TaxTMI 
TaxTMI 
2021 (8) TMI 595
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....le loss, in terms of Section 19(9)(iii) of the Tamil Nadu Value Added Tax Act, 2006 (in short 'Act') occasioned during the process of manufacture of Ghee, is covered by earlier decisions of this Court in the case of Rupa and Co. Ltd. Vs. CESTAT, Chennai (324 ELT 295) applied in the context of Commercial Taxes in A.R.S. Steels and Alloy International Pvt. Ltd. Vs. The State Tax Officer, Chennai (W.P.Nos.2885 of 2020 and batch) dated 24.06.2021 and Saradhambika Paper and Board Mills Pvt. Ltd. Vs. The State Tax Officer, Gobichettypalayam and Another (W.P.Nos.590 of 2021 and batch) dated 30.06.2021. The relevant portion of the order in W.P.Nos.2885 of 2020 and batch is extracted below: 'This batch of Writ Petitions relates ....
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....sel for the petitioner submits that apart from the legal issue raised in these Writ Petitions, statutory appeals have been filed with regard to the other issues. 5. This order is thus confined to a decision on the legal issue as to whether a reversal of Input Tax Credit (ITC) is contemplated in relation to loss arising from manufacturing process. 6. The petitioners are engaged in the manufacture of MS Billets and Ingots. MS scrap is an input in the manufacture of MS Billets and the latter, in turn, constitutes an input for manufacture of TMT/CTD Bars. There is a loss of a small portion of the inputs, inherent to the manufacturing process. The impugned orders seek to reverse a portion of the ITC claimed by the petitioners, ....
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.... by him by way of free sample or gift or goods consumed for personal use. (9) No input tax credit shall be available to a registered dealer for tax paid Omitted[or Payable] at the time of purchase of goods, if such- (i) goods are not sold because of any theft, loss or destruction, for any reason, including natural calamity. If a dealer has already availed input tax credit against purchase of such goods, there shall be reversal of tax credit; or (ii) inputs destroyed in fire accident or lost while in storage even before use in the manufacture of final products; or (iii) inputs damaged in transit or destroyed at some intermediary stage of manufacture. 9. The prescription in Section 19 is echoed in ....
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.... stolen, destroyed, written off or disposed of by way of gift or free samples; and (i)any tax paid in accordance with the provisions of sections 74, 129 and 130. 10. The impugned assessment orders reject a portion of ITC claimed, invoking the provisions of clause (h) extracted above. This relates to goods lost, stolen, destroyed, written off or disposed by way of gift or free samples. In my considered view, the loss that is occasioned by the process of manufacture cannot be equated to any of the instances set out in clause (h) above. 11. The situations as set out above in clause (h) indicate loss of inputs that are quantifiable, and involve external factors or compulsions. A loss that is occasioned by consumption ....