TaxTMI 
TaxTMI 
2021 (4) TMI 1170
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....earned under the Tamil Nadu Value Added Tax Act 2006. Thus, the net tax to be paid by the petitioner was determined as Rs. 28,26,034/-. 5. Meanwhile, the assessment for the Assessment Year 2010-2011 under the provisions of the Central Sales Tax Act, 1956 was also completed on 29.11.2013, wherein, it was determined that the petitioner was in arrears of a sum of Rs. 15,01,080/- for the said Assessment Year. 6. Under these circumstances, a Notice was issued to the petitioner and called upon the petitioner to pay arrears amount of Rs. 34,24,084/- [15,01,080 + 28,26,034 - 2,00,000 - 7,03,030] for these two Assessment Years. The aforesaid arrears was arrived after setting off the subsequent payments of Rs. 2,00,000/- and Rs. 7,03,030/- by the petitioner. 7. The petitioner therefore agreed to adjust another amount of Rs. 9,90,815/- from its unutilised Input Tax Credit as per tax return of March, 2012. The petitioner further stated that it had made further payments for a sum of Rs. 1,65,342/- and therefore stated that the net tax payable by the petitioner for the Assessment Year 2011-12 was only Rs. 9,74,520/- and therefore requested the respondent to issue a revised Notice in For....
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...., the net tax due from the petitioner was re-determined as Rs. 34,84,548/- [ Rs. 36,16,923- Rs. 1,68,375]. 16. Against the said order, the petitioner filed an application under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 on 01.09.2014 to revise the said order of re-assessment dated 31.07.2014. The said application has resulted in the second mentioned impugned order dated 25.09.2014. The respondent has rejected the application filed under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 as made applicable to assessment under Central Sales Tax Act, 1956. 17. It is the contention of the petitioner that adjustment of input tax credit against tax liability under the provisions of the Central Sales Tax Act, 1956 is permissible under Rule 10(10(b) of the Tamil Nadu Value Added Tax Rules, 2007. 18. The learned counsel for the petitioner placed reliance on the following decisions of this Court in i. Tvl.Mahaajay Spinners India Pvt. Ltd., Vs. The Commercial Tax Officer, Salem, in W.P.No.28275 of 2016. ii. M/s.Sri Laxmi Exports Vs. The Assistant Commissioner (CT), Madurai, in W.P. (MD) Nos.9674 to 9679 of 2014. iii. Tvl.Shakthi Tech Vs. Sta....
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....he claim of input tax credit of Rs. 23,31,952/- as they have not adjusted the same under the Tamil Nadu Value Added Tax Act, 2006. In the circumstances the input tax claim of Rs. 23,31,952/- has lapsed to Government. Therefore the lapsed amount cannot be adjusted towards arrears of sales tax that too for the arrears under the Central Sales Tax Act 56 for the interstate sales effected without C declaration forms for the year 2010-11 and 2011-12 under the CST Act 56. Since there is limitation prescribed as within the same financial year as laid down under Sec.18(3) of the Tamil Nadu Value Added Tax Act, 2006, the claim of adjustment is not valid in law. In the case of USA Agencies Vs. The Commercial Tax Officer Attur (Rural) Assessment Circle reported in 2013-14(19) TNCTJ page 149 the High Court observed as follows W.P.Nos.902, 1202, 2016, 2233, 3732, 4329 to 4331, 5766, 20302, 25124 and 26281 of 2009; dated 17.07.2013 the High Court observed as follows:- "32.Like wise as per Section 19(5)(c), no Input Tax Credit shall 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 c....
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....er Rate of tax Tax due Rs. 22124163-00 2% 442483-00 73093-00 2% 1462-00 36240-00 5% 1812-00 15059675-00 12.5% 1882459-00 3983521-00 14.5% 577610-00 2289124-00 4% 91565-00 2139575-00 5% 106979-00 5846048-00 12.5% 7,30,756-00 22. Challenging the impugned orders, the learned counsel for the petitioner submits that the credit availed by the petitioner under the provisions of the TNVAT Act, 2006 has not been reversed. It is submitted that therefore the adjustment of tax liability under Central Sale Tax Act, 1956 by the petitioner cannot be disturbed. 23. It is further submitted that the petitioner is not claiming refund of the Input Tax Credit on the zero rated sales effected by it. On the other hand, the petitioner has merely adjusted the tax liability against the amount determined on the taxable turn over determined in the Assessment Orders under Central Sales Tax Act, 1956. 24. It is submitted that Section 18 of the TNVAT Act, 2006 contemplates 2 situations, i.e. adjustment of Input Tax Credit towards discharge of tax liability and refund of tax borne on zero rated sale. In this case, the petitione....
