MAIN POINTS
Laws relating to economic activities should be viewed with greater latitude.
A provision in the statute has to read along with other related provisions, and not in isolation.
Section 19 is not inconsistent with section 3.
Scheme of Section 19(11) is neither arbitrary nor it violates the right guaranteed to dealer under Article 19(1)(g), Constitution of India.
Time period as provided in Section 19(11) is mandatory.
Assessing authority could not have extended the time for filing ITC claim.

Headnote:(a) Interpretation of statute – Fiscal statute – Laws relating to economic activities should be viewed with greater latitude – A provision in the statute has to read along with other related provisions, and not in isolation – More particularly when different sections or parts of the same statute deal with same subject. (Para 17, 18)
       (1981) 4 SCC 675; (2002) 2 SCC 678 – Relied upon
       (b) Tamil Nadu Value Added Tax Act, 2006 – Section 19(11) – Validity – Input Tax credit (ITC) – Section 3(3) entitling a registered dealer to obtain a tax credit as explained in Section 19 – What is envisaged in Section 3(3) is amplified and explained in Section 19 – Reduction in tax contemplated in Section 3(3) has to be in manner as provided in Section 19 – Section 19(11) contains a condition for claiming the input tax credit – Held, Section 19 is not inconsistent with section 3. (Para 22)
       (c) Tamil Nadu Value Added Tax Act, 2006 – Section 19(11) – Taxing statute are to be interpreted literally and legislature is free to decide as to how much tax credit is to be given under what circumstances – However, to avail a concession, conditions thereof are to be strictly complied with – Held, scheme of Section 19(11) is neither arbitrary nor it violates the right guaranteed to dealer under Article 19(1)(g), Constitution of India. (Para 35, 36, 37)
       (1992) 3 SCC 624; (2005) 2 SCC 129; (2017) 16 SCC 210; (2016) 15 SCC 125 – Relied upon
       (1986) 4 SCC 667 – Referred
       AIR 1967 SC 1823; (2007) 4 SCC 51 – Distinguished
       (d) Tamil Nadu Value Added Tax Act, 2006 – Section 19(11) r/w Rule 7 – Nature of section 19(11) – Mandatory or directory – Depends on its object – Rule 7 contemplates filing of return before 20th of succeeding month – Section 19(11) allowing an extended period to before the end of financial year or before 90 days from the date of purchase, whichever is later – Use of “shall” – Held, time period as provided in Section 19(11) is mandatory. (Para 40, 42)
       (1984) 2 SCC 486 – Relied upon
       (d) Tamil Nadu Value Added Tax Act, 2006 – Section 19(11) – Not providing for extension of time – Held, Assessing authority could not have extended the time for filing ITC claim. (Para 46)
       (1986) 4 SCC 667 – Distinguished
       Facts of the case:
       In the returns filed on 06.10.2008, the appellant claimed Input Tax Credit of Rs.42,04,628/-. The Commercial Tax Officer rejected the Input Tax Credit claimed by the appellant in the month of March, 2008.
       The Division Bench of the Madras High Court by the impugned judgment upheld the validity of Section 19(11) of the Tamil Nadu VAT Act, 2006 and upheld the orders passed by the respondents denying the benefit of Input Tax Credit.
       Finding of the Court:
       Section 19 is not inconsistent with section 3.
       Scheme of Section 19(11) is neither arbitrary nor it violates the right guaranteed to dealer under Article 19(1)(g), Constitution of India.
       Time period as provided in Section 19(11) is mandatory.
       Result: Appeals dismissed.

JUDGMENT :

Ashok Bhushan, J.

Delay condoned. Leave granted.

2. All these appeals have been filed against common judgment dated 17.07.2013 of Madras High Court dismissing a bunch of writ petitions filed by the appellants. The main challenge in the writ petitions was provision of Section 19(11) of Tamil Nadu Value Added Tax Act, 2006 (hereinafter referred to as the “Tamil Nadu VAT Act, 2006”). For appreciating the issues raised in this batch of appeals it is sufficient to notice the facts in Civil Appeal Nos. 10412-10413 of 2018 arising out of SLP(C)Nos. 36112-36113 of 2013 (ALD Automotive Pvt. Ltd. vs. The Commercial Tax Officer and others).

3. The appellant Company is a registered dealer under Tamil Nadu VAT Act, 2006. The appellant Company is engaged in the business of leasing and fleet management of the motor vehicles and resale of used motor vehicles. The head office of the Company is at Mumbai. The head office of the appellant negotiates the purchase price with the local registered dealers in Tamil Nadu and issues the purchase order to the dealer along with the payment including the tax payable under the Tamil Nadu VAT Act, 2006. The registered dealer raises the tax invoice as and when the motor vehicle is ready for delivery to the appellant. The date of purchase for the vehicle in the books of the appellant is same as the date of delivery. The tax invoices of such purchases are received after a considerable delay as the original documents are sent to the Regional Transport Authority for registration of motor vehicles. The appellant enters the details of the tax invoice containing the payment of tax in its books of accounts. The appellant had outsourced the job of collection of original tax invoices to one M/s. MID Controls Private Limited, an Agency specialised for collecting documents. The appellant is entitled to claim Input Tax Credit of the amount of tax paid on the purchases made from the registered dealer of motor vehicle as per Section 19(2) of the Tamil Nadu VAT Act, 2006. As per Section 19(11), if a dealer has not claimed Input Tax Credit for a particular month, the dealer can claim the Input Tax Credit before the end of the financial year or before 90 days from the date of purchase whichever is later. When the appellant filed its returns for the assessment year 2007-2008 for want of the tax invoices, the said Input Tax Credit could not be claimed. The appellant, however, filed revised returns claiming Input Tax Credit on the receipt of the tax invoices from the dealer. The appellant also filed its monthly returns for the period from April, 2007 to February, 2008. The appellant had filed a monthly return for the month of March, 2008 on 06.10.2008. There was delay in filing return. Due to late receipt of original purchase invoices, the appellant revised its returns for the period from March, 2008 to January, 2009 in the month of March, 2009.

4. In the returns filed on 06.10.2008, the appellant claimed Input Tax Credit of Rs.42,04,628/-. By order dated 21.11.2008, the Commercial Tax Officer rejected the Input Tax Credit claimed by the appellant in the month of March, 2008. On a writ petition filed by the appellant being Writ Petition(C) No.18137 of 2009, the High Court set aside the order confirming the proposal to disallow the Input Tax Credit and directed the Commercial Tax Officer to pass appropriate orders in accordance with law. Notice was issued proposing to reject the appellant's revised returns which was objected. In the objections, the appellant stated that the delay in getting the original tax invoices was only due to the fact that the Original Tax Invoices were received belatedly from the registered dealers. Notice dated 01.06.2009 was issued confirming the notice and rejecting the appellant's objections by treating the entire amount of Input Tax Credit of Rs.1,28,36,822/- as not admissible for the assessment year 2008-2009 taking the view that it was a belated claim. The appellant filed writ petition. In the

Click Here to Read the rest of this document

2018 Supreme(SC) 1011

Cases Referred (10)