State of Karnataka Vs Tractor And Farm Equipment Limited (Karnataka High Court)
Karnataka High Court held that during re-assessment proceedings, claim for Input Tax Credit can be rectified under section 39 of the Karnataka Value Added Tax Act, 2003, even when the same is disadvantageous to the State Exchequer.
Facts- State has preferred these Revision Petitions for assailing the Appellate Tribunal’s orders whereby, respondent-Assessee’s appeals having been favoured, he has been granted deduction of Input Tax Credit at the rate admissible in law although what was claimed in the Returns filed by him, was less than that.
Conclusion- Held that ordinarily, the claim for Input Tax Credit has to be made in the Return or Revised Return only. A claim otherwise is an exception and bona fide of the same has to be demonstrated. However, when underclaim is made in the Return/Revised Return due to bona fide mistake of adopting inapplicable rates of tax only, it is permissible to seek rectification by making a representation provided that the foundational fact matrix is already available in the Return/Revised Return.
Held that if the Assessee during the course of re- assessment proceedings makes a claim for Input Tax Credit, the same cannot be disallowed only on the ground that the claim of the Assessee is disadvantageous to the State Exchequer.
