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TMI Blog2020 (2) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... credit availed on capital goods in excess of 4% vide the impugned order? 3.The petitioner had purchased "capital goods" as defined in Section 2(11) of the TNVAT Act, 2006 for manufacturing purpose and availed input tax credit in terms of Section 19(3) of the said Act. As per Entry 25, Part B to the I schedule of the said Act, the "capital goods" are liable to VAT at 4%. However, the dealer who sold the "capital goods" to the petitioner charged VAT at 12.5% and passed on the incidence of such tax to the petitioner. The petitioner therefore availed the tax paid and reflected in the invoice at 12.5%. 4.It is the contention of the respondent that since the "capital goods" were liable to VAT only at 4%, the petitioner was liable to reverse in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the respondent therefore prays for dismissal of the present writ petition by directing the petitioner to approach the Appellate Deputy Commissioner. 8.I have considered the submission of the learned counsel for the petitioner and the respondent. The purpose of allowing input tax credit on capital goods and inputs are to reduce the cascading effect of the tax on the products / goods sold by a dealer under the provisions of the said Act. Under Section 19 (3) of the Act every registered dealer, is allowed into tax credit in the manner prescribed on the purchase of capital goods for use in the manufacture of taxable goods. The only restriction that is contained under the provision of Sub Section (6) of the Act. Section 19 Input Tax Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, shall lapse to Government. Provided that a registered dealer who makes purchase of parts and accessories for capital goods already purchased and use in manufacture of taxable goods is entitled to input tax credit relating to such goods in the month of purchase or thereafter. 10.It is noticed that under the scheme of the Act, input tax credit can be availed on the strength of the invoice on the tax paid by the registered dealer who sells such capital goods or input. As a person availing input tax credit, the petitioner had to merely satisfy that the tax reflected in the invoice was paid by the registered dealer who sold the capital goods to it. 11.Even if the registered dealer had deliberately paid tax in excess and passed on the inci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order reads as under:- 5.Given the, fact that the choice of an adjustment of the input tax credit is given to the assessee, the question of a suo motu, adjustment by the Revenue, hence, does not arise, more so, when an assessee seeks a refund of the ITC as provided for under sub-section (2). It is admitted that the petitioner had in fact paid the tax at 12.5 per cent which could not be refuted by the seller. If there had been a charging of tax by the seller when effected the sale to the purchaser at the rate over and above what is payable under the Act, all that the Revenue could do is to proceed against the seller of the goods for charging the purchaser at a rate not legally sustainable. Equally so, unlike in the earlier provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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