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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 ..... . Date Assessment Year/ Period Amounts proposed to be improved notice (Rs.) W.P.No.37654/2016 .09.2016 2013-14 24,35,550/- W.P.No.37655/2016 .09.2016 2014-15 1,16,86,733/- W.P.No.39635/2016 13.10.2016 2016-17/ July 16 8,51,098/- W.P.No.39636/2016 13.10.2016 2016/17 Aug. 16 12,54,916/- 3. These notices call upon the petitioner to provisionally reverse input tax credit on the inputs utilised in the manufacture of internal combustion engine liable to tax at the rate prescribed under Entry 44 of the 1st Schedule to Part C of the TNVAT Act, 2006 and cleared to Special Economic Zone located outside the State of Tamil Nadu. 4. The petitioner had effected sale to units located in Special Economic Zones outside th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form 1 Declaration under Section 8(6) of the Central Sales Tax Act, 1956 read with Rule 12(11) of the Central Sales Tax Rules, 1957 and therefore the petitioner cannot be denied of the proportionate input tax credit. 9. I have heard the learned counsel for the petitioner and the learned Government Advocate for the respondents. 10. The grant of input tax credit is governed by Section 19(1) of the TNVAT Act, 2006 for the purpose specified in sub-Section (2). The circumstances specified in sub-Section (2) to Section 19 of the Act is reproduced below:- Section 19 - Input tax credit (2) Input tax credit shall be allowed for the purchase of goods made within the State from a registered dealer and which are for the purpose of - (i) re-sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be denied only Section 19(5)(a),(b) & (c) of the TNVAT Act, 2006 on inputs. 14. 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. 15. 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 Sales Tax Act, 1956. 16. Thus, the sale effected under an exemption in terms of Section 8(6) is not covered by the exception in 19(5)(c ) of the TN VAT Act, 2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f "Government" in Section 15 can only mean the "State Government" has defined Section 2(22) of the said Act. 21. Further, the restrictions that are contemplated in Section 19(5)(a)of the TNVAT Act, 2006, are quay inputs re traded as such and not on inputs which are used in the manufacture of finished goods while under Section 19(5)(c), restriction is only for sale which fall under Section 8(2) of the Central Sales Tax Act,1956. 22. Further sub-clause 4 to Section 19 contains a restriction on inputs tax credit, allowed on the tax paid in the State on the purchase of goods, in excess of 5% of tax relating to such purchases, subject to the conditions as may be prescribed for transfer to a place outside the State otherwise than by way of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hawan (P) Ltd. vs. Excise Commr., (1971) 1 SCC 4]. 27. As there is no provision for denying credit under the circumstances, I am of the view that the demand proposed in the impugned notices may not be correct. 28. In the light of the above discussion, I am inclined to partly allow this writ petitions by relegating the petitioner to file a reply to the impugned notices within a period of thirty days from date of receipt of a copy of this order. 29. The respondent shall thereafter consider the submissions of the petitioner and pass appropriate orders in the light of the observations contained herein and in accordance with law. 30. These Writ Petitions stand partly allowed with the above observations. No cost. Consequently, connected Misce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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