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TMI Blog2017 (8) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... edit or Input Tax Credit could not be allowed to the extent of sale of VAT exempted goods namely; wheat bran (Chaff/Chokar) which had been assessed by the Assessing Authority to the extent of 25% of the Input Tax Credit and reverse tax had been imposed on the respondent-assessee. Counsel for the petitioner also accepts that the finding of this Court in the case of Durgeshwari Foods Limited is squarely applicable on the facts of the instant case. Once this is an admitted fact that the judgment is squarely applicable even the Tax Board irrespective of directing the Commissioner in my view, could have directed that in the light of the judgment in the case of Durgeshwari Foods Limited, the claim was not required to be allowed and for the purposes of calculating as to how much input tax credit is to be allowed/disallowed, the matter could have been restored back to the Assessing Officer. The powers of the Tax Board are wide enough. On perusal of section 83 quoted herein before and sub-section (10) of section 83 states that the Tax Board after opportunity of being heard shall pass such order “as it thinks fit” which in my view, gives power to the Tax Board even to direct the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the input tax credit can be claimed on sale of taxable goods only and not on exempted goods and accordingly being not satisfied with the claim of the assessee, a show cause notice was given by the Assessing Officer as to why input tax credit be not disallowed. A detailed reply was filed on behalf of the assessee, however, the Assessing Officer being not satisfied, allowed only input tax credit at ₹ 18,84,959/- and was disallowed to the extent of ₹ 20,50,517/-. 4. The assessee assailed the said order by filing an appeal before the Dy. Commissioner (A), who however was satisfied with the explanation offered by the assessee and directed the Assessing Officer to allow the same taking into consideration the value of the goods. 5. The revenue being not satisfied with the said finding preferred an appeal before the Tax Board, who however, taking into consideration held that the order of the Dy. Commissioner (A) was not proper and not well reasoned in the light of the judgment rendered by this Court in the case of CTO (A-E), Sriganganagar Vs. M/s. Durgeshwari Food Ltd. 2012 Vol.32 Tax-Update 03 and decided the issue in favour of the revenue and against the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that judgment of this Court in M/s. Durgeshwari Food Ltd. (supra) is applicable on facts of the instant case. 7. Per-contra, ld. counsel for the respondent vehemently contended that the claim could not have been allowed contrary to the provisions of law and the claim of the assessee was not in accordance with law, therefore, the Assessing Officer disallowed input tax credit u/Sec.18 of the Act. Counsel further contended that even the judgment rendered by this Court in the case of M/s. Durgeshwari Food Ltd. (supra) is squarely applicable on the facts and circumstance of the instant case and this court has clearly held that the input tax credit could not be allowed to the extent of sale of VAT exempted goods and the judgment of this Court is binding on all the authorities and the Tax Board simply directed the Commissioner which was well justified u/Sec.85 of the Act and no wrong was done in simply directing the Commissioner to allow/disallow input tax credit in the light of the judgment rendered by this Court in the case of M/s. Durgeshwari Food Ltd. (supra). Ld. counsel further contended that wrong can always be corrected and even this court can direct that input tax credit ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the territory of India; or [(g) being used in the State as capital goods in manufacture of goods other then exempted good,] however, if the goods purchased are used partly for the purposes specified in this sub-section and partly as otherwise, input tax credit shall be allowed proportionate to the extent they are used for the purposes specified in this sub-section. [(2) The input tax credit under sub-section (1) shall be allowed only after verification of the deposit of tax payable by the selling dealer in the manner as may be notified by the Commissioner.] (3) Notwithstanding anything contained in this Act, no input tax credit shall be allowed on the purchases- (i) from a registered dealer who is liable to pay tax under sub-section (2) of section 3 or who has opted to pay tax under section 5 of this Act; or (ii) of goods made in the course of import from outside the State; or [(iia) of goods taxable at first point in the series of sales, from a registered dealer who pays tax at the first point; Explanation: For the purpose of this clause, first point in the series of sale means the first sale made by a registered dealer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to in sub-section (1) has been preferred by the appellant, notwithstanding that he may not have appealed against such order, within one hundred and twenty days in the case of an officer of the Commercial Taxes Department and within sixty days in the case of a dealer, of receipt of the notice, file a memorandum of cross-objections verified in the prescribed manner, against any part of the said referred order and such memorandum shall be disposed of by the Tax Board as if it were an appeal within the time specified in sub-section (2) or (3). (5) The Tax Board may admit an appeal or permit the filing of memorandum of cross-objections after the expiry of the limitation provided in sub-sections (2), (3) and (4), if it is satisfied that there was sufficient cause for not presenting the same within that limitation. (6) An appeal to the Tax Board shall be made in the prescribed form and shall be verified in the prescribed manner. (7) The Tax Board, during the pendency of an appeal before it, shall not stay any proceeding but it may, on an application in writing from the dealer, stay the recovery of the disputed amount of tax or any other sum or any part thereof on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the dealer a reasonable opportunity of being heard, pass such order or issue such direction as he deems proper under the circumstances of the case. (2) No order or direction under sub-section (1) shall be passed or issued by the Commissioner if a period of five years has already elapsed from the date on which the order sought to be revised was passed. 10. It would also be appropriate to quote the relevant para Nos.20 21 of the judgment rendered by this Court in the case of M/s. Durgeshwari Food Ltd. (supra) which reads as under:- 20. In the considered opinion of this Court, therefore, in view of specific provisions contained in Section 18 of the VAT Act of 2003, the ratio of the judgments relied upon by the learned counsel for the respondent-assessee would in fact support the case of the Revenue, and as a necessary corollary, it deserves to be held following these aforesaid judgments, that input tax credit in the present case, was rightly reduced and was allowed only proportionately to the extent of manufacturing and sale of taxable goods by the assessee in the present case, namely, Aata , Maida and Suji , manufactured out of raw material (Wheat) and such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Board are wide enough. On perusal of section 83 quoted herein before and sub-section (10) of section 83 states that the Tax Board after opportunity of being heard shall pass such order as it thinks fit which in my view, gives power to the Tax Board even to direct the Commissioner u/Sec. 85 to revise an order. In my view, even the inherent power is available with the Tax Board to pass an appropriate order as it thinks fit which would mean even directing the Commissioner u/Sec.85 to pass an appropriate order. Admittedly, the Commissioner is an Authority subordinate to the Tax Board and the Tax Board can certainly give directions to correct a wrong undone in the matter. 15. Even u/sec.85, the Commissioner may suo-moto or otherwise , would mean that the Commissioner can on his own or on receiving certain information from any source that is even Tax Board can take recourse of invoking provisions of section 85 and certainly, the Commissioner is duty bound to grant opportunity of being heard to the aggrieved person i.e. to the dealer/assessee and shall pass such order or issue such directions as it deems fit, just proper under the circumstances of the case. 16. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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