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TMI Blog2024 (6) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. In the facts of the present case, it is undisputed that the Iron ore valued at Rs. 85,08,160/- is not used in the course of business. Hence, the authorities have rightly held that proportionate input tax credit is to be repayable by the petitioner. The Co-ordinate Bench of this Court in the case of State of Karnataka vs. Deccan Mining Syndicate Private Limited, Race Course Road, Bangalore [ 2021 (3) TMI 525 - KARNATAKA HIGH COURT ] was dealing a different factual situation. The dealer therein was transporting Iron ore by rail to the ports for onward exports. On stock verification, the authorities found that there was shortage of few metric tons of Iron ore. The prescribed authority issued proposition notice, treating the difference as suppressed taxable turnover on the basis of the report of Central Bureau of Investigation (CBI). This Court held that merely because there is a shortage of stock, the difference cannot be held to be suppression that too on the basis of the report of the CBI. There is a possibility of transit / handling loss. The other judgments of the Madras High Court deals with Section 19 (9) of the TNVAT Act wherein the goods were used in the course of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht in not following the judgment rendered under the Central Excise Act? viii) Whether on the facts and circumstances of the case, the Tribunal was right in dissolving the ITC at 0.65% on wastage / loss due to spillage, handling, ground loss etc.? ix) Whether on the facts and circumstances of the case, the Tribunal was right in partly allowing the appeal? 3. This Court, by order dated 04.12.2017, has admitted the petition to consider the following question of law; Whether, on the facts and circumstances of the case, the Tribunal was right in not allowing ITC on normal loss/material loss due to spillage, ground loss, and during transportation? 4. The brief facts are, the petitioner is a private limited company engaged in the business of buying, handling, processing and sale of Iron ore in the name and style of M/s. Fomento (Karnataka) Mining Company Private Limited, now known as Fomento Resources Pvt. Ltd., 5. The Deputy Commissioner of Commercial Taxes (Audit)-2, Hubli, [ DCCT (Audit) for short] passed reassessment order under Section 39 (1) of the KVAT Act, 2003, by restricting input tax credit at Rs. 3,40,326/- towards loss of Iron-ore valued at Rs. 85,08,160/-, by orders dated 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2015) 81 VST 389 (Mad). iii) Steel Authority of India Ltd V/s Collector of Central Excise Appeal (Civil) 3406-11 of 1990. iv) M/s. Rupa Company Limited, Tirupur V/s. The Customs, Excise Service Tax Appellate Tribunal, Chennai-6 another - Civil Miscellaneous Appeal No. 2350 of 2006 M.P. No.1 of 2006. v) M/s. ARS Steels Alloy International Pvt. Ltd., V/s. The State Tax Officer, Group-I, Chennai W.P. No. 2885 of 2021 and allied matters. vi) M/s. Saradhambika Paper and Board Mills Private Limited V/s. The State Tax Officer, Gobichetty palayam another W.P. No. 590 of 2021 and allied matters. vii) M/s. R.K. Ganapathy Chettiar V/s. The Assistant Commissioner (ST), Kangeyam - W.P. No. 14166 of 2021 and allied matters. viii) M/s. Global Calcium Private Limited V/s. The Assistant Commissioner (Commercial Tax) Hosur (North) Writ Petition No. 17420 to 17423 of 2015. ix) M/s. Aisan Fabrix Private Limited V/s. The Principle Secretary/Commissioner of Commercial Taxes, Ezhilagam, Chennai W.P. (MD) NO. 5212 of 2014 and allied matters. x) Eastman Exports Global Clothing Pvt. Ltd., V/s. The Assistant Commissioner (CT) Tirupur- W. A No. 1094 of 2020 and allied matters. 10. Per contra, learned Additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the fiscal statute, the provision has to be read on its plain text without reading in or reading out words. In the absence of Section 19 (1) of the KVAT Act providing any exceptions depending on situations or circumstances or nature of business from repayment of input tax, the contention of the petitioner that goods were lost due to spillage, transportation, while grading and separation and moisture loss and the same would not fall within the scope of lost or destroyed as is referred to Section 19 (1) of the KVAT Act and not liable to repay the input credit in terms of Section 19 (1) of the KVAT Act, is not acceptable. 14. As per the submissions of the petitioner as well as the books of accounts as reflected in the balance sheet, as pointed out by the DCCT (Audit) in the re-assessment order, it is clear that loss of Iron ore valued at Rs. 85,08,160/- is due to transportation, handling, processing, ground loss and proportionate input tax credit at Rs. 3,40,326/- is reflected, thus clear that the iron ore is not used in the course of business to that extent. 15. In the facts of the present case, it is undisputed that the Iron ore valued at Rs. 85,08,160/- is not used in the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds made within the State from a registered dealer and which are for the purpose of- (i) re-sale by him within the State; or (ii) use as input in manufacturing or processing of goods in the State: or (iii) use as containers, labels and other materials for packing of goods in the State: or (iv) use as capital goods in the manufacture of taxable goods. (v) Sale in the course of inter-State trade or commerce falling under sub-section (1) and (2) of section 8 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) (vi) Agency transactions by the principal within the State in the manner as may be prescribed. (9) No input tax credit shall be available to a registered dealer for tax paid [or Payable] at the time of purchase of goods, if such- (i) goods are not sold because of any theft, loss or destruction, for any reason, including natural calamity. If a dealer has already availed input tax credit against purchase of such goods, there shall be reversal of tax credit; Or (ii) inputs destroyed in fire accident or lost while in storage even before use in the manufacture of final products; or (iii) inputs damaged in transit or destroyed at some intermediary stage of manufacture. 19. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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