Neha Enterprises Vs Commissioner (Supreme Court of India)
Supreme Court held that as per section 13(7) of the Uttar Pradesh Value Added Tax Act, 2008 [UP VAT Act], input tax credit will not be allowed to a dealer with respect to the purchase of any goods where the sale of such goods by the dealer is exempt from tax under Section 7(c) of the Act.
Facts- The appellant is a registered dealer under the Uttar Pradesh Value Added Tax Act, 2008. The subject matter of the appeal relates to the turnover returns filed by the dealer for the assessment year 2010-11. The dealer recorded sales against the issuance of Form-E to the manufacturer-exporter, amounting to Rs. 1,89,35,100/-. The dealer claimed an input tax credit amounting to Rs. 6,42,260/-. The assessing officer, at the first instance, allowed input tax to the extent of Rs. 6,42,260/-. Subsequently, the assessing officer vide order dated 22.02.2013 made u/s. 28 of the Act disallowed the claim of an input tax credit of Rs. 6,42,260/-. In the instant appeal, we are concerned with the disallowance of the input tax credit claimed by the dealer.
Conclusion- Held that section 13(7) outlines the circumstances under which such a benefit cannot be allowed. Section 13(7) also sets out that no facility for input tax credit shall be allowed to a dealer with respect to the purchase of any goods where the sale of such goods by the dealer is exempt from tax under Section 7(c) of the Act. The prohibition from allowing input tax credit is a statutory mandate, and the view taken by the orders impugned, in the facts and circumstances of this case, is available and correct. In the teeth of clear expression in section 13(7) of the Act, we find it difficult to give effect to the intent or policy made known through notifications to grant input tax credit. The dealer availing section 7(c) of the Act knows the extent to which the input tax credit could be claimed. Hence, the Civil Appeal fails, and is accordingly dismissed.
