2019 (8) TMI 1699

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f tax. 3. The Act provides for a claim of Input Tax Credit (hereinafter referred to as 'ITC') on the tax paid on goods purchased within the State from a registered dealer. The relevant provision in this regard is Section 19(2) that reads thus: 19(2) Input tax credit shall be allowed for the purchase of goods made within the State from a registered dealer and which are for the purpose 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) .... (iv).... (v) Sale in the course of inter-State trade or commerce falling under sub-section (1) of section 8 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) ; 4. The provisions of Section 19(2)(v) stood substituted in 2015 as per the following amendment: '2. In Section 19 of the Tamil Nadu Value Added Tax Act, 2006 (hereinafter referred to as the principal Act)-- (1) in sub-section (2) (i) for clause (v) the following clause shall be substituted namely, under sub-section(1) and (2) of Section 8 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956)' 5. Thus, while the position prior to amendment was that the ITC claim....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....advanced by the petitioner revolve around the language of the amendment Act itself which 'substitutes' the new clause for the erstwhile clause. According to the petitioner, the effect of substitution is that the new clause steps into the position of the old clause from the very date of inception of the original clause, that is, with effect from 01.07.2007, being the date from which the Tamil Nadu Value Added Tax became operative. 9. Learned counsel for the petitioner relies upon the following judgments and orders of this Court in support of his stand: i) Judgment of the Supreme Court in Vijay Vs. State of Maharashtra and others dated 26.07.2006 in Appeal (Civil) No.3164 of 2006. ii) M/s Everest Industries Limited, Coimbatore Vs. the State of Tamil Nadu, Chennai dated 06.02.2007 in W.P No. 7969 of 2014 and batch iii) Sakthi Masala (P) Ltd., and another Vs. Assistant Commissioner (CT), Perundurai Assesssment Circle, Perundurai ((2013) 64 VST 385) iv) Nazareth Foods (P) Ltd., Chennai Vs. the Assistant Commissioner (CT), Aminjikkarai Assessment Circle Chennai dated 29.04.2013 in W.P No. 11121 to 11124 of 2011. 10. The stand of the revenue is that the though the word u....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sion Bench sitting at the Principal Seat (to which I am party) concluded that a Notification issued in terms of the Central Excise Act would operate only prospectively and not retrospectively. (vii) Judgment of the Supreme Court in Sharif-Ud-Din Vs. Abdul Gani (1980 AIR 303) wherein the Bench was concerned with the question of whether the provisions of Section 89(3) of the Jammu and Kashmir Representation of People Act, 1957 were mandatory or directory. 12. A Division Bench of this Court considered, the case of Honest Corporation (supra), an exemption from tax on the turnover from sales of Appalam, vermicelli and bakery products, all unbranded, and whether such exemption was prospective or retrospective. Citing an earlier decision of this Court in G.Pakirisamy and Co. vs. State of Tamil Nadu (Writ Petition Nos. 14117 of 1988 etc. batch dated 10.05.1994), the Bench states that the power to issue notifications under Section 17 of the TNGST Act granting exemptions or reductions in the rate of tax was generally always prospectively. In fact, Section 17 of erstwhile TNGST has been amended by Act 23 of 1974, effective from 01.04.1974 to specifically provide that Notifications issued t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....gislation. In the present case, we are concerned with the claim of ITC. Section 19(2)(v) provides from inception, that an assessee engaging in interstate trade or commerce with registered dealers in terms of Section 8(1) of the CST Act is entitled to claim ITC on such transactions. It is only vide the amendment in 2015 that transactions with unregistered dealers were also extended the benefit of ITC in terms of amended Section 19(2)(v). 18. An understanding of the provisions of Section 8 of the CST Act, both sub-sections (1) and (2), is required, to examine the purpose of the substitution and to determine whether such substitution was intended to take effect from the date of inception of the enactment or the date of amending Act and the provision is thus extracted below: 8. Rates of tax on sales in the course of inter-State trade or commerce.- (1) Every dealer, who in the course of inter-State trade or commerce, sells to a registered dealer goods of the description referred to in sub-section (3), shall be liable to pay tax under this Act, which shall be three percent, of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State und....