Input tax credit requires strict statutory compliance, and suppressed purchases do not by themselves create eligibility.

Input tax credit under the Kerala Value Added Tax Act is a statutory concession, not an automatic entitlement, and it depends on strict compliance with return filing, proper accounts, prescribed invoices, and clear proof of tax sufferance. Where purchases and turnover are suppressed from the books and returns, the statutory conditions for claiming credit are not satisfied. The fact that the supplier was registered or government-owned did not by itself establish eligibility. On that basis, denial of input tax credit on the suppressed purchases was held to be correct.

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Issues: Entitlement to input tax credit on suppressed purchases and turnover under the Kerala Value Added Tax Act.

Analysis: Input tax credit under the value added tax scheme is a statutory concession and not an automatic right. Its availment is conditioned by the statutory requirements governing return filing, maintenance of accounts, proof of tax sufferance through prescribed invoices, and determinability of the eligible credit from the books of accounts. Where purchases and turnover are suppressed from the accounts and returns, the essential requirements for claiming the benefit are not satisfied. The fact that the purchases were made from a registered or government-owned supplier does not by itself confer entitlement to input tax credit. The strict compliance principle applies to such concessional provisions, and substantial compliance cannot be invoked where the statutory conditions going to the essence of the claim are not met.

Conclusion: The revision petitioner was not entitled to input tax credit on the suppressed purchases, and the denial of such credit was correct.

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