Strict compliance for Input Tax Credit and revisional jurisdiction upheld under West Bengal VAT law

The Special Commissioner was held competent to exercise suo motu revisional power under the West Bengal VAT law because the statutory definition and the Government notification authorised the Special Commissioner to act in the Commissioner's place; the jurisdictional challenge therefore failed. Input Tax Credit was also denied because it is a statutory concession available only on strict compliance with Rule 19(8), which required payment to the selling dealer by the prescribed modes; payment to a third party on the dealer's behalf did not satisfy that condition. The writ petition was rejected and the tribunal's decision was left undisturbed.

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Issues: (i) Whether the Special Commissioner had jurisdiction to exercise suo motu revision under the West Bengal VAT law; and (ii) whether Input Tax Credit could be denied where payment was made to a third party instead of the selling dealer.

Issue (i): Whether the Special Commissioner had jurisdiction to exercise suo motu revision under the West Bengal VAT law.

Analysis: The revisional power under section 85 vested in the Commissioner was held to extend to the Special Commissioner by reason of the statutory definition and the Government notification appointing the Special Commissioner to exercise the Commissioner's powers. The challenge based on Rule 142 was found to be academic in the setting of an appeal already pursued before the appellate authority, and the revisional action by the superior authority was treated as within jurisdiction.

Conclusion: The jurisdictional challenge failed and the exercise of suo motu revision was upheld.

Issue (ii): Whether Input Tax Credit could be denied where payment was made to a third party instead of the selling dealer.

Analysis: Input Tax Credit was treated as a statutory concession available only upon fulfilment of the prescribed conditions. Rule 19(8) required payment to the selling dealer by the specified modes, and payment to a third party on the dealer's behalf did not satisfy that requirement. The entitlement could not be enlarged by reading words into the provision.

Conclusion: The denial of Input Tax Credit was upheld and the challenge on this ground failed.

Final Conclusion: The writ petition was rejected in full, and the tribunal's decision was left undisturbed.

Ratio Decidendi: A fiscal concession such as Input Tax Credit is available only on strict fulfilment of the statutory conditions, and the revisional power vested in the Commissioner may be exercised by the Special Commissioner where the statute and notification so provide.

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