TaxTMI 
TaxTMI 
2024 (1) TMI 1526
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. Whether provisions of Section 18(3A) of RVAT Act- 2003 can be shifted on the transactions of purchases?" In STR Nos. 225-227/2020, preferred by the revenue: "1. Whether in the facts and circumstances of the case of Rajasthan Tax Board was justified in law and has not acted perversely in confirming the order of appellate authority deleting the penalty under Section 61(2)(b) of the Act when the fact of availing wrongful ITC has been not dispute? 2. Whether in the facts and circumstances of the case of Rajasthan Tax Board was justified in law in treating the provisions of Section 61(2)(b) as per Section 61(1) of the Act and deleting the penalty not appreciating that the provision of the Section 61(2) are independent and the provision starts with non obstante clause?" Since the issue involved is common, with the consent of the parties, all these STRs were heard together and are now being decided by way of this common order. SUBMISSIONS OF ASSESSEE 2. Learned counsel for the assessee submits that the assessee is a registered dealer under the provisions of RVAT Act dealing in automobiles and having dealership agreement of automobi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of ITC or sales of goods at subsidized sale prices in comparison of purchase price. 3.2 The second submission of learned counsel for the assessee is that the present is not a case of any sale of vehicle at subsidized rates. Rather it is a case of availing the discounts/rebates without disturbing the quantum of tax charged by the supplier company at the time of effecting the sales to the company as being buyer of the goods under the provision of RVAT Act, 2003. Therefore, the same is a revenue neutral excise. 3.3. The third submission of learned counsel for the assessee is that denial of ITC is specifically provided under Section 18(3) of the RVAT Act and since none of the conditions mentioned therein have been violated by the assessee, the assessee is fully eligible to get the benefit of ITC. 3.4. The fourth submission of learned counsel for the assessee is that the amendment in Section 18(3A) has been made with the object and reason to check the tendency of claiming refund by the dealer. It is contended that Section 18(3A), accordingly, exclusively deals with situations which arose in sale transactions, hence the same has no application in the facts of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....issioner and Ors. (2016) 15 SCC 125, and ALD Automotive Pvt. Ltd. vs. CTO reported in (2019) 13 SCC 225 to submit that ITC is a form of concession and not a vested right, which can only be availed in accordance with statutory provisions. Therefore, it is contended that the revenue had rightly directed for reversal of ITC wrongly availed by the assessee along with the statutory interest. 5. Aggrieved by the setting aside of penalty, learned counsel for the revenue submits that penalty under Section 61(2)(b) of the RVAT Act is a statutory penalty and is mandatorily to be imposed. Moreover, there is no discretion vested with the revenue under the RVAT Act to waive off the said penalty. Reliance is this regard is placed on Hon'ble Supreme Court judgment of State of Gujarat and Ors. vs. Saw Pipes Ltd. reported in AIR 2023 SC 2113 and Union of India and Ors. vs. Dharamendra Textile Processors and Ors. reported in (2008) 13 SCC 369. ANALYSIS 6. Heard the arguments advanced by both the sides, scanned the record of the STRs and considered the judgments cited at Bar. 7. The assessee in the present case is a dealer of Tata Motors Limited. The assessee has a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shall not be included in the sale price, if charged separately in the invoice; Section 18- Input Tax Credit ... (3A) Notwithstanding anything contained in this Act, where any goods purchased in the State are subsequently sold at subsidized price, the input tax allowable under this section in respect of such goods shall not exceed the output tax payable on such goods. (emphasis supplied)" 8. It has been held by the Hon'ble Supreme Court in Jayam & Co. (supra) that ITC is not a vested right but in the form of concession provided by the statute and can only be claimed in accordance with statutory provisions and in the manner prescribed therein. When the statute therefore describes certain conditions on the availment of ITC, the assessee cannot bypass the said conditions. Section 18(1) prescribes that ITC shall only be allowed to registered dealers to the extent and manner as may be prescribed. Taxing statutes have to be construed/interpreted strictly. The Courts have to stick to literal rule of interpretation when interpreting a taxing statute. A bare perusal of Section 18(3A) of the RVAT Act makes it absolutely clear that benefit of ITC ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f discounts and schemes received by the assessee from the company, and is not the amount, which was reduced by him in sale bills from the sale price. In fact, it was not received from the cement company, in compliance to the various schemes. The Supreme Court has not accepted the stand of the Department in the Special Leave Petitions, that the sales tax can be levied on discount in a judgment delivered for the period, prior to 9.3.2011. As an alternative, it was stated in the reply that as per the trading results, if there is any loss in the trading account, it is because of the cut throat competition in the market. The assessee has managed the profits from the schemes and discounts received from the company, in the form of various discount schemes. The trading loss is a normal business phenomena, and it is very usual in the type of trade carried on by the assessee. In case, the input tax on the trading account is reversed, the assessee will get double loss, namely, that the assessee has passed the benefits of schemes and discounts on to the customers to get the sales, to achieve the target of the company, and further, he is not getting the benefit of entire input tax paid on purch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsidered in appeal against the order of assessment, provided such question was argued in the proceedings for assessment, and a ground has been taken in appeal. 40. For the aforesaid reasons, we uphold the constitutional validity of sub-section (3A) of Section 18 of the Rajasthan VAT Act, 2003." 10. The Hon'ble Supreme Court, in Jayam & Co. (supra), while considering the provisions of Tamil Nadu Value Added Tax Act, 2006, has categorically held that ITC is a form of concession and is not admissible to all kinds of sale and the same is subject to conditions imposed in the statute. The relevant portion of the said judgment is reproduced as under: "6. From the aforesaid, it is clear that the dealer had paid to the vendor VAT of Rs. 10/-. However, at the time of re-sale VAT actually allowed was Rs.9.50. That is the effect of sub-section (20) of Section 19, which reads as under: "S. 19(20) Notwithstanding anything contained in this section, where any registered dealer has sold goods at a price lesser than the price of the goods purchased by him, the amount of the input tax credit over and above the output tax of those goods shall be reversed." ....