Input tax credit cannot be denied where delayed registration and e-filing access prevented statutory return compliance.

Input tax credit could not be denied where delayed registration and delayed password activation for electronic filing prevented compliance with the statutory return-filing scheme under the Tamil Nadu VAT Act, 2006 and Rules, 2007. The court noted that the earlier remand required a fresh finding on whether registration was issued in time and whether the dealer was obstructed from filing online or manual returns, but the impugned order did not address those directions meaningfully. On the peculiar facts, departmental delay was the primary obstacle to compliance, so the delay in manual filing could not defeat the credit claim. The denial of input tax credit was therefore unsustainable and the impugned order was set aside.

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Issues: Whether the denial of input tax credit and the direction to reverse credit for the assessment year 2013-14 were sustainable when registration and password activation for electronic filing were delayed and the petitioner was prevented from filing returns in the manner contemplated by the statutory scheme.

Analysis: The petitioner's entitlement to input tax credit had to be examined in the light of the statutory requirements governing registration and return filing under the Tamil Nadu Value Added Tax Act, 2006 and the Tamil Nadu Value Added Tax Rules, 2007. The earlier remand required a fresh finding on whether registration was issued in time and whether the petitioner was prevented from filing online or manual returns. The impugned order did not meaningfully address those directions. The delay in issuing the password for electronic filing, coupled with the delay in registration, caused prejudice to the petitioner and obstructed compliance with the online return mechanism. In the peculiar facts, even the delay in filing manual returns could not be used to defeat the claim, since the departmental delay was the primary obstacle to compliance.

Conclusion: The denial of input tax credit was unsustainable and the impugned order was liable to be set aside. The issue was decided in favour of the petitioner.

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