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TMI Blog2018 (2) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... it Petition No.58917-928/2016 and connected matters (Kirloskar Electric Company Limited Vs. State of Karnataka and another) decided on 10/01/2018 with regard to the claim of Input Tax Credit under Section 10(3) of the KVAT Act, 2003, wherein it is held as under:- 19. A closer look at the contextual facts of the case and as explained in bracketed portion in the aforesaid quote from the Division Bench decision in Centum Industries Private Limited case in the light of the provisions of Section 10(3) and Section 35(4) of the KVAT Act, 2003, would reveal that the claim of ITC was disallowed by the Division Bench not on the basis of an interpretation of the substantive provisions contained in Section 10(3) of the KVAT Act, 2003, or any restriction of period to be read therein but because of the belated claim made by the assessee much after the lapse of a reasonable period viz., six months from the month of June 2006 in the month of February 2007 and while referring to the belated claim beyond six months, the Division Bench referred to Section 35 of the KVAT Act, 2003, which prescribes 20 days period for filing of the Returns for the month ended and in case of omissions or errors, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before this Court need not be even gone into. However, the learned Additional Advocate General pointed out that these amendments would only now after 01/04/2015 allow the Input Tax Credit to the dealers, if the input tax pertains to a tax period of five months prior to the tax period in which such ITC is claimed, as how an amendment beneficial to the interest of the assessees and realizing their practical difficulties, the State has effected these amendments to facilitate the claim of the ITC after these amendments. However, at the same time, the learned Additional Advocate General s argument is that, by necessary implication therefore for the previous periods, it should be inferred that since there was no such relaxation available to the assessees, therefore unless the ITC invoice pertains to the same tax period, such ITC cannot be allowed. This argument of the learned Additional Advocate General cuts the arguments of the learned AAG himself, when he submits that the amendment was effected to facilitate the claim of ITC by the State realizing the difficulties of the assessees. If the restrictive and narrow interpretation put forth by the learned counsel for the Respondents i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate can retain the tax paid by the selling Dealer to the State as collected under the Sale Invoice which is passed on to the purchasing Dealer who are the assessees - petitioners before this Court, if ITC in respect of such sale invoice was to be disallowed, contrary to the very concept of VAT law and the unrestricted language of Section 10(3) of the KVAT Act, 2003 and in apparent violation of Article 265 of the Constitution of India, there was simply no answer on behalf of the Respondent State to this query of the Court, except relying on the aforesaid obiter from the judgment of the Division Bench of this Court in Centum Industries Private Limited case, which as explained above, does not support the case of the Revenue at all. 24. In the peculiar facts of the Centum Industries Private Limited case, the claim of ITC credit was disallowed on the basis of the belated claim made by it and not while interpreting the substantive provisions of Section 10(3) of the Act in a narrower way, as is sought to be canvassed by the Respondent State before this Court even now. 25. The learned counsels for the Respondent State were again without any answer to the question of the Court as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e credit is, therefore, indefeasible. It should also be noted that there is no co-relation of the raw material and the final product; that is to say, it is not as if credit can be taken only on a final product that is manufactured out of the particular raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day that is becomes available. 29. Thus the claim of credit of input tax is indefeasible as was the case of CENVAT under Excise law and such credit of ITC under VAT law which is equivalent to tax paid in the chain of sales of the same goods, cannot be denied on the anvil of machinery provisions or even provisions relating to time frame which is law of limitation only bars the remedy rather than negativing the substantive claims under the taxing statutes. 30. Both the questions framed above are therefore liable to be answered in favour of the petitioners assessees. The claim of ITC cannot be restricted and denied on the stated grounds by Revenue. It cannot be denied only because ITC claim is not made in respect of Sale Invoices which are not pertaining to same Tax Period, nor it can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd of the judicial and hierarchical discipline which they are bound to observe and it may also amount to a deliberate disobedience on their part and may invite contempt action and therefore to prevent any such further unnecessary litigation on this issue, at the behest of the different Authorities of the Department taking a contrary view, it is directed that the Head of the Respondent Department, namely, the Commissioner of Commercial Taxes shall issue a Circular in terms of the various aforesaid judgments of this Court in favour of assessees, for being followed by the Authorities through out the State to avoid any further multiplicity of litigation before this Court and Appellate Forums. Therefore, such a Circular shall be issued by the Respondent Commissioner of Commercial Taxes and the Respondent - Departmental Authorities, including the Appellate Authorities under the Act are cautioned that now onwards if any contrary view is found to be taken by such Authorities of the Department on aforesaid issue, this Court would initiate suo motu contempt proceedings against the Commissioner of Commercial Taxes as well as the concerned Authorities of the Respondent Department. 35. Wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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