Hillwood Furniture Pvt Ltd Vs Assistant Commissioner (Kerala High Court)
In a significant judgment, the Kerala High Court addressed the issue of advance tax credit on stock-transferred goods in the case of Hillwood Furniture Pvt Ltd Vs Assistant Commissioner. The petitioner, Hillwood Furniture Pvt Ltd, challenged the restriction on credit for advance tax paid under Circular No. 50/2006, which was limited to amounts in excess of 4%. This ruling highlights crucial interpretations of the Kerala Value Added Tax Act, 2003 (KVAT Act), and provides clarity on the treatment of advance tax in stock-transfer scenarios.
Background of the Case
Hillwood Furniture Pvt Ltd, a registered dealer under the KVAT Act and the Central Sales Tax Act, 1956, imports and sells Pincoda Timber. The timber is imported through ports in Tuticorin, Mangalore, or Kochi and then transported to either their branch in Pollachi or head office in Feroke based on requirements. During the fiscal year 2009-2010, the company stock-transferred timber worth ₹39,24,347 from Feroke to Pollachi.
The dispute arose when the Assistant Commissioner restricted the credit of advance tax paid to amounts exceeding 4% of the tax under Circular No. 50/2006. Hillwood Furniture challenged this restriction, arguing that the entire advance tax paid should be eligible for credit, not just the amount exceeding 4%.
