TaxTMI 
TaxTMI 
2020 (2) TMI 296
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....retary/Commissioner of Commercial Taxes. 2.Operative portion of the impugned order reads as under:- " 1.With reference to references above, it is informed that as per section 12 (1) of TNVAT Act the purchase tax is to be paid by a registered dealer of any taxable goods from unregistered dealer / sources or from registered dealers who are exempted either generally or conditionally from payment of tax on sale of such goods, if such goods are purchased. Such purchase tax liability is only based on the conditions specified under clauses (a) (b) (c) and (d) of Section 12 (1) of TNVAT Act. On being covered under any one of such clauses of Section 12 (1), the dealer effecting purchase of goods from aforesaid sources shall pay purchase ....
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....h the respective orders. These writ petitions were allowed. Thereafter, the impugned order came to be passed by the 1st respondent. 5.Though the impugned order talks about the jewellry and not textile products manufactured and sold by the petitioner, it is evident that the impugned order has answered the principal issue. It has held that the petitioner a dealer registered under the TNVAT Act, 2006 who purchased inputs/goods from unregistered dealers was liable to discharge purchase tax liability under Section 12 (1) of the TNVAT Act, 2006 in cash. By the impugned order, the 1st respondent has directed the petitioner to pay the taxes for the relevant assessment years in question in terms of the assessment orders. 6. Learned counsel for....
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....ioner further submitted that the issue was revenue neutral as tax payable under Section 12(1) of TNVAT Act was available as input tax credit under Section 12(2) of Act and therefore the petitioner cannot be asked to pay tax in cash under Section 12(1) of the TNVAT Act, 2006. The learned counsel for the petitioner also relies on the decision of this Court rendered in Commissioner of Central Excise Vs. Kohinoor Printers Private Limited, 2015 (321) ELT 448 which in turn placed reliance on the decision of the Honourable Supreme Court in Eicher Motors Ltd Vs. Union of India, 1999 (81) ECR 7 (SC). He also relies on the decision of this Court in Commissioner of Central Excise Vs. SPIC Ltd, 2014 (305) ELT 484. 9.Learned Additional Government Ple....
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....der Section 3(2) by a registered dealer is to be reduced in the manner prescribed to the extent of tax paid on the purchase of goods specified in Part B or Part C of the 1st schedule, inside the State, to the registered dealer, who sold the goods to him. 13.Thus, there is no scope for ambiguity. Input tax credit can be adjusted only for payment of tax under Section 3(2) and not under Section 12(1) of the Act. Purchase tax payable under Section 12(1) of the Act has to be paid in cash. Such purchase tax can be adjusted on the output tax in terms of section 3(3) of the Act. 14. The purpose of allowing ITC is to reduce the cascading effect of the taxes borne on the inputs and to allow seamlessly ITC at each stage of sale and purchase. ....
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....ying unutilised on the goods manufactured prior to 16.3.1995 on which they had paid duty for the purpose of manufacturing goods. Therefore, the decision of the Court rendered in Kohinoor Printers Private Limited refered to supra and in the case of Commissioner of Central Excise Vs. SPIC Ltd, 2014 (305) ELT 484 is of no relevance. 19. Since there is no scope for discharging purchase tax liability from and out of Input Tax Credit (ITC), I am unable to agree with the views expressed in Bhima Jewellery Vs The Commercial Tax Officer's case referred to supra. The said decision is based on a concession given by an officer of the Commercial Tax Department. Such confessions are not binding on the Court. Even clarification of authorities are no....