Input tax credit cannot be denied for belated returns where the VAT statute imposes no time limit.

Input tax credit under the Karnataka Value Added Tax Act, 2003 cannot be denied merely because returns were filed belatedly, as Section 10(3) prescribes no time limit for availing that credit. Following the earlier view on the same issue, the High Court held that belated filing did not justify denial of credit, and the reassessment orders and demand notices based on that premise could not stand. The impugned appellate orders were therefore set aside, and the consequential tax demands were quashed.

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Issues: Whether input tax credit could be denied on the ground that the returns were filed belatedly under the Karnataka Value Added Tax Act, 2003, and whether the reassessment orders and demand notices founded on that premise were liable to be quashed.

Analysis: The controlling legal position was taken from the earlier decision on the same issue, where it was held that input tax credit is an indefeasible right and that Section 10(3) of the Karnataka Value Added Tax Act, 2003 does not prescribe any time limit or restriction for availing such credit. On that basis, credit cannot be denied merely because the returns were filed belatedly. Since the impugned appellate orders had proceeded on the contrary view, the consequential reassessment orders and demand notices also could not survive.

Conclusion: The issue was answered in favour of the assessee. The impugned orders, reassessment orders, and demand notices were quashed.

Final Conclusion: The petitions were allowed, and all further proceedings based on the impugned tax demands were brought to an end.

Ratio Decidendi: Input tax credit under Section 10(3) of the Karnataka Value Added Tax Act, 2003 cannot be denied solely because the returns were filed belatedly, as the statute prescribes no time limit for availing that credit.

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