TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 401
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....s. However, in the light of the decision of this Court in the case of INTERFIT TECHNO PRODUCTS Vs. PRINCIPAL SECY. reported in (2015) 81 VST 389 (Mad), all those issues stood answered by the said decision and this position is clearly admitted by the learned counsel for the petitioner. Thus, the only issue which survives for consideration in all these Writ Petitions pertain to preference of Set-off. 4. The following facts would be sufficient for disposal of the Writ Petitions. 4.1 . The petitioner in W.P.Nos.24402 to 24407 of 2014 is engaged in the manufacture of Industrial Valves and the petitioner in W.P.Nos.24488 to 24491 of 2014 is engaged in the manufacture of Iron and Steel Castings and the Writ Petitions in W.P.Nos.24402 to 24407 of 2014 pertain to the Assessment years 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13 and the Writ Petitions in W.P.Nos.24488 to 24491 of 2014 pertain to the Assessment years 2008-09, 2010-11, 2011-12 and 2012-13. 4.2 The petitioner has export sales, during the year and the same has been categorized as "Zero Rated Sale" under Section 18 read with Section 2(44) of Tamil Nadu Value Added Tax Act, 2006 (in short "TNVAT Act"). The peti....
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....or Set-off in order to deny the carry forward of ITC which is detriment to the interest of the petitioner. By referring to the decision of the Hon'ble Division Bench of this Court in the case of M/s.Jayam and Co., reported in 65 VST 260, it is submitted that the essence of VAT is in providing set-off for the tax paid earlier and this is given effect through the concept of Input Tax Credit. Input Tax Credit is given only to ameliorate the cascading effect of tax burden and by virtue of Section 3(3), the tax payable by the registered dealer shall be reduced in the manner prescribed, the extent of tax paid on his purchase of goods specified in Part-B or Part-C, inside the State to the registered dealer, who sold the goods to him. Thus, Input Tax Credit is creature of statue. It is submitted that by applying the above legal principle enunciated by the Hon'ble Division Bench of this Court, preference of set-off as done by the respondent will increase the tax burden and that is not intention of the legislation and the preference of Set- off as done by the respondent would defeat the object of VAT legislation. 6. The learned counsel appearing for the petitioner in order to demons....
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....15, which is in the form of a draft counter affidavit with regard to the contention raised by the petitioner on the preference of Set-off has contended as follows:- "J. The method of Set-off of ITC adopted by the respondent is scientific and flawless. K. If the preference of Set-off is first given to the export sales, it will take an indefinite period for the complete adjustment of ITC since the petitioner has not been claiming refund. The adjustment of ITC will never be made within the period of one hundred and eighty days enshrined in Section 18(3). Such a situation would not have been envisaged while the provisions were enacted. L. Section 18(3) stipulates that the ITC has to be either fully adjusted or refund claimed within a period of one hundred and eighty days from the date of accrual of such input tax credit / making zero-rate sales. There is no provision made that any set-off must be only for the zero-rate sales. M. Merely because Section 18 of the TNVAT Act, 2006 does not prescribe the method of preference of Set-off of ITC, the petitioner cannot claim that the benefits should be given to them." 9. After elaborately hearing the learned counsel for the parties and....
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....of the benefit of the balance tax deferment in its entirety which they would otherwise not be in a position to utilize as the period of availment of tax deferment expired by March, 2007. The assessing authority cannot insist on the assessee adopting a particular method which would deny them the benefit of utilization of the balance available tax deferment in its entirety, and instead pay tax. The impugned order of assessment, to the extent the assessing authority adjusted the input tax credit first against the manufacturing activity of the petitioner and the balance against their trading activity, is neither a method authorized by law nor can such a method be forced on the assessee as it is to their detriment. The assessment order must, to this limited extent, be set-aside." 10. On a reading of the above judgment, it shows that the Court considered the issue and found that when there is no specific Rule providing the manner in which the petitioner had to be assessed to tax, which is not open to the Assessing Authority to contend that the particular mode should be adopted or that the procedure adopted by the assessee is not rational and that the Assessing Authority cannot insist on....
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....n by the learned counsel for the petitioner in the case of Binani Industries Limited Vs. Assistant Commissioner of Commercial Taxes VI Circle, Bangalore and Others [2007] 6 VST 783 (SC) with regard to reopening of the assessment does not render assistance to the case of the petitioners. Accordingly Question No.6 is answered against the petitioners. 62. In the result, (1) the challenge to the impugned circular is held to be unnecessary since the circular is a non statutory circular and is in the nature of guideline and the prayer for quashing the circular is rejected. (2) Section 18 of the TNVAT Act is not an independent or a separate stand alone provision under the provisions of TNVAT Act but subject to other provisions of the Act including Section 19 of the VAT Act. (3) For the reasons assigned, it is not sufficient for a dealer claiming refund under Section 18(2) of the Act to show that he has paid input tax on the goods purchased; that those goods are used in the manufacture and nothing more but there is duty upon the dealer to satisfy the Assessing Authority that the claim is not hit by any of the restrictions or conditions contained under Section 19 of the VAT Act. I....