Case Law Details
Flow Link Systems Pvt. Ltd. Vs Assistant Commissioner (ST)(FAC) (Madras High Court)
Detailed Analysis: Flow Link Systems Pvt. Ltd., a manufacturer and exporter of steel casting and industrial valves, sought a refund of unutilised Input Tax Credit (ITC) under the TNVAT Act. The petitioner claimed ITC on capital goods for its zero-rated exports. However, the refund was rejected based on Circular No.22 of 2011, which was later superseded by Circular No.12 of 2018, allowing such refunds.
The court noted that the petitioner made refund claims within the 180-day limit specified in Section 18(3) of the TNVAT Act. The rejection was primarily due to Circular No.22, preventing the processing of ITC claims on capital goods. The court ruled that the limitation period should be reckoned from the date of Circular No.12.
While setting aside the impugned order, the court emphasized that the refund claim must be re-examined based on documents related to ITC and zero-rated exports. However, the court clarified that the assessing officer should not consider the issue of limitation and must decide on the refund within two months.
Conclusion: The Madras High Court’s decision in favor of Flow Link Systems Pvt. Ltd. underscores the importance of considering revised circulars and timely processing of refund claims. The ruling ensures a fair examination of the refund claim based on merit, offering relief to the petitioner.
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