Reversal of input tax credit under Section 19 TVAT Act must follow the earlier interpretation; refund rejection set aside.

The earlier interpretation of Section 19 of the Tamil Nadu Value Added Tax Act, 2006 was held to govern the refund claim, because the proviso to Section 19(2) was applied only to clause (v) and not to the other clauses in sub-section (2). Denial of relief merely because the petitioner was not a party to the earlier decision was found erroneous, as the ratio of that ruling was applicable to the present matter. The refund rejection was set aside, and the matter was remanded for fresh consideration on merits in light of the earlier ruling.

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Issues: Whether the rejection of the refund claim on the ground that the petitioner was not a party to the earlier decision was sustainable and whether the matter should be reconsidered in the light of the earlier ruling on reversal of input tax credit under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The earlier decision on the interpretation of Section 19 of the Tamil Nadu Value Added Tax Act, 2006 had already held that the proviso to Section 19(2) applied only to clause (v) and not to the other clauses in sub-section (2). The Court held that the ratio of that decision governed the present claim as well, and the respondent's view that the petitioner could be denied relief merely because it was not a party to that case was erroneous. The impugned rejection was therefore unsustainable.

Conclusion: The refund rejection was set aside and the matter was remanded to the respondent for fresh consideration on merits in the light of the earlier decision.

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