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Issues: Whether, for the purposes of Rule 53(6)(b) of the Maharashtra Value Added Tax Rules, 2005, separate schemes floated under a single trust deed of a mutual fund can be treated as separate trusts so that only the receipts of the gold ETF scheme are to be considered, and whether the denial of input tax credit/set-off on gold purchases not resold within six months was justified.
Analysis: The mutual fund was created under a single trust deed that permitted the trustee company to float one or more schemes, but the deed did not create separate trusts for each scheme. On the facts, the petitioner carried on transactions in gold under the gold ETF scheme, and the authorities found that its gross receipts from sale were less than fifty per cent of total receipts. Once that statutory contingency was attracted, Rule 53(6)(b) restricted set-off to purchases where the corresponding goods were sold or resold within six months of purchase. The Court rejected the reliance on trust-law principles and on the decision concerning separate funds under a different tax regime, holding that those authorities did not govern a case under the MVAT framework. The concurrent view that the receipts of all schemes could be taken into account and that the petitioner had not shown error in the denial of full input tax credit was not found to be perverse or illegal.
Conclusion: The challenge to the disallowance of input tax credit and the consequential demand was rejected; the Revenue's view under Rule 53(6)(b) was upheld.
Ratio Decidendi: Where a single trust deed merely authorises multiple schemes, those schemes are not separate trusts for Rule 53(6)(b) purposes, and once receipts on account of sale are below the statutory threshold, set-off is confined to purchases whose corresponding goods are sold or resold within six months.
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