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TMI Blog2020 (2) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... g or processing of goods in the state, a registered dealer would be entitled to avail credit on the tax paid by the seller - it is evident that input tax credit could be denied only Section 19(5)(a),(b) (c) of the TNVAT Act, 2006 on inputs. The restrictions in Section 19(5)(a) of the TNVAT Act, 2006, will apply only to such inputs which are bought and sold as such and not to inputs used in the manufacture of goods. 19(5)(b) is not relevant for the present case. Under Section 19(5)(c) of the TNVAT Act, 2006, no input tax credit can be allowed on the purchase of goods sold as such or used in the manufacture of other goods and sold in the course of inter-State trade or commerce falling under sub-Section (2) of Section 8 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order - Petition allowed in part. - W.P.Nos.37654, 37655, 39635 & 39636 of 2016 And W.M.P.Nos.32277, 32278, 33910 & 33911 of 2016 - - - Dated:- 18-2-2020 - Mr. Justice C. Saravanan For the Petitioner : M/s.R.Charulatha for M/s. Lakshmi Kumaran Sridharan in all W.Ps. For the Respondents : Mr.R.Swarnavel, Government Advocate in all W.Ps. COMMON ORDER By this common order, all the four writ petitions are being disposed. 2.The petitioner has challenged following notices issued to it:- W.P.No. Date Assessment Year/ Period Amounts proposed to be improved notice (Rs.) W.P.No.37654/2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales to units located in the Special Economic Zones though located outside the State of Tamil Nadu are nevertheless liable to be treated as zero rated sales within the meaning of Section 18 of the TNVAT Act, 2006 and therefore the input tax credit availed by the petitioner on inputs used in the manufacture of ICE which were eventually supplied to such units cannot be denied. 7. It is further submitted that sale to units located in Special Economic Zone were not exempted sale within the meaning of Section 15 of the TNVAT Act, 2006. It is the contention of the petitioner that the respondents cannot invoke the definition of zero rating in Section 18(1)(ii) of the TNVAT Act, 2006 to deny input tax credit. 8. It is submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above, it is clear that if goods are used for manufacturing or processing of goods in the state, a registered dealer would be entitled to avail credit on the tax paid by the seller. 12. Section 19(5) of the TNVAT Act, 2006 however contains certain restrictions in this regard. The restrictions in the said sub- Section read as under:- Section 19 - Input tax credit:- (5) (a) No input tax credit shall be allowed in respect of sale of goods exempted under Section 15 (b) No input tax credit shall be allowed on tax paid or payable in other States or Union Territories on goods brought into this State from outside the State. (c) No input tax credit shall be allowed on the purchase of goods sold as such or used in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for use as packing or packing accessories in an unit located in any Special Economic Zones, or for development, operation and maintenance of Special Economic Zones, or for development, operation and maintenance of Special Economic Zone by the developer of the special economic zone, if such registered dealer has been authorised to establish that unit or to develop, operate and maintain such Special Economic Zone by the authorities specified by the Central Government in this behalf. 18. If the sale in question does not fall under Section 8(2) of the CST Act, 1956, but under Section 8(6) of the CST Act, 1956, the credit cannot be denied. 19. The sale of Internal Combustion Engine by the petitioner to units located in Special Economic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been expressly incorporated in Section 19(5)(c) of the TNVAT Act, 2006. 24. Therefore, if Section 19(5) of the TNVAT Act, 2006 is applied plainly to the facts of the case, it is evident, credit cannot be denied on inputs merely because inputs were used in the manufacture of goods and such manufactured goods were sold to a buyer without payment of tax under Section 8(6) of the CST Act, 1956. Unless, there is a specific restriction imposed under the Act, credit cannot be denied. 25. In this connection reference may be made to the decision of the Court in Cape Brandy Syndicate vs. Inland Revenue Commissioners , (1921) 1 KB 64. The court held that in a taxing stated one has to merely look at what is clearly said. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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