Input tax credit on purchase returns is unavailable when goods are returned beyond the prescribed 90-day period.

Input tax credit on purchase returns under the Kerala Value Added Tax regime is confined to returns made within the prescribed 90-day period. The statutory scheme links credit and refund adjustments to the corresponding output tax position, so where goods are returned within time, the selling dealer may claim the related deduction and refund mechanism. If the return is made after 90 days, that statutory benefit does not arise and the purchaser cannot claim input tax credit on the returned goods. The revisional challenge disclosed no legal error warranting interference, and the adverse finding was sustained.

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Issues: Whether input tax credit can be claimed on purchase returns made beyond the prescribed 90-day period under the Kerala Value Added Tax Act and Rules.

Analysis: The applicable statutory scheme ties input tax credit to output tax liability. Where goods are returned, no output tax remains relatable to that transaction. The regime allows adjustment and refund only when the return is made within the prescribed period, and the selling dealer then gets the corresponding deduction and refund mechanism. If the return is beyond 90 days, the statutory benefit does not arise, and the purchaser cannot claim input tax credit on the returned goods. The challenge also disclosed no legal error warranting interference under the revisional power invoked.

Conclusion: The claim for input tax credit on goods returned after 90 days is not allowable and the finding against the assessee is sustained.

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