Allied Motors (P) Ltd., v. Commissioner of Income Tax, (1997) 224 ITR 677 (SC). 15.3 The petitioners, in particular, once again, via Mr.Prasad, also, sought to place reliance on the dictionary meaning of the word, "which" given in the Shorter Oxford English Dictionary, (III Edition) Volume II Page 2535, in the context of the language of Section 19(2) of the 2006 Act. 15.4 Furthermore, as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries located in the State of Tamil Nadu less competitive, as compared to their counterparts, situate in the neighbouring States. 16.6 In addition to the aforesaid submission, Mr.Annamalai, sought to place reliance, on the judgement of the Division Bench of the Orissa High Court, rendered in the case : Bajrang Steel and Alloys Limited and others v. State of Orissa and others, (2011) 43 VST 235 (Orissa). 16.7 It was the submission of Mr.Annamalai that, the provisions of the VAT Act, as obtaining in the State of Orissa, in particular, the provisions of Section 20, when read with Rule 11(3) of the Rules made thereunder, threw up a state of affairs, which is pari materia, with the provisions of Section 19 of the 2006 Act. 16.8 It was, thus, the submission of Mr.Annamalai that, if, the ratio of the judgement in : Bajrang Steel and Alloys Limited, is applied to the facts of the present case, then, clearly, the proviso to Section 19(2) of the 2006 Act would become applicable to even those persons, who carry on manufacturing and/or processing activities as against trading activities. 17. This apart, Mr.Annamalai, also made one last submission, though rather feebly, which is that, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule, and are purchased within the State from a registered dealer, and thereafter, are used for the purpose set out in clauses (i) to (vi), as delineated in sub-section (2) of Section 19 of the 2006 Act. 20.1 The proviso to sub-section (2) of Section 19 limits the availment of ITC by providing that ITC shall be allowed in excess of 3% of the tax for the purposes specified in clause (v). Clause (v), if read with sub-section (2) of Section 19 would have me conclude that, if, an assessee were to purchase taxable goods specified in the First Schedule, which were sold in the course of Inter-State Trade or Commerce against declarations made in form 'C', an assessee would be allowed ITC only in excess of 3% of the tax paid on such purchases. 20.2 Therefore, there is, to my mind, nothing in the proviso, which will have me come to the conclusion that, it is attracted to any of the other clause referred to in sub-section (2) of Section 19 of the 2006 Act. 20.3 A plain reading of the provisions of sub-section (1) and sub-section (2) of Section 19 of the 2006 Act would show that, as long as specified goods, which suffer tax are used for any of the purposes set out in clauses (i) to ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief reasons : 23.1. First, the Orissa High Court in that matter was dealing with a challenge made to Rule 11(3) of the Orissa Value Added Tax Rules, 2005 (in short OVAT Rules), framed under the Orissa Value Added Tax Act, 2004 (in short OVAT Act). 23.2. It was contended in that case that not only Rule 11(3) ultra vires Section 20 of the OVAT Act, but that it conferred unguided and unfettered powers on the State Government. 23.3. It was, this challenge, which, the Orissa High Court repelled. 23.4. In matters placed before me for adjudication, there is no challenge to the provisions of Section 19(2) of the 2006 Act. All that I have been asked to rule upon, is, as to whether the proviso to Section 19(2) of the 2006 Act would apply to the purpose set out in clause (ii) of Sub-section (2) of Section 19 of the 2006 Act. 23.5. Therefore, in my view, the said judgement is distinguishable and would not apply to the facts obtaining in the instant petitions. 24. Which brings me to the last submission advanced by Mr.Annamalai, that is, the petitioners, should be relegated to the available alternate statutory remedies. 25. According to me, in the instant case, this argument is not sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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