2022 (9) TMI 794 - HC - VAT and Sales Tax

Court Orders Refund of Input Tax Credit despite Delay in Filing

The court granted the petitioner, a private limited company engaged in export sales, a mandamus for the refund of Input Tax Credit (ITC) from January 2007 ... Refund the amount of Input Tax Credit (ITC) along with interest - export sales that have been treated as zero rated sales - period from January, 2007 to August, 2007 - HELD THAT:- Form-W has been filed, admittedly, belatedly and beyond the period as provided for under the Rules, being 180 days from the date of exports as per Section 18 of the TNVAT Act, 2006. The application was filed on 12.08.2008 with an insubstantial delay, that in my view, is not fatal to the claim of refund. For this purpose, one need only refer to the oft-quoted decision of this Court in this very assessee, in R.K. KNITS VERSUS ASSISTANT COMMISSIONER (CT) ADYAR II ASSESSMENT CIRCLE, CHENNAI AND OTHERS [2011 (11) TMI 779 - MADRAS HIGH COURT] that has been consistently followed in several other cases. In the interests of consistency, there is a direction to the respondent to decide the representation filed by the petitioner within a period of twelve (12) weeks from today, bearing in mind the decisions of this Court in the cases of R.K.Knits as well as the decisions in Writ Appeals, if available, by then. Petition disposed off. Issues:1. Mandamus sought for refund of Input Tax Credit (ITC) from January 2007 to August 2007.2. Delay in filing Form-W for refund.3. Pending refund application due to a Writ Appeal.4. Comparison with a similar case of Mohib Shoes Private Limited.5. Interpretation of Section 19(11) of TNVAT Act.6. Distinction between claim for utilization of ITC and a refund of accumulated ITC.7. Applicability of timelines under the Act for refund claims.8. Pending appeal of R.K.Knits case before Division Bench.Analysis:1. The petitioner, a private limited company engaged in export sales, sought a mandamus for the refund of Input Tax Credit (ITC) from January 2007 to August 2007 due to nil output tax liability. The belated filing of Form-W for the refund was noted, but the court considered it non-fatal to the claim based on precedents like R.K.Knits case.2. The representation for refund filed by the petitioner was pending due to a Writ Appeal filed by the State challenging the R.K.Knits case. The court, referring to a similar case of Mohib Shoes Private Limited, emphasized that the absence of a stay on the decision of R.K.Knits supported the petitioner's refund claim.3. Section 19(11) of the TNVAT Act, dealing with the timeline for claiming ITC, was analyzed. The court highlighted the mandatory nature of the timeline and the absence of provisions for an extension, citing the ALD Automotive case and the Jayam and Co. case.4. A distinction was drawn between a claim for utilization of ITC against output tax liability and a refund of accumulated ITC. The court emphasized that the strict timelines under the Act for utilization may not be directly applicable to refund claims, especially when the petitioner is entitled to ITC.5. Despite the pendency of the R.K.Knits case in appeal, the court, noting the absence of a stay, upheld the petitioner's claim for refund. The court directed the respondent to decide on the representation within twelve weeks, considering the decisions in R.K.Knits, Mohib Shoes cases, and any relevant Writ Appeals.