Retrospective VAT amendment allowed input tax credit in pending assessments, subject to invoice verification.

A retrospective amendment introducing Section 25C of the Kerala Value Added Tax Act, 2003 was treated as a special provision effective from 1 April 2005 and to pending assessments. It operated notwithstanding Sections 11(4) and 12(2), so dealers denied presumptive tax benefits for breach of Section 6(5) conditions could still claim input tax credit or special rebate where the assessment proceedings fell within the amendment's scope. For the relevant assessment year, the assessee was held entitled to the credit, with the assessment to be modified accordingly, subject to verification of the invoices produced.

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Issues: Whether the assessee was entitled to input tax credit by virtue of the retrospective amendment introducing Section 25C of the Kerala Value Added Tax Act, 2003, notwithstanding the denial of presumptive tax benefits for violation of the conditions under Section 6(5) of that Act.

Analysis: The amendment was treated as a special retrospective provision applicable from 1.4.2005. It was held to operate notwithstanding Sections 11(4) and 12(2) of the Kerala Value Added Tax Act, 2003, and to grant input tax credit or special rebate where assessment proceedings were initiated denying eligibility to pay presumptive tax for breach of the conditions in Section 6(5). Since the relevant assessment year was 2008-09, the assessee fell within the scope of the amended provision. The direction to grant credit was, however, made subject to verification of the invoices produced by the assessee.

Conclusion: The assessee was entitled to input tax credit under the retrospective amendment, and the assessment had to be modified accordingly, subject to verification of invoices.

Ratio Decidendi: A retrospective amendment granting input tax credit to dealers assessed under presumptive tax provisions applies to pending assessments from its stated effective date and overrides the denial of credit arising from breach of specified conditions, subject to factual verification.

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