TaxTMI 
TaxTMI 
2018 (10) TMI 814
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....Agrawala, AOR Ms. Rashmi Nandakumar, AOR For Respondent(s) Mr. Vinodh Kanna B., AOR Ms. Valarmathi, Adv. Mr. B. Balaji, AOR Mr. K. V. Vijayakumar, AOR Civil Appeal Nos. 10414­10450 of 2018 @ SLP(C) NOS.36590­36626 OF 2013, Civil Appeal Nos. 10451­10455 of 2018 @ SLP(C)NOS.2474­2478 OF 2014, Civil Appeal Nos. 10498­10499 of 2018 @ SLP(C)NOS.10060­10061 OF 2014, Civil Appeal Nos. 10456­10481 of 2018 @ SLP(C) Nos. 3675­3700 of 2014, Civil Appeal Nos.10482­10497 of 2018 @ SLP(C) NOS.3702­3717 OF 2014, Civil Appeal Nos. 10509­10513 of 2018 @ SLP(C)NOS.11313­11317 OF 2014, Civil Appeal Nos. 10503­10507 of 2018 @ SLP(C)NOS.11319­11323 OF 2014, Civil Appeal No. 10523 of 2018 @ SLP(C)NO.13961 OF 2014, Civil Appeal Nos. 10525­10527 of 2018 @ SLP(C)NOS. 13204­13206 OF 2014, Civil Appeal No. 10544 of 2018 @ SLP(C)NO.30638 OF 2014, Civil Appeal No. 10522 of 2018 @ SLP(C)NO.13960 OF 2014, Civil Appeal No. 10524 of 2018 @ SLP(C)NO. 12779 OF 2014, Civil Appeal Nos. 10519­10521 of 2018 @ SLP(C)NOS.12175­12177 OF 2014, Civil Appeal Nos. 10500­10502 of 2018 @ SLP(C)NOS.10506­10508 OF 2014, Civil Appeal No. 10508 ....
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....ivery. The tax invoices of such purchases are received after a considerable delay as the original documents are sent to the Regional Transport Authority for registration of motor vehicles. The appellant enters the details of the tax invoice containing the payment of tax in its books of accounts. The appellant had outsourced the job of collection of original tax invoices to one M/s. MID Controls Private Limited, an Agency specialised for collecting documents. The appellant is entitled to claim Input Tax Credit of the amount of tax paid on the purchases made from the registered dealer of motor vehicle as per Section 19(2) of the Tamil Nadu VAT Act, 2006. As per Section 19(11), if a dealer has not claimed Input Tax Credit for a particular month, the dealer can claim the Input Tax Credit before the end of the financial year or before 90 days from the date of purchase whichever is later. When the appellant filed its returns for the assessment year 2007­2008 for want of the tax invoices, the said Input Tax Credit could not be claimed. The appellant, however, filed revised returns claiming Input Tax Credit on the receipt of the tax invoices from the dealer. The appellant also filed it....
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....rved on the petitioner on 16.06.2009 and direct the respondent to allow the appellant's claim of Input Tax Credit for the sum of Rs. 1,28,36,822/­, pass such other or further orders as this Hon'ble Court may deem fit and proper on the facts and circumstances of the case and thus render justice." 5. We may also notice the facts of another Civil Appeal No. 10503­10507 of 2018 arising out of SLP(C) Nos.11319­11323 of 2014 (Sri Devi Enterprises vs. The Commercial Tax Officer & Anr.). 6. The appellant is a partnership firm which owns petrol pump and deals in petrol, diesel, Auto LPG and Lubricating Oils (all products of Bharat Petroleum Corporation Limited). The appellant's claim for Input Tax Credit was disallowed by order dated 11.04.2011. The respondent placed reliance on time limit under Section 19(11) of Tamil Nadu VAT Act, 2006 for disallowing Input Tax Credit to the appellant. Aggrieved by the aforesaid order dated 11.04.2011 Writ Petition (C) No.10648 of 2011 was filed by the appellant wherein following reliefs were claimed: "28.It is therefore just and necessary that this Hon'ble Court may be pleased to issue a Writ of Declaration or any ....
