TaxTMI 
TaxTMI 
2024 (9) TMI 1932
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.... not be recovered from the petitioner under Section 19(4) and Section 19(5)(c) of the TNVAT Act, 2006. The details of the Impugned Notices are as under:- Sl. No. W.P.No. Impugned Notice Date ITC Reversal under Section 19(4) ITC Reversal under Section 19(5)(c) 1. W.P.No.1876 of 2015 18.12.2014 (Assessment Year 2012-2013) Rs.1,04,72,518/- (From April 2012 to March 2013) Rs.2,26,222/- (From April 2012 to March 2013) 2. W.P.No.1877 of 2015 15.12.2014 (Assessment Year 2013-2014) Rs.3,44,36,026/- (From April to October 2013) Rs.19,031/- (From April 2013 to March 2014) Rs.92,00,653/- (From November 2013 to March 2014) 3. W.P.No.1878 of 2015 12.12.2014 (Assessment Year 2014-2015) Rs.99,33,244/- Rs.2,980/- 4. Along with the above writ petitions, the petitioner had filed W.P.No.1879 of 2015 and W.P.No.2881 of 2015. After these cases were heard together, the learned Senior Counsel for the petitioner had submitted that if the above mentioned three writ petitions are disposed of favourably, W.P.No.1879 of 2015 and W.P.No.2881 of 2015 can be dismissed as not pressed. After ....
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....of the Assessing Officer. 12. The specific case of the petitioner before this Court is that the restrictions under Section 19(4) and Section 19(5)(c) of the TNVAT Act, 2006 will not apply on capital goods. 13. Learned Senior Counsel for the petitioner would submit that as far as the Input Tax Credit on capital goods used for manufacture of taxable goods in the State is governed by Section 19(3)(a) of the TNVAT Act, 2006 read with Rule 10(4)(e) of the TNVAT Rule, 2007 and is therefore not governed by the restrictions in the aforesaid provisions of the TNVAT Act, 2006 which have been invoked against the petitioner in the Impugned Notices for the respective Assessment Years. 14. On the other hand, it is the contention of the learned Additional Advocate General (AAG) who appears for the Commercial Tax Department that the definition of "input" and "input tax" under Section 2(23) and 2(24) of the TNVAT Act, 2006 makes it clear that "input" means any goods including "capital goods" purchased by a dealer in the course of his business and "input tax" means the tax paid under the Act in the manner prescribed by a registered dealer to another registered dealer on the purchase of good....
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.... prescribed. 21. Section 19(1) and Section 19(2) of the TNVAT Act, 2006 as in force and as it stood during the period in dispute read as under:- Section 19(1) and 19(2) of the TNVAT Act as in force Section 19(1) and 19(2) of the TNVAT Act during the period in dispute (Assessment Years 2012-2013, 2013-2014 and 2014-2015) Section 19. Input tax credit.- (1) There shall be input tax credit of the amount of tax paid under this Act, by the registered dealer to the seller on his purchases of taxable goods specified in the First Schedule: Provided that the registered dealer, who claims input tax credit, shall be establish that the tax due on purchase of goods has actually been paid in the manner prescribed by the registered dealer who sold such goods and that the goods have actually been delivered: Provided further that the tax deferred under Section 32 shall be deemed to have been paid under this Act for the purpose of this sub-section: [These provisos, before substitution by Section 8 of the Second Amendment Act (13 of) 2015, effective from 2....
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....he principal within the State in the manner prescribed as may be prescribed. Provided that input tax credit shall be allowed in excess of 3% of tax for the purpose of specified in clause (v). 22. As far as the "capital goods" are concerned, there is a special dispensation in Section 19(3)(a) of the TNVAT Act, 2006. Section 19(3)(a) of the TNVAT Act, 2006 reads as under:- "19. Input Tax Credit.- (1) ..... (2) ..... (3) (a) Every registered dealer, in respect of purchases of capital goods, [for use in the manufacture of taxable goods], shall be allowed input tax credit in the manner prescribed. (b) ..... (c) ....." 23. The expression used in Section 19(3)(a) is "in the manner prescribed". The "manner prescribed" is in Rule 10(4)(e) of the TNVAT Act, 2007. Section 19(3) of the TNVAT Act, 2006 and Rule 10(4) of the TNVAT Rule, 2007 read as under:- Section 19(3) Rule 10(4) 19. Input tax credit.- (1) ..... (2) ..... (3) (a) Every registered dealer, in respect of purchases of capital goods, for use in the manufacture of taxable goods, shall be allow....
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....le goods the purchase of capital goods X and zero rated sales Total sales turnover of taxable goods, zero rated sales and sales of exempted goods 24. There is no dispute as to the other requirements of Section 19(3) of the TNVAT Act, 2006 and Rule 10(4) of the TNVAT Rules, 2007 have been met by the petitioner. 25. The expression "goods" has been defined in Section 2(21) of the TNVAT Act, 2006 to mean all kinds of movable property (other than newspapers, actionable claims, stocks and shares and securities). The expression "taxable goods" has been defined in Section 2(37) of the TNVAT Act, 2006 to mean goods other than exempted goods specified in the Fourth Schedule to the TNVAT Act or goods exempted by notification by the Government. The expression "goods" includes all materials, commodities and articles including the goods (as goods or in some other form) invovled in the execution of works contract or those goods to be used in the fitting out, improvement or repair of movable property; and all growing crops, grass or things attached to, or forming part of the land which are agreed to be severed before sale or under the contract of sale. 26. The expression....
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....puts" and "capital goods" separately. There has been a certain amount dilution and addition of the above prescription under TNVAT Act, 2006 and TNVAT Rules, 2007 by providing restrictions on the credit availed/available on "capital goods" which are used both for "taxable" and "non-taxable" goods under the TNVAT Act, 2006 and the TNVAT Rules, 2007. 30. As far as the "capital goods" are concerned, there are specific restrictions in Section 19(3) of the TNVAT Act, 2006 and in Rule 10(4)(b) of the TNVAT Rules, 2007, the content of which has been extracted above. 31. The only restriction that is discernible as per Rule 10(4)(c) of the TNVAT Rules, 2007 which is "the manner prescribed" for the purpose of Section 19(3)(a) of the TNVAT Act, 2006. 32. As per Rule 10(4)(b) of the TNVAT Rules, 2007, in respect of "capital goods" purchased within the State, a registered dealer is entitled to avail upto fifty per cent of the input tax credit in the same financial year and the balance of the input tax credit before the end of the third financial year, provided the said capital goods are in possession of the dealer. 33. The other restriction as far as "input tax credit" on "capital go....