Input tax credit cannot be denied merely for a later claim or a different tax period under VAT law.

Input tax credit under Section 10(3) of the Karnataka Value Added Tax Act, 2003 is treated as a substantive entitlement within the VAT chain, while Section 35 return-filing requirements operate as machinery provisions and do not themselves create a restriction on credit. Credit cannot be denied merely because the purchase invoice relates to a different tax period or because the claim was made later. Denial is impermissible unless the invoices are shown to be bogus, duplicate, fictitious, or otherwise invalid, and that approach was reinforced by Article 265 of the Constitution.

---

---

Issues: Whether input tax credit under Section 10(3) of the Karnataka Value Added Tax Act, 2003 can be denied on the ground that the purchase invoice does not pertain to the same tax period in which the credit is claimed, or on the ground of belated claim contrary to the return-filing machinery under Section 35 of the Act.

Analysis: The claim for input tax credit was held to flow from the substantive charging scheme under Section 10(3) of the Karnataka Value Added Tax Act, 2003. The return-filing provisions under Section 35 were treated as machinery provisions and not as a source of restriction on the substantive entitlement to credit. The Court held that the earlier observations relied upon by the Revenue did not lay down a general rule that credit could be denied merely because the invoice related to another tax period or because the claim was not made immediately. The credit was treated as part of the VAT chain, and denial of valid credit without showing that the invoices were bogus, duplicate, fictitious, or otherwise invalid was found impermissible, particularly in light of Article 265 of the Constitution of India.

Conclusion: The restriction of input tax credit to the same tax period and its denial merely because the claim was made later were rejected. The petitioners succeeded on the covered issue, and the impugned assessment orders to that extent were quashed with directions for fresh consideration in accordance with law.

---