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....The writ petitions challenging the constitutionality of Section 19(11) having failed the writ petitions challenging assessment orders/show cause notices have no legs to stand and therefore, they should necessarily fail. 85. In cases where final orders of assessment have been challenged, the assessees shall be entitled to prefer statutory appeal against such order and if such appeals are presented, whithin a period of 60 days from the date of receipt of a copy of this order, the same shall be entertained by the appellate authority subject to the assessee fullfilling other mandatory statutory conditions except rejecting those appeals on the ground of limitation. In ceases where the petitioners have challenged show cause notices, they are at liberty to submit their explanation. If such explanation is submitted within a period of 30 days from the date of receipt of a copy of this order, the assessing authority shall consider the case in accordance with law. 86. In the result, all the writ petitions are dismissed holding that Section 19(11) is a valid piece of legislation, cannot be struck down as being either unreasonable or discriminatory and violative of Article 265 and 360A of....
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....9(20) of the T.N.VAT Act, 2006 has been upheld and it has been laid down that whenever concession is given by the statute or notification, the conditions thereof should strictly be complied with in order to avail such concession, is fully applicable in the facts of the present case and all the appeals are liable to be dismissed. 13. From the submissions of the learned counsel for the parties and evidence on record following are the issues which arise for consideration in this batch of appeals : (1) Whether Section 19(11) violates Article 14 and 19(1)(g) of the Constitution of India ? (2) Whether Section 19(11) is inconsistent to Section 3(3) of the Act ? (3) Whether Section19(11) is directory provision, non­compliance of which cannot be a ground for denial of input tax credit to the appellants ? (4) Whether denial of input tax credit to the appellants is contrary to the scheme of VAT Act, 2006 ? (5) Whether Assessing Authorities could have extended the period for claiming Input Tax Credit beyond the period as provided in Section 19(11) of Tamil Nadu VAT Act, 2006 ? 14. Before we enter into the submissions of the learned counsel of the parties, it is necessa....
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....), in the case of goods specified in Part B or Part ­ C of the First Schedule, the tax under this Act shall be payable by a dealer on every sale made by him within the State at the rate specified therein: Provided that all spare parts, components and accessories of such goods shall also be taxed at the same rate as that of the goods if such spare parts, components and accessories are not specifically enumerated in the First Schedule and made liable to tax under that Schedule.] (3) The tax payable under sub­section (2) by aregistered dealer shall be reduced, in the manner prescribed, to the extent of tax paid on his purchase of goods specified in Part ­ B or Part ­ C of the First Schedule, inside the State, to the registered dealer, who sold the goods to him." 16. Section 19 contains a heading "Input Tax Credit". Section 19 contains 20 sub­sections. Section 19 enumerates several sub­sections which provide that no Input Tax Credit is allowed in certain circumstances whereas other provisions contain statutory scheme under which Input Tax Credit is permissible. In the present case we are concerned with Section 19(11) which is to the following effect: ....
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....ion in the statute is not to be read in isolation rather it has to read along with other related provisions itself, more particularly when the subject matter dealt within different sections or parts of the same statute is the same. This proposition was reiterated by this Court in Kailash Chandra and another versus Mukundi lal and others, 2002 (2) SCC 678. In paragraph 11, following has been laid down: ­ "11. A provision in the statute is not to be read in isolation. It has to be read with other related provisions in the Act itself, more particularly, when the subject­matter dealt with in different sections or parts of the same statute is the same or similar in nature." 19. Here we have noticed that Input Tax Credit is being allowed under Section 3 which is provision on "levy of taxes on sale of goods". Section 3 is a charging section which provides for levy of taxes on sale of goods. Sub­section (3) is the part of the same scheme where tax payable under sub­section (2) by registered dealer shall be reduced, in the manner prescribed, to the extent of tax paid on his purchase of goods. Other provisions of the Act elaborated and explained the whole mechanism of t....
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.... purchase of capital goods which are used in the manufacture of exempted goods and taxable goods, input tax credit shall be allowed to the extent of its usage in the manufacture of taxable goods in the manner prescribed.] (7) No registered dealer shall be entitled toinput tax credit in respect of - (a) goods purchased and accounted for in business but utilized for the purpose of providing facility to the proprietor or partner or director including employees and in any residential accommodation; or (b) purchase of all automobiles including commercial vehicles, two wheelers and three wheelers and spare parts for repair and maintenance thereof, unless the registered dealer is in the business of dealing in such automobiles or spare parts; or (c) purchase of air­conditioning units unless the registered dealer is in the business of dealing in such units. (8) No input tax credit shall be allowed toany goods purchased by him for sale but given away by him by way of free sample or gift or goods consumed for personal use. (9) No input tax credit shall be available toa registered dealer for tax paid or payable at the time of purchase of goods, if such&s....
