Apurva N. Mehta,  Advocate

Legitimate claim of input tax credit allowable even though not claimed in periodic as well as annual returns

In a recent decision dated 08.10.2014, rendered in the case of M/s. Mahavir Traders v/s the State of Gujarat, the Gujarat Value Added Tax Tribunal has held that revision of assessment order solely at the behest of A. G. Audit objections is not sustainable. While striking down the revision order, the Tribunal held as under :

Para 9. ……… Even the legal submissions made by Mr. Mehta also support the case of the applicant. The revisional proceedings were initiated on the basis of AG Audit party. The learned Deputy Commissioner was not in agreement with the proposal made by audit proceedings. He has, therefore, recommended to drop the proceedings vide his communication dated 26/6/13. The learned Deputy Commissioner was however compelled to pass the revisional order at the behest of AG Audit party and the same is not permissible as per the settled legal position discussed as above. Even on this ground, the revisional order passed by the learned Deputy Commissioner deserves to be set aside. ….. ”

The claim of input tax credit not made in periodic / annual returns but supported through vat audit report was also allowed by the Tribunal holding as under :

“ Para 9. We have considered rival submissions and the facts of the case, we have also gone through the orders passed by the learned Deputy Commissioner as well as the documents produced on record. We find sufficient force in the arguments and submissions made by Mr. Mehta. There is no denial of the fact that the applicant has made the purchases of disputed goods from BSL Coke Pvt. Ltd. These purchases were left out through oversight in the returns filed for the period Feb ‘ 2006 as well as in the annual return. However in the audit report submitted by the chartered accountant these details were duly included. The vendor has shown its sale in its returns and the tax collected from the applicant was also paid. The relevant documents of the vendors are also placed on record. Because of the mistake committed by the applicant, no revenue loss is caused to the State Exchequer.

The applicant therefore deserves to be succeeded on merits.

(Source- M/s. Mahavir Traders v/s the State of Gujarat (Gujarat Value Added Tax Tribunal ), Revisional Application No. 124 of 2013. Date- 08.10.2014)

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October 2020