2016 (12) TMI 510

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....1956, is engaged in the manufacture of castings and valves out of the raw materials purchased from local registered dealers. The petitioner is stated to be selling the castings and valves within the State besides direct export under Section 5(1) of the Central Act. In these writ petitions, the petitioner has challenged the partial rejection of the petitioner's applications for refund of the input tax credit for the period from July 2015 to June 2016 and the prayer sought for in these writ petitions is restricted only to that portion of the impugned orders, in and by which, the respondent rejected the refund claim. 3. It may not be necessary for this Court to refer to the findings rendered by the Assessing Officer in respect of the refu....

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....ersal of input tax credit claim on wastage under Section 19(9) of the State Act, under which, there are two subsidiary issues namely invisible loss and visible loss, the respondent adopted a percentage of 5% and 1% respectively. The correctness of adopting uniform percentage came up before this Court in the case of Interfit Techno Products Ltd. Vs. The Principal Secretary and Commissioner of CT [reported in (2015) 81 VST 389] wherein this Court issued certain directions as to how the Assessing Officer should proceed to determine the invisible loss/visible loss and the operative portion of the directions issued is as follows : "...... (3) For the reasons assigned, it is not sufficient for a dealer claiming refund under Section 18(2) of t....

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....ers clearly setting out under what circumstances they propose to revise or call upon the petitioner to reverse refund sanctioned and after inviting objections proceed in accordance with law." 8. Thus, to ascertain as to whether there are quantum of loss of goods, which were purchased, on which, tax was paid, the Assessing Officer has to conduct an exercise, by which, he has to ascertain as to what would be the loss and uniform or ad hoc percentage cannot be adopted. To do so, it would be necessary for the Assessing Officer to conduct an inspection of the place of business of the petitioner to acquaint himself with the manufacturing process. However, since the respondent has adopted a uniform percentage, the same calls for interference. 9.....

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....ection 18(2) of the TNVAT Act and pointed that Section 18(2) of the TNVAT Act is emphatic in its wording, the dealer referred to therein to claim a refund is one who had paid the tax on purchase of those goods that are exported and such consumed goods used in the manufacture of other goods, which are exported and are specified under Sub-Section (1) and in the said case, the petitioner was held to be entitled to the total refund. Thus, the respondent should consider the petitioner's case based on the stand taken by them that the raw materials purchased by them are used in the manufacture of other goods that are exported as specified in Sub-Section (1) of Section 18. This aspect having not been considered, the matter requires reconsiderat....