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of <h1>High Court Confirms Input Tax Credit Validity for Capital Goods in Fabric Bleaching Under TNVAT Act, 2006.</h1> <h3>The State of Tamil Nadu Represented by the Joint Commissioner (CT) Salem (Now Erode Division). Versus Tvl. Point Textiles (P) Ltd.</h3> The HC upheld the Tribunal's decision, affirming the deletion of the reversal of input tax credit under Section 2(11) of the TNVAT Act, 2006. The ... Deletion of reversal of input tax credit - failure to take into account the relevant facts - taking into account the factors that are wholly irrelevant in deciding whether reversal is warranted in terms of Section 2(11) of the TNVAT Act 2006 - process engaged by the dealer comes within the purview of Section 2(11) of the TNVAT Act, 2006 or not - HELD THAT:- There are no reason to interfere with the impugned order passed by the Sales Tax Appellate Tribunal as it is a well considered order. There is no dispute that the respondent is engaged in bleaching of fabric and therefore is liable to pay tax under the provisions of the TNVAT Act, 2006. Consequently, input tax credit on the capital goods used for such process cannot be denied. This Tax Case Revision is dismissed - the substantial questions of law raised in this revision are answered in favour of the assessee and against the Revenue. Issues:1. Whether the Tribunal's order deleting the reversal of input tax credit is valid under Section 2(11) of the TNVAT Act 2006Rs.2. Whether the Tribunal erred in affirming the findings of the 1st appellate authority regarding the dealer's process under Section 2(11) of the TNVAT Act, 2006Rs.Analysis:1. The Tax Case Revision challenged the Tribunal's order regarding the reversal of input tax credit. The Tribunal considered the assessing authority's points, which included the dealer not objecting before inspecting officers, lack of material evidence, and absence of manufacturing activity. The first appellate authority analyzed Section 2(27) and 2(11) of the Act, emphasizing the word 'processing' under Section 2(11). The authority referred to a Madras High Court decision on the definition of manufacture and capital goods. The Tribunal found the assessing authority's reasons insufficient and accepted the first appellate authority's findings, ruling in favor of the dealer.2. The High Court, comprising Mr. Justice R. Suresh Kumar and Mr. Justice C. Saravanan, heard arguments from the Special Government Pleader for the petitioner and the respondent's counsel. The Court upheld the Tribunal's order, stating it was well-considered. It noted the respondent's bleaching of fabric activity, making them liable for tax under the TNVAT Act, 2006. Consequently, the Court affirmed that input tax credit on capital goods used for such processes cannot be denied. The Court dismissed the Tax Case Revision, ruling in favor of the assessee and against the Revenue, with no costs awarded.
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