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....r selling the goods furnishes to the prescribed authority in the prescribed manner- (a) a declaration duly filled andsigned by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or (b) if the goods are sold to theGovernment, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government." 24. Rule 6 of Central Sales Tax (Kerala Rules) has been noticed in paragraph 5, which is to the following effect: ­ "5. Rule 6 of the Central Sales Tax (Kerala) Rules, 1957 read as follows: "6. (1) Every dealer registered under Section 7 of the Act and every dealer liable to pay under the Act shall submit a return of all his transaction including those in the course of export of the goods out of the territory of India in Form II together with connected declaration forms so as to reach the assessing authority on or before the 20th of each month showing the turnover for the preceding month and the amount or amounts collected by way of tax together with proof for the payment of tax due thereon under t....
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....troduce anything from the Act referred to as to the thing which is to be done or the time for doing it............". 26. This Court, in above view of the matter, held that Rule 6(1) was ultra vires to Section 8(4) read with Section 13(3) and 13(4) of the Act. 27. The ground on which Rule 6 was held as ultra vires has been clearly noticed by this Court in paragraph 6 as noticed above. It is relevant to notice that in the same paragraph this Court had noticed Section 13(4)(g) of the Act where the State was empowered to make rule with regard to the 'time'. Thus, this Court noticed the contradiction in phraseology of Section 8 sub-Section (4) and Section 13 sub­section (4) and held that non­mention of time in Section 8(4) is for clearly denying the rule making power to make any rule pertaining to the time. Thus, the above case has no bearing in the present controversy, since, in the present case the time period is prescribed in Section 19(11) itself which is a part of the Act and has to be read with Section 3 sub­section (3). 28. Another judgment which needs to be noticed is judgment of this Court in Commissioner of Central Excise, Madras versus Home Ashok ....
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.... This change operated till 15­42000. This case, therefore, falls within the above period i.e. 15­4­1987 to 15­4­2000. Under this amended Rule 57­E the right of the manufacturer to obtain additional MODVAT credit in respect of inputs on which further duty had been paid for any reason subsequent to the date of the receipt of inputs by the manufacturer is recognised. However, such right accrues to the manufacturer subject to his complying with the procedure of adjustment contemplated in Rule 57­E, as amended." 30. In the above case, Rule 57­E was amended w.e.f. 15.04.1987 providing for MODVAT credit but department contended that since the amendment shall apply prospectively the respondents were not entitled to claim MODVAT credit. The High Court had held that Rule 57­E as amended was clarificatory in nature and shall not affect the right of manufacturer to claim MODVAT credit for duty paid on inputs. In paragraph 4 following has been held: ­ "4. In our view, therefore, the courts below were right in holding that Rule 57­E was procedural, clarificatory and therefore would not affect the substantive rights of the manufacturer of the spec....
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....subject, however to deduction of one per cent of the sale price of such goods sent out of the State and sold there. We fail to understand how a valid grievance can be made in respect of such deduction when the very extension of the benefit of set­off is itself a boon or a concession. It was open to the rule­making authority to provide for a small abridgement or curtailment while extending a concession. Viewed from this angle, the argument that providing for such deduction amounts to levy of tax either on purchases of raw material effected outside the State or on sale of manufactured goods effected outside the State of Maharashtra appears to be beside the point and is unacceptable. So is the argument about apportioning the sale­price with reference to the proportion in which raw material was purchased within and outside the State." 33. A Three­Judge Bench in (2005) 2 SCC 129, India Agencies (Regd.), Bangalore versus Additional Commissioner of Commercial Taxes, Bangalore had occasion to consider Rule 6(b)(ii) of Central Sales Tax (Karnataka) Rules, 1957, which requires furnishing original Form­C to claim concessional rate of tax under Section 8(1). This Court h....
