Case Law Details
Tvl. M. R. Motor Company Vs Assistant Commissioner (CT), (FAC) (Madras High Court)
The issue under consideration that whether the Department was justified in disallowing the refund of claim on the ground that the petitioner was still in business and was adjusting the amount regularly?
The petitioner is a dealer of Motor Vehicles who had claimed a refund of excess Input Tax Credit and requested the respondent to refund a sum being accumulated as Input Tax Credit. The respondent has rejected the refund by giving reason that the petitioner have carried forwarded the closing balance of the Input Tax Credit Accumulation to next year as opening balance and adjusted against the output tax liability of next year.
As per Rule 10, where the Input Tax Credit determined by the Assessing Authority exceeds the tax liability for that year, a dealer may just the excess Input Tax Credit against any tax arrears or any other amount due. “Any other amount due” can be adjusted towards any tax arrears only. Hence, if after such adjustment there was still excess of Input Tax Credit, an Assessing Authority was bound to serve a notice in Form P to the dealer . Form P is the prescribed format for refund of excess Input Tax Credit to a dealer after such adjustment.
HC are of the view that denial of benefit of the notification to the appellant was unfair. There can be no doubt that the authorities functioning under the Act must, as are in duty bound, protect the interest of the Revenue by levying and collecting the duty in accordance with law — no less and also no more. It is no part of their duty to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue. They must act reasonably and fairly. Therefore, The order passed by the respondent cannot be sustained.
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