High Court directs AO to grant input tax credit under Section 22(17) after setting aside Revisional Board's order

The HC set aside the revisional Board's order rejecting the input tax credit claim and remanded the matter to the AO. The revisional authority had allowed a net tax credit of Rs. 36,36,100 under section 22(17) of the Act, which the HC directed to be granted to the petitioners. The AO was instructed to pass a revised assessment order within eight weeks, ensuring the petitioners receive the claimed credit without being hindered by technicalities. The petition was allowed by way of remand.

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ISSUES:

Whether input tax credit (ITC) allowable under section 22(17) of the West Bengal Value Added Tax Act, 2003 can be carried forward and adjusted in subsequent years.Whether failure to consider affidavits filed by the petitioner regarding carried forward ITC constitutes an error warranting interference.Whether the revisional authority and tribunal erred in rejecting the claim for refund or adjustment of excess refundable ITC without proper verification or comment on the petitioner's computation.Whether the matter should be remanded to the assessing officer to grant ITC credit and pass a revised assessment order.

RULINGS / HOLDINGS:

The net tax credit allowable under section 22(17) of the Act was held to be Rs. 36,36,100.00/- and the petitioners are entitled to the benefit of this credit; "technicalities should not stand in the way."The affidavits filed by the petitioners stating the carried forward ITC amount were not considered by the authorities, which was an omission requiring rectification.The revisional authority and tribunal failed to comment on or cross-verify the petitioner's computation of excess refundable ITC amounting to Rs. 33,33,349.48/- and thus erred in rejecting the claim without proper consideration.The matter is remanded to the assessing officer with directions to give credit to the sum of Rs. 36,36,100.00/- as allowed by the revisional authority and to pass an appropriate revised assessment order expeditiously.

RATIONALE:

The Court applied the statutory provisions of section 22(17) of the West Bengal Value Added Tax Act, 2003, governing input tax credit and its carry forward.The Court recognized the limitation of time for rectifying returns but emphasized that excess refundable ITC claims supported by affidavits and computations must be duly considered and verified rather than dismissed on technical grounds.The Court noted that neither the revisional authority nor the tribunal engaged with the petitioner's detailed computation or affidavits, indicating a lack of proper adjudication on the merits.The decision to remand was made "considering the peculiar facts and circumstances of the case" and expressly stated "not to be treated as a precedent," reflecting a cautious approach without doctrinal shift.

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