Writ interference declined on disputed input tax credit claim for capital goods, leaving statutory authority to decide under the tax scheme.

The scope of the proviso to Section 3(5) of the Tamil Nadu Value Added Tax Act, 2006 was examined against the separate statutory definitions of "goods" and "capital goods" in Sections 2(21) and 2(11), together with the petitioner's reliance on Section 19(3). Because the question whether the proviso referring to "goods" extends to capital goods raised a disputed issue of statutory interpretation and application, the High Court declined to interfere under Article 226. The writ court left the claim for input tax credit on capital goods to be considered by the competent tax authority, which was directed to decide the matter in accordance with law after granting the petitioner an opportunity of hearing.

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Issues: Whether the writ court should interfere with the notice proposing denial of input tax credit on capital goods, or leave the claim to be considered by the statutory authority under the Act.

Analysis: The dispute turned on the scope of the proviso to Section 3(5) of the Tamil Nadu Value Added Tax Act, 2006, in the light of the distinct definitions of "goods" and "capital goods" in Sections 2(21) and 2(11) of the Act and the petitioner's reliance on Section 19(3). The Court noted that the question whether the proviso, which refers to "goods", extends to capital goods raised a disputed issue requiring examination by the tax authority. In those circumstances, the Court declined to exercise writ jurisdiction under Article 226 and directed the authority to consider the claim and pass orders in accordance with law after affording opportunity to the petitioner.

Conclusion: The writ court did not decide the merits of the entitlement to input tax credit on capital goods and left the matter to the statutory authority for fresh consideration.

Ratio Decidendi: Where the entitlement to tax credit depends on construction of the statutory scheme and disputed factual or legal questions remain open, the High Court may decline writ interference and require the assessee to pursue determination before the competent authority.

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