Input Tax Credit depends on a prescribed invoice, and relief under a circular did not extend automatically to BSNL purchases.

Purchases were treated as having been made from BSNL because MSTC acted only as BSNL's agent, BSNL confirmed the sale, the delivery order required BSNL invoices, and MSTC received commission only. Input Tax Credit was linked to compliance with the statutory requirement of a prescribed tax invoice, so it could not be claimed outside the KVAT framework on equitable grounds. The circular relied on applied to Government departments, local authorities and autonomous bodies, not to BSNL as a company incorporated under the Companies Act, 1956. Any extension of that relief to purchases from a Government company was left to administrative policy and clarification by the competent authority.

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Issues: (i) Whether the petitioner's purchases were in substance from BSNL and not from MSTC. (ii) Whether the petitioner could claim Input Tax Credit without a prescribed tax invoice, and whether the Government circular extending relief for certain government bodies could be applied to purchases from BSNL.

Issue (i): Whether the petitioner's purchases were in substance from BSNL and not from MSTC.

Analysis: Though the return and some replies suggested purchases from MSTC, MSTC stated that it acted only as agent of BSNL and did not effect the sale. BSNL also confirmed that the scrap was sold by it. The delivery order indicated that invoices were to be issued by BSNL, and the certificates showed that MSTC received only commission.

Conclusion: The purchases were held to be from BSNL and not from MSTC.

Issue (ii): Whether the petitioner could claim Input Tax Credit without a prescribed tax invoice, and whether the Government circular extending relief for certain government bodies could be applied to purchases from BSNL.

Analysis: Input Tax Credit under the KVAT scheme was linked to compliance with the statutory requirement of a tax invoice in the prescribed form. The circular relied on applied to Government departments, local authorities and autonomous bodies, but BSNL was a company incorporated under the Companies Act, 1956 and did not fall within that description. The question whether similar relief should be extended to purchases from a Government company was treated as a matter of policy for the Government to decide. The Court therefore left room for the petitioner to seek clarification from the Commissioner and for the assessing authority to act on any favourable clarification.

Conclusion: The petitioner was not granted final relief on the Input Tax Credit claim, and the matter was left to administrative clarification and consequential consideration.

Final Conclusion: The writ petitions were disposed of by directing the petitioner to seek clarification from the Commissioner, with recovery kept in abeyance for a limited period and further action left to the outcome of that clarification.

Ratio Decidendi: A tax concession tied to a prescribed invoice cannot be claimed outside the statutory framework merely on equitable grounds, and extension of a circular to an additional class of entities is a matter for the competent Government authority unless the circular itself covers them.

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