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....ture and the courts are not to tinker with the same." 35. The judgment on which learned Advocate General of Tamil Nadu had placed much reliance i.e. Jayam and Company versus Assistant Commissioner and Another, (2016) 15 SCC 125, is the judgment which is relevant for present case. In the above case, this Court had occasion to interpret provisions of Tamil Nadu Value Added Tax Act, 2016, Section 19(20), Section 3(2) and Section 3(3). Validity of Section 19(20) was under challenge in the said case. This Court after noticing the scheme under Section 19 noticed following aspects in paragraph 11: ­ "11. From the aforesaid scheme of Section 19 following significant aspects emerge: (a) ITC is a form of concession provided by the legislature. It is not admissible to all kinds of sales and certain specified sales are specifically excluded. (b) Concession of ITC is available on certain conditions mentioned in this section. (c) One of the most important condition is that in order to enable the dealer to claim ITC it has to produce original tax invoice, completed in all respect, evidencing the amount of input tax." 36. This Court further held that it is a....
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....dit to the appellant. The conditions under which Input Tax Credit is to be given are all enumerated in Section 19 as noticed above. The condition under which the concession and benefit is given is always to be strictly construed. In event, it is accepted that there is no time period for claiming Input Tax Credit as contained in Section 19(11), the provision become too flexible and give rise to large number of difficulties including difficulty in verification of claim of Input Credit. Taxing Statutes contains self­contained scheme of levy, computation and collection of tax. The time under which a return is to be filed for purpose of assessment of the tax cannot be dependent on the will of a dealer. The use of word 'shall' in Section 19(11) does not admit to any other interpretation except that the submission of Input claimed cannot be beyond the time prescribed. Section 19(11), in fact, gives additional time period for claim of Input Credit. The Statutory scheme contemplates filing of the timely return before 20th of the succeeding month. Rule 7 of Tamil Nadu Value Added Tax Rules, 2007 deals with filing of returns. Rule 7(a) and (b) are as follows: ­ "7. Filing of Return....
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.... of Prevention of Food Adulteration Rules, 1955, which requires supply of copy of the report of the public analyst within period of 10 days. The said rule was held to be directory. While considering the above case, following observations were made by this Court:­ "......There are no ready tests or invariable formulae to determine whether a provision is mandatory or directory. The broad purpose of the statute is important. The object of the particular provision must be considered. The link between the two is most important. The weighing of the consequence of holding a provision to be mandatory or directory is vital and, more often than not, determinative of the very question whether the provision is mandatory or directory. Where the design of the statute is the avoidance or prevention of public mischief, but the enforcement of a particular provision literally to its letter will tend to defeat that design, the provision must be held to be directory, so that proof of prejudice in addition to non­compliance of the provision is necessary to invalidate the act complained of. It is well to remember that quite often many rules, though couched in language which appears to be impe....
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....tatute. The interpretation of the Rule 9(j) in the above case was on its own statutory scheme and has no bearing in the present case. We, thus, are of the view that time period as provided in Section 19(11) is mandatory. Issue no. 5 43. One of the submission advanced by learned counsel for the appellant was that appellant assessee had valid explanation for not claiming Input Tax Credit within the time provided under Section 19(11), hence, the authority had jurisdiction to extend the time. It is submitted that time period as contained in Section 19(11) is not akin to the law of limitation. We have already found that expression "shall" occurring in Section 19(11) is mandatory whose compliance is necessary for claiming Input Tax Credit. The appellant has placed reliance on judgment of this Court reported in Surinder Singh versus Central Government and Others, 1986 (4) SCC 667. Learned Counsel submits that in the above case Central Government which was exercising authority under Displaced Persons (Compensation and Rehabilitation) Act, 1954 was held to be entitled to extend the time which was required for depositing the auction amount. In the above case, the officials of the Centr....
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....y power in nature as the title of the section itself indicates. By enacting this section Parliament has conferred wide powers on the Central Government to call for the record of any case and to pass any order which it may think fit in the circumstances of the case. The only limitation on exercise of this power is that the Central Government shall not pass any order which may be inconsistent with any of the provisions of the Act and the rules made thereunder. Therefore, the Central Government or the delegated authority has power to set aside any order of the subordinate authorities, or to issue directions which it may consider necessary on the facts of a case subject to the aforesaid rider. This power is intended to be used to do justice and to mitigate hardship to a party unriddled by technicalities. Shri Rajni Kant while exercising powers of the Central Government under Section 33 of the Act had ample jurisdiction to set aside the orders of the subordinate authorities cancelling the auction held on August 24, 1959 and to permit the appellant to deposit the balance amount of the purchase money and he further had jurisdiction to extend the time initially granted by him. Extension of....