Input tax credit under Bihar VAT cannot be used to offset Central sales tax absent express statutory permission.

Input tax credit under the Bihar Value Added Tax Act, 2005 is confined to tax paid or payable under that Act and accrues only within the statutory conditions and restrictions in section 16. The Act and Rules do not provide any mechanism for using that credit to discharge Central sales tax liability, and the prescribed return form also contains no such adjustment facility. Accordingly, Central sales tax payable on inter-State sales cannot be set off against input tax credit under the Bihar Value Added Tax Act, 2005 or the Bihar Value Added Tax Rules, 2005.

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Issues: Whether the Central sales tax payable on inter-State sales can be adjusted against input tax credit under section 16 of the Bihar Value Added Tax Act, 2005.

Analysis: The expression "input tax" under the Bihar Value Added Tax Act is confined to tax paid or payable under that Act. The scheme of section 16 shows that input tax credit accrues only in the circumstances specified therein and subject to the conditions and restrictions prescribed. The provision governing credit does not create any entitlement to use that credit for discharging Central sales tax liability. The prescribed return form and the relevant rules also contain no mechanism permitting such adjustment. The Act and the Rules, therefore, distinguish between accrual of input tax credit and the liabilities that may be discharged from it.

Conclusion: The claim for adjustment of Central sales tax against input tax credit is not permissible under the Bihar Value Added Tax Act, 2005 and the Bihar Value Added Tax Rules, 2005.

Ratio Decidendi: Input tax credit under the Bihar Value Added Tax Act can be claimed only within the statutory scheme of that Act and cannot be used to offset a Central sales tax liability unless the statute or rules expressly so provide.

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