The central legal point established in the judgment is the absolute right of manufacturers to avail Input Tax Credit (ITC) under Section 19(2)(v) of the Tamil Nadu Value Added Tax Act, 2006, and the retrospective curative nature of the amendment to Section 19(2) brought about in the year 2015.

JUDGMENT

(Prayer: Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari, calling for the records on the files of the respondent herein, in TIN/33781661709/2013-14 dated 27.