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....1956); (ii) Sale of goods to any registered dealer located in Special Economic Zone in the State, for the purpose of use in manufacture, trading, production, processing, assembling, packaging or for use as packing material or packing accessories if such registered dealer has been authorized to establish such units by the authority specified by the Central Government in this behalf; and (iii) Sale of goods to International Organizations listed out in the Fifth Schedule. (2) The dealer, who makes zero rate sale, shall be entitled to refund of input tax paid or Payable by him on purchase of those goods, which are exported as such or consumed or used in the manufacture of other goods that are exported as specified in sub-section (1), subject to such restrictions and conditions as may be prescribed. (3) Where the dealer has not adjusted the input tax credit or has not made a claim for refund within a period of one hundred and eighty days from the date of making zero rate sales accrual of such input tax credit, such credit shall lapse to Government. 30. The petitioner has claimed that it has effected zero rated sale within the meaning of Section 18 ....
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....urpose of- (i)re-sale by him within the State; or (ii)use as input in manufacturing or processing of goods in the State; or (iii) use as containers, labels and other materials for packing of goods in the State; or (iv) use as capital goods in the manufacture of taxable goods; (v) sale in the course of inter- State trade or commerce falling under sub-sections (1) and (2) of Section 8 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956); (vi) agency transactions by the principal within the State in the manner as may be prescribed. 36. There is an apparent contradiction between Section 19(5)(c) and Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006. While, Sub-Section (2)(ii) and Sub-Section (2)(v) to Section 19 of the Tamil Nadu Value Added Tax Act, 2006 seems to allow credit without any limitation, Section 19(5)(c) of the said Act puts a restriction from availing of Input Tax Credit on goods sold as such or used in the manufacture of other goods and sold in the course of inter-State trade and commerce falling under Section 8(2) of the Central Sales Tax Act, 1956. 37. In fact, earlier on 17.01.2005, a White Paper was released by the Committ....
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....bility under Central Sales Tax Act , 1956 only if a dealer produced Form C prescribed in the Central Sales Tax (Registration and Turnover) Rules, 1957. 41. Rule 10(9)(a) of the Tamil Nadu Added Tax Rules, 2007 as extracted above seems to sync with Section 9(5)(c) of the Tamil Nadu Value Added Tax Act, 2006 by restricting the Input Tax Credit on inter- State sales only if Form C prescribed in the Central Sales Tax (Registration and Turnover) Rules, 1957 is filed by the dealer. 42. Only if such credit is available, it can be utilized for discharging the tax liability under Rule 5(3-A) of the Central Sales Tax (Tamil Nadu) Rules, 1957. 43. The language adopted in Rule 5(3-A) of the Central Sales Tax (Tamil Nadu) Rules, 1957makes it clear that there is a one to one corelation i.e. availing of input tax credit in accordance with Rule 10(9)(a) of the Tamil Nadu Added Tax Rules, 2007 and its ultimate utilization for discharging tax liability under Central Sales Tax Act, 1956 in terms of Rule 5(3-A) of the Central Sales Tax (Tamil Nadu) Rules, 1957. 44. Thus, only if credit is available as per Rule 10(9)(a) of the Tamil Nadu Value Added Tax Rules, 2007 read with Section 9(5) of....
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.... unregistered dealers in other States, the State of Tamil Nadu had no mechanism to prevent evasion of tax and loss of revenue caused by trade with such unregistered dealers in the State of Tamil Nadu and was of the opinion that these provisions were violative of the constitutional provisions contained in Articles 14,19(1)(g) and 301. 50. The Hon'ble Supreme Court in TVS Motor Co. Ltd. Vs. State of Tamil Nadu, (2019) 13 SCC 403, observed that "Having regard to the above, we are of the opinion that the provisions of Section 19(5)(c) are to be read down by construing that those dealers who are making sales exclusively to the other State Governments (i.e. outside the State of Tamil Nadu), the said States would be deemed as registered dealers for the purposes of availing benefits of ITC. Otherwise, in such a situation, it would be difficult to hold that test of reasonable classification is met in this limited context. It becomes unnecessary to deal with other contentions of MrBagaria". 51. However, to come to the above conclusion, the Court in para 43 held observed, "Sub-section (5) stipulates certain contingencies where such ITC would not be admissible. There is no quarrel about ....