Purposive construction of transitional input tax credit filing rules prevents denial of claims as time-barred when forms were notified later.

Transitional input tax credit on stock held on repeal of the earlier sales tax law could not be denied merely as time-barred where the prescribed form and rules were notified only after the appointed day. The Court applied a purposive construction to the filing requirement, holding that the transitional mechanism must remain workable and cannot demand performance of an impossible act. This approach was tied to the legislative object of avoiding double taxation on goods already taxed under the repealed regime. The authorities' restrictive limitation view was unsustainable, the appeals were allowed, and the impugned orders were set aside.

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Issues: Whether the claim for input tax credit on transitional stock could be rejected as time-barred when the prescribed form and rules were notified after the appointed day.

Analysis: The appeals concerned transitional claims under the Punjab Value Added Tax regime for stock held on the repeal of the earlier sales tax law. The governing provisions allowed input tax credit subject to filing of a stock statement within the prescribed period. The Court followed the earlier Division Bench view that the limitation period for such transitional claims could not be read in a manner that required performance of an impossible act. Since the rules were notified later, the period for filing had to be construed purposively so as to make the transitional mechanism workable and consistent with the legislative object of avoiding double taxation on goods that had already suffered tax under the repealed enactment.

Conclusion: The claim could not be rejected merely as time-barred on the basis applied by the authorities. The appeals were allowed and the impugned orders were set aside.

Final Conclusion: Transitional input tax credit claims had to be examined afresh in accordance with law, and the restrictive limitation view taken by the authorities was unsustainable.

Ratio Decidendi: A transitional tax claim under a newly enacted VAT regime must be construed purposively so that the filing requirement is applied in a workable manner and does not compel an impossible act.

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