Input tax credit before registration cannot be claimed beyond statutory retrospective registration limits under the VAT scheme.

Input tax credit for purchases made before registration was unavailable because retrospective registration under the Kerala Value Added Tax scheme was confined to the specific categories expressly covered by the statute, and could not be extended to a regular dealer or to an importer outside that framework. The Court also held that an appellate authority under a taxing statute must apply the statute as written; equitable principles cannot be used to grant relief where the statute does not permit it. The Tribunal's contrary view was set aside to that extent, and the assessment order was restored.

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Issues: (i) Whether a dealer who applied for registration during the year could claim input tax credit for purchases made prior to registration and for the period before registration, particularly where the dealer was an importer; (ii) Whether equitable principles could be imported into a statutory appeal under the Kerala Value Added Tax regime.

Issue (i): Whether a dealer who applied for registration during the year could claim input tax credit for purchases made prior to registration and for the period before registration, particularly where the dealer was an importer.

Analysis: The claim for input tax credit was examined against the scheme of registration under Section 6 of the Kerala Value Added Tax Act. The dealer had sought registration after the commencement of business and claimed credit for purchases made before registration. The Court noted that the retrospective registration contemplated by the second proviso to Section 16(2) is confined to specific categories, namely presumptive dealers under Section 6(5) and dealers opting for the compounded scheme under Section 8. Those special benefits could not be extended to a regular assessment. The Court also linked the issue to the dealer's status as an importer, holding that the turnover limit relied on by the Tribunal was not applicable in that context.

Conclusion: The dealer was not entitled to claim input tax credit for the period prior to registration, and the Tribunal's contrary finding was set aside.

Issue (ii): Whether equitable principles could be imported into a statutory appeal under the Kerala Value Added Tax regime.

Analysis: The Court held that an appellate authority functioning under a taxing statute must decide the matter within the confines of the statute. Equity cannot be introduced to create relief where the statutory scheme does not provide it, particularly in proceedings before a creature of statute.

Conclusion: Equitable principles could not be imported into the statutory appeal, and the Tribunal erred in relying on them.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside to the relevant extent, and the assessment order was restored.

Ratio Decidendi: Benefits of retrospective registration and related input tax credit can be granted only where the statute specifically permits them, and equitable considerations cannot override the express limits of a taxing statute.

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