2020 (2) TMI 1189

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....d following notices issued to it:- W.P.No. Date Assessment Year/ Period Amounts proposed to be improved notice (Rs.) W.P.No.37654/2016 .09.2016 2013-14 24,35,550/- W.P.No.37655/2016 .09.2016 2014-15 1,16,86,733/- W.P.No.39635/2016 13.10.2016 2016-17/ July 16 8,51,098/- W.P.No.39636/2016 13.10.2016 2016/17 Aug. 16 12,54,916/- 3. These notices call upon the petitioner to provisionally reverse input tax credit on the inputs utilised in the manufacture of internal combustion engine liable to tax at the rate prescribed under Entry 44 of the 1st Schedule to Part C of the TNVAT Act, 2006 and cleared to Special Economic Zone located outside the State of Tamil Nadu. 4. The petitioner ....

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....le of the internal combustion engines by the petitioner was on the strength of Form 1 Declaration under Section 8(6) of the Central Sales Tax Act, 1956 read with Rule 12(11) of the Central Sales Tax Rules, 1957 and therefore the petitioner cannot be denied of the proportionate input tax credit. 9. I have heard the learned counsel for the petitioner and the learned Government Advocate for the respondents. 10. The grant of input tax credit is governed by Section 19(1) of the TNVAT Act, 2006 for the purpose specified in sub-Section (2). The circumstances specified in sub-Section (2) to Section 19 of the Act is reproduced below:- Section 19 - Input tax credit (2) Input tax credit shall be allowed for the purchase of g....

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....ommerce falling under sub-Section (2) of Section 8 of the Central Sales Tax Act, 1956. 13. From a reading of the above provision, it is evident that input tax credit could be denied only Section 19(5)(a),(b) & (c) of the TNVAT Act, 2006 on inputs. 14. The restrictions in Section 19(5)(a) of the TNVAT Act, 2006, will apply only to such inputs which are bought and sold as such and not to inputs used in the manufacture of goods. 19(5)(b) is not relevant for the present case. 15. Under Section 19(5)(c) of the TNVAT Act, 2006, no input tax credit can be allowed on the purchase of goods sold as such or used in the manufacture of other goods and sold in the course of inter-State trade or commerce falling under sub-Section (2) of Section 8....

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....ction 15 of the TNVAT Act, 2006. 20. Such sale is neither exempted under 4th Schedule of the TNVAT Act, 2006 nor exempted under a Notification of the State Government as the expression of "Government" in Section 15 can only mean the "State Government" has defined Section 2(22) of the said Act. 21. Further, the restrictions that are contemplated in Section 19(5)(a)of the TNVAT Act, 2006, are quay inputs re traded as such and not on inputs which are used in the manufacture of finished goods while under Section 19(5)(c), restriction is only for sale which fall under Section 8(2) of the Central Sales Tax Act,1956. 22. Further sub-clause 4 to Section 19 contains a restriction on inputs tax credit, allowed on the tax paid in the State on....