SBW Udoyg Ltd. Vs Commissioner Commercial Tax (Allahabad High Court)
Conclusion: Once the lubricant became a taxable item at the hands of the manufacturer and importer, it became non-VATable good for the trader, therefore, ITC in relation to lubricants was required to be reversed.
Held: Revisionist carried on the business of manufacture and sale of bidi, pocket cooked foods, tea, cold-drinks, imported matchbox, etc. as well as purchase and sale of lubricants, dry-fruits, khowa, etc. The dispute in the present case only related to reversal of Input Tax Credit on lubricant. He further submitted that in view of the notification dated 10.01.2014, lubricant was classified as VAT goods in the hand of manufacturer or importer. Department claimed that ITC in relation to lubricants was required to be reversed and therefore, it coerced the applicant into depositing an additional amount of Rs. 29,81,445/-, which was deposited under protest. Thereafter, the assessment order was passed on 30.01.2016 reversing the amount of Rs. 29,81,445/- from the total ITC earned. Against the assessment order, the applicant preferred an appeal, which was allowed recording a finding that the ITC in relation to lubricants could not be reversed. The case was remanded with a direction for the purpose of calculation of ITC, which should not have been reversed. AO did not comply with the direction given in the order of the Appellate Authority but AO on the basis of the circular of the Commissioner dated 20.01.2014, redetermined the question about the reversal of ITC on closing stock of lubricants, when this issue had already been settled in the remand order. Aggrieved by the said order, the applicant preferred an appeal, which was dismissed. Applicant challenged the order by preferring second appeal before the Commercial Tax Tribunal, which had also been dismissed vide impugned order dated 21.07.2022. Hence, this revision. It was held that once the lubricant became taxable item at the hand of the manufacturer and importer and for the trader it become non VAT able goods, and once the item was declared as non VAT goods in the hand of the trader as revisionist was also a trader, the judgements cited for the revisionist in M/s Kumar Motors, Bareilly, M/s Mercury Laboratories Pvt. Ltd., M/s Goodage Rubber Works and Indra Industries that the circular would influence the same, would be of no help to the revisionist. Further, the record showed that the revisionist, in its wisdom, had not challenged the validity of the circular dated 17.01.2014 before any competent court. Under the revisional jurisdiction, the validity of the circular could not be tested. In view of the aforesaid facts & circumstances of the case, no interference was called for by this Court in the impugned order.
