Madras High Court
Mohib Shoes Pvt. Ltd vs The Assistant Commissioner (St) on 30 June, 2022
W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 30.06.2022
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
Mohib Shoes Pvt. Ltd.
Represented by its Manager M.Vaseeq Ahmed,
No.65/30, Maddox Street,
Choolai, Chennai – 600 112. ... Petitioner
Vs
The Assistant Commissioner (ST),
Veperi Assessment Circle,
No.10, Greams Road,
Chennai – 600 006. ... Respondent
Prayer: Writ Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Certiorarified Mandamus, calling for the records on the file
of the respondent herein in his notice in TIN No.33790523748/2015-16
dated 07.03.2019 confirmed in the proceedings dated 08.03.2019 and quash
the same and issue a direction to consider and pass orders of refund as per
the Form-W for the month of July 2015 filed on 25.02.2016.
For Petitioner : Mr.N.Inbarajan
For Respondent : Mr.V.Prashanth Kiran
Government Advocate
1
https://www.mhc.tn.gov.in/judis
W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
ORDER
Heard Mr.N.Inbarajan, learned counsel for the petitioner and
Mr.V.Prashanth Kiran, learned Government Advocate for the respondent.
2.The petitioner is a private limited company and claims to have been
engaged in export sales. Sales to exporters have been treated as zero rated
sales in the returns filed for the year 2015-2016. Thus, and since there was
nil output to tax liability, available Input Tax Credit (in short 'ITC') was
claimed in terms of Section 18(3) of the Act read with Rule 11(2) of the
VAT Rules, 2007, as a refund, in prescribed form, being Form-W.
3.Form-W has been filed, admittedly, belatedly, and beyond the
period of 180 days as provided for under the Rules. The form ought to have
been filed within the period of 180 days from the date of exports as per
Section 18 of the TNVAT Act, 2006, but has been filed on 25.02.2016 with
a delay of less than a month. However, the delay as aforesaid, is not fatal to
the claim of refund, and for this purpose, one need only refer to the oft-
quoted decision of this Court in the case of R.K.Knits Vs. Assistant
Commissioner (CT), Adyar-II Assessment Circle, Chennai and Others [2015
(84) VST 521 (Mad)] that has been consistently, been followed in several
other cases.
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W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
4.The issue dealt with in that matter is identical to the present one,
and that assessee too had filed the form-W belatedly. However, this Court
had concluded that the petitioner was entitled for refund of ITC, its
entitlement to ITC itself not being disputed. Thus, the delay in filing of
Form W would not militate against its claim as it was only a procedural
requirement that must not stand in the way of a substantive claim.
5. The conclusion as above would apply on all fours to the present
matter as well in light of the undisputed position that (i) the assessee is an
exporter (ii) the turnover attracts zero rate of tax (iii) there are no taxable
sales, either domestic or interstate (iv) monthly returns are being filed in
time, disclosing the turnover as well as the carry forward of ITC (v) with the
filing of the returns in time, assessments are deemed to have been completed
as on 31.10.2016 as deemed assessments accepting the returns filed by the
petitioner including the component of refund sought for by it.
6. That apart, learned Government Advocate seeks to distinguish the
decision of R.K.Knits (supra) relying on the judgement of the Hon'ble
Supreme Court in the case of ALD Automotive Pvt. Ltd. Vs. The
Commercial Tax Officer and Ors. [2018 (70) GST 751 (S.C.)], wherein the
provisions of Section 19(11) of the TNVAT Act was challenged. Section
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W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
19(11) states as follows:
“Section 19 – Input Tax Credit -
(11) In case any registered dealer fails to claim input tax credit
in respect of any transaction of taxable purchase in any month,
he shall make the claim before the end of the financial year or
before ninety days from the date of purchase, whichever is
later.”
7. In the context of the provision as above, the Hon'ble Court held
that the timeline for claim of ITC was mandatory and sacrosanct and there
was no indication in the Statute for extension of time. It was thus mandatory
and a pre-condition for consideration of the claim for utilisation of ITC.
8. They also noticed the earlier judgment in the case of Jayam and
Co. Vs. Assistant Commissioner and Another [2016 (15) SCC 125], wherein
the provisions of Sections 19(20), 3(2) and 3(3) of the Act had been
challenged. In Jayam and Co., the proposition that was settled was that ITC
could not be claimed as a matter of right as it was, but a concession
extended to the Assessee by the State.
9.The Act provides for the set of ITC as against output tax. Section
19(11) grants a benefit to the assessee stating that if an assessee has failed to
set-off ITC in respect of output tax liability in any month, then, he shall
have the benefit of an extended time limit for such claim, that is, before the
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W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
end of financial year or before 90 days from the date of purchase, whichever
was later, to make such claim.
10.The above claim, once made, would have an impact on the
quantification of turnover itself and cannot be equated to a claim for refund.
One of the submissions of the assessee in the cases of ALD Automotive and
Jayam and Co. was that they had accumulated ITC and had a substantive
right to set the same off as against output tax liability. The aforesaid
argument was rejected by the Court holding that the availment of ITC
cannot be claimed as a vested right.
11. Assessees are granted the benefit of ITC as a set-off against
liability and such claim would have a substantial impact upon the
computation of tax liability. It was thus necessary for an assessee to exercise
this right within the time granted by statute. In the event the timeline had
been missed, a further extension of time was granted under Section 19(11).
An assessee who misses even the extended timeline had indeed missed the
benefit of ITC availment and the returns of the assessee as filed, would be
taken to be final.
12. In my considered view, the ratio of the aforesaid two judgements
would not be applicable in this case. We are not concerned in this case with
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W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
a claim for utilisation of ITC for adjustment as against output tax liability,
but a refund of accumulated ITC. The entitlement of the petitioner to ITC is
undisputed. The fact that the petitioner has claimed the benefit of Section 16
relating to zero rated sales is also undisputed.
13.In such circumstances, the strict application of the timelines under
the Act will not, in my considered view, be applicable, particularly, in a
situation where the assessee concerned, is otherwise entitled in law, to the
same. The filing of the form claiming refund cannot be equated to
claim of ITC itself which would have an impact on the quantification of
turnover itself. Thus, and for the reasons set out in the preceding
paragraphs, the reliance placed by revenue upon the case of ALD
Automotive Pvt. Ltd. does not further its case in the present matter.
14.Learned Government Advocate would submit that the case of
R.K.Knits (supra) is pending in appeal before the Division Bench. However,
seeing that there is no stay as on date, I would subscribe to the same view,
and conclude that the petitioner’s claim for refund is liable to be accepted.
15. In light of the discussion as above, this Writ Petition is allowed.
Let the refund paid over expeditiously and in any event within a period of
four (4) weeks from the date of issue of this order. No costs. Consequently,
https://www.mhc.tn.gov.in/judis
W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
connected Miscellaneous Petition is closed.
kbs 30.06.2022
Index : Yes/No
Speaking Order/Non speaking Order
To
The Assistant Commissioner (ST),
Veperi Assessment Circle,
No.10, Greams Road,
Chennai – 600 006.
https://www.mhc.tn.gov.in/judis
W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
DR.ANITA SUMANTH, J.
kbs
W.P.No.12762 of 2019 &
WMP.No.12977 of 2019
30.06.2022
https://www.mhc.tn.gov.in/judis
