Mandatory time limit for input tax credit under VAT law upheld, with delayed invoices defeating the credit claim.

Section 19(11) of the Tamil Nadu Value Added Tax Act, 2006 requires input tax credit to be claimed within the same month or, if not, before the end of the financial year or within ninety days, whichever is later. The Court treated this time limit as mandatory and held that input tax credit is a statutory concession available only in the manner prescribed by the Act. Because invoices for a substantial part of the supplies were furnished after the contractual and statutory period, the defendant could not claim the credit in time. The Court also accepted the contractual deduction for delayed supply and upheld the denial of VAT credit and the resulting part-decree.

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Issues: Whether the defendant was justified in denying input tax credit and making deductions on account of belated submission of invoices, thereby sustaining only the part-decree passed by the courts below.

Analysis: The dispute turned on the effect of Section 19(11) of the Tamil Nadu Value Added Tax Act, 2006, which prescribes that input tax credit shall be claimed within the same month or, if not so claimed, before the end of the financial year or within ninety days, whichever is later. The invoices for a substantial part of the supplies were found to have been furnished after the contractual and statutory timeframe, with the result that the defendant could not avail input tax credit within the prescribed period. The Court accepted that the statutory time limit is mandatory, that the benefit of input tax credit is a concession available only in the manner contemplated by the statute, and that the delayed supply of invoices prejudiced the defendant's ability to claim the credit. The Court also accepted the contractual deduction for delayed supply in the facts of the case.

Conclusion: The denial of VAT credit and the consequent part-decree were upheld, and the appellant was not entitled to interference on the ground urged.

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