Court grants full tax credit, quashes notice under TNVAT Act, 2006, favoring petitioner. Precedent extended.

The court quashed the pre-revision notice challenging the reversal of input tax credit under the TNVAT Act, 2006, in favor of the petitioner. Relying on the precedent set in a previous case, the court allowed full credit of tax paid on inputs used in manufacturing, without being restricted by the relevant provisions of the TNVAT Act. The judgment extended the benefit granted in the previous case to the petitioner, resulting in the dismissal of costs and closure of the related miscellaneous petition.

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Issues:
Challenge to reversal of input tax credit under TNVAT Act, 2006 based on pre-revision notice issued to dealer for interstate sales discrepancy.

Analysis:
The petitioner, a dealer under TNVAT Act, 2006, challenged a pre-revision notice issued by the revenue department regarding the reversal of input tax credit due to alleged discrepancy in interstate sales declaration. The notice was issued based on the petitioner's submission of "C" declaration form for a lower value than the actual sales amount. The petitioner sought a writ of certiorari to quash the notice, citing provisions of Section 19(2)(v) of TNVAT Act, 2006 and Rule 10(9)(a) of TNVAT Rules, 2007.

The petitioner's counsel referred to a previous judgment in M/s. Everest Industries Limited case, where a similar issue was addressed. The counsel argued that the principles applied in the Everest case should also be extended to the present case, emphasizing that manufacturers claiming input tax credit should be allowed full credit without being restricted by Section 19(2)(v) of TNVAT Act, 2006.

The government counsel contended that the applicability of the Everest Industries Limited case judgment to the present case should be verified, and if the judgment is upheld on appeal, it should also apply to the petitioner. The court noted that the Everest case judgment allowed full credit of tax paid on inputs used in manufacturing, without being constrained by Section 19(2)(v) of TNVAT Act, 2006.

Based on the precedent set in the Everest Industries Limited case and the similar nature of the issue at hand, the court quashed the impugned pre-revision notice and allowed the writ petition. The court ruled in favor of the petitioner, extending the benefit granted in the Everest case to the present petitioner. The judgment concluded with the dismissal of costs and closure of the connected miscellaneous petition.

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