The High Court dismissed the petitioner's revision petition, upholding the Tribunal's refusal to grant input tax credit for manufacturer incentives due to the absence of credit notes in the prescribed Form No.9 and failure to revise returns under the Act.
The revision petition was dismissed, leaving the parties to pay their respective costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN &
THE HONOURABLE MR. JUSTICE ASHOK MENON
TUESDAY, THE 3RD DAY OF JULY 2018 / 12TH ASHADHA, 1940
AGAINST THE ORDER/JUDGMENT IN TAVAT 619/2013 of KERALA VALUE ADDED TAX APPELLATE TRIBUNAL,ADDL.BENCH,PKD DATED 31-03-2015
REVISION PETITIONER(S)/APPELLANT/APPELLANT/ASSESSEE
V.V.SHAMEER PROPRIETOR, NCV AGENCIES, PATTITHARA PANCHAYATH, P.ANGADI P.O., PALAKKAD.
BY ADVS.SRI.N.MURALEEDHARAN NAIR SRI.V.K.SHAMUSUDHEEN
RESPONDENT(S)/RESPONDENT/RESPONDENT/STATE:
STATE OF KERALA
BY SRI.MOHAMMED RAFIQ, SR.GOVERNMENT PLEADER
THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 03-07-2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
OT REV.168/2015
APPENDIX
PETITIONER'S EXHIBITS
ANNEXURE-A : COPY OF THE ASSESSMENT ORDER PASSED BY COMMERCIAL TAX OFFICER, PATTAMBI FOR THE ASSESSMENT YEAR 2008-09 DATED 29.9.2010. ANNEXURE-B : COPY OF 1ST APPELLATE ORDER PASSED BY ASSISTANT COMMISSIONER (APPEALS) O/O OF THE DEPUTY COMMISSIONER (APPEALS), DEPARTMENT OF COMMERCIAL TAXES, PALAKKAD FOR THE YEAR 2008-09 DATED 30.06.2011. ANNEXURE-C : COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE APPELLATE TRIBUNAL DATED 16.01.2012. ANNEXURE-D : COPY OF ARGUMENT NOTE FILED BEFORE THE APPELLATE TRIBUNAL DATED 05.11.2014. ANNEXURE-E : COPY OF TRIBUNAL ORDER PASSED BY KERALA VALUE ADDED TAX ADDITIONAL APPELLATE TRIBUNAL, PALAKKAD IN TAVAT NO.619/2013 DATED 31.3.2015. ANNEXURE-F : COPY OF LEDGER FOLIO FROM 1.4.2008 TO 31.3.2009. ANNEXURE-G : COPY OF TRADING AND PROFIT AND LOSS ACCOUNT. ANNEXURE-H : COPY OF DECLARATION DATED 21.7.2010. //TRUE COPY// PS TO JUDGE. jg-9/7
K.VINOD CHANDRAN & ASHOK MENON, JJ.
O.T.Rev.No.168 of 2015
Dated this the 3rd day of July, 2018
O R D E R
Vinod Chandran, J.
The petitioner/assessee aggrieved by the order of the Kerala Value Added Tax Appellate Tribunal, refusing input tax credit to the extent the assessee received incentives from its manufacturer, is before us raising the following questions of law as framed in the memorandum of revision:
“(1) Whether on the facts and in the circumstances of the case the order of the Appellate Tribunal is sustainable under law?
(2) Whether on the facts and in the circumstances of the case the Appellate Tribunal was correct in law in confirming the dis-allowance of the discount despite filing of credit notes and declaration as per circular NO.41/2007 issued by the supplier company?
(3) Whether on the facts and in the circumstances of the case the Appellate Tribunal was correct in law in holding that the circular instructions contained in 41/2007 are not applicable to dealers like the petitioner?
(4) Whether on the facts and in the circumstances of the case the Appellate Tribunal was correct in law in upholding the finding of the authorities below that the
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petitioner had not accounted the turnover in question especially when the same are contained in the books of accounts and documents produced by the petitioner?”
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incentive received was with respect to the schemes floated by the manufacturer for achieving sales targets and also for meeting the distribution expenses. Credit notes were filed, but not in Form No.9 as prescribed under the Kerala Value Added Tax Act, 2003 ('Act', for short). The AO found that the details as available in form No.9 is not seen in the credit note filed by the assessee before the AO. The AO also did not refer to any declaration having been filed by the assessee of the manufacturer.
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Officer] , the assessee is entitled to the entire input tax credit.
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allowance of any input tax credit with respect to a discount granted after the tax is paid on the turnover. Subsequently, a circular was issued as Circular No.41/2007 wherein such input tax credit was permissible, when there is reimbursement of expenses made by way of credit notes and there is a declaration as to no output tax deduction having been claimed by the manufacturer. This circular was applicable only to cement dealers. But this Court in Priya Agencies (supra) found that the Circular being confined to cement dealers is not proper and it should be extended to all dealers. Hence, there was an amendment made to the fifth proviso bringing in such condition of credit notes being made available along with the declaration of no output tax deduction having been claimed.
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credit note under the Act is exclusively for the purpose of return of goods. A reading of the form and the various details enumerated therein would also indicate that, the form would take in all instances where a credit note is issued, based on which a claim is raised by an assessee.
The question of law with respect to circular No.41/2007 would not arise since the assessee had not made a claim with the prescribed form. Though the amounts were disclosed in the books of accounts, discrepancy was noticed in the audit statement and the
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petitioner did not attempt a revised return under Section 42 of the Act. In such circumstances, we are of the opinion that the questions of law raised are to be answered against the assessee and in favour of the Revenue. We dismiss the revision leaving the parties to suffer their respective costs.
Sd/-
K.VINOD CHANDRAN JUDGE
Sd/-
ASHOK MENON JUDGE
jg
3 issues framed by the court
Whether input tax credit is admissible for incentives received from a manufacturer when credit notes are not issued in the prescribed Form No.9.
Whether the Appellate Tribunal was correct in confirming the dis-allowance of input tax credit despite the filing of un-prescribed credit notes and declarations.
Whether the Circular No.41/2007 permitting input tax credit on discounted items applies to dealers other than cement dealers.
Colour shows how this judgement treated each authority
Priya Agencies v. Commercial Tax OfficerExplained¶36
(2008) 16 KTR 287 (Ker)
5 provisions across 3 enactments
V.V.Shameer
State of Kerala
K.Vinod Chandran
Ashok Menon
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
K.Vinod Chandran and Ashok Menon
Parties & counsel
