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Issues: Whether the reversal of input tax credit under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006 could be sustained in view of the binding interpretation that the amendment to that provision was curative and declaratory.
Analysis: The impugned assessment order reversed the petitioner's claim for input tax credit under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006 without following the Division Bench view that the 2015 amendment to Section 19(2) was curative and declaratory in nature. On that basis, the amendment related back and restored the position that the right to input tax credit became absolute once the inputs were used in manufacture or processing within the State, and later inter-State or intra-State sale of the manufactured goods did not dilute that entitlement.
Conclusion: The denial of input tax credit could not stand and the assessment order was liable to be set aside.
Final Conclusion: The writ petition succeeded and the impugned assessment was annulled, with the petitioner's entitlement to input tax credit recognised.
Ratio Decidendi: A curative and declaratory amendment to a tax provision operates retrospectively and must be applied so as to preserve the substantive input tax credit entitlement that had accrued under the earlier legal position.
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