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TMI Blog2020 (2) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... ct - These two taxes are available as an input tax credit under Section 19 and Section 12(2) of the Act respectively. As per section 12(2) of the Act, such dealer is also entitled to input tax credit (ITC) on the tax paid on the goods specified in the 1st schedule. In other words, purchase tax payable under section 12(1) of the Act is available as an input tax credit. This provision is also exception to Section 19 of the Act. Input tax credit that is made available under Section 12(2) and under Section 19 of the Act can be adjusted under Section 3(3) of the said Act. As per Section 3(3) of the Act, tax payable under Section 3(2) by a registered dealer is to be reduced in the manner prescribed to the extent of tax paid on the purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re purchased. Such purchase tax liability is only based on the conditions specified under clauses (a) (b) (c) and (d) of Section 12 (1) of TNVAT Act. On being covered under any one of such clauses of Section 12 (1), the dealer effecting purchase of goods from aforesaid sources shall pay purchase tax at the specific rates. The dealer who pay tax under subsection (1) of section 12 shall be entitled to input tax credit (read section 12 (2)) and adjust the same towards output tax liability. Hence, it is clear that payment of purchase tax must precede claim of input tax credit. 2.In the case of petitioner dealer, the purchases of worn out jewellery from their customers and use of the same for making of new jewellery attracts the liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable to discharge purchase tax liability under Section 12 (1) of the TNVAT Act, 2006 in cash. By the impugned order, the 1st respondent has directed the petitioner to pay the taxes for the relevant assessment years in question in terms of the assessment orders. 6. Learned counsel for the petitioner relies on a decision of this court rendered in Bhima Jewellery vs. The Commercial Tax Officer in W.P.Nos.9853, 8061 to 8067 of 2010 and W.P.Nos.13683 to 13687 of 2015 on 22.07.2019. There, the learned Single Judge has referred to an approval given by the Commissioner of Commercial Taxes, Chennai in a proceedings dated 29.11.2007 which has been extracted in paragraph 13 of the order which reads as under:- 13. I am of the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (321) ELT 448 which in turn placed reliance on the decision of the Honourable Supreme Court in Eicher Motors Ltd Vs. Union of India, 1999 (81) ECR 7 (SC). He also relies on the decision of this Court in Commissioner of Central Excise Vs. SPIC Ltd , 2014 (305) ELT 484. 9.Learned Additional Government Pleader (Tax) submits that the impugned clarification is well reasoned and requires no interference. He submits that purchase tax has to be discharged in cash and only thereafter it is available by way of input tax credit under Section 12(2) of the T.N. VAT Act, 2006. 10.I have considered the arguments of the learned counsel for the petitioner and the learned Additional Government Pleader (Tax) for the respondents. Value Added T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax payable under Section 12(1) of the Act has to be paid in cash. Such purchase tax can be adjusted on the output tax in terms of section 3(3) of the Act. 14. The purpose of allowing ITC is to reduce the cascading effect of the taxes borne on the inputs and to allow seamlessly ITC at each stage of sale and purchase. 15. If the intention of the legislature was to allow utilization of Input Tax Credit for discharging the tax liability under Section 12(1) of the Tamil Nadu Value Added Tax, 2006, the legislature would have expressly provided for the same. 16. Section 12(2) of the Act is merely a trade facilitation to reduce the cascading effect of the tax. It does not contemplate discharge of purchase tax under Section 12(1) Tami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om and out of Input Tax Credit (ITC), I am unable to agree with the views expressed in Bhima Jewellery Vs The Commercial Tax Officer s case referred to supra. The said decision is based on a concession given by an officer of the Commercial Tax Department. Such confessions are not binding on the Court. Even clarification of authorities are not binding on the Court as per the decision of the Hon'ble Supreme Court in CCE Vs. Ratan melting and Wire Industries, Calcutta, 2005 (3) SCC 57. 20.In the light of the above discussion, the impugned order passed by the 1st respondent is sustainable. Accordingly, the above writ petition is liable to be dismissed and it is hereby dismissed. No cost. Consequently, connected Miscellaneous ..... X X X X Extracts X X X X X X X X Extracts X X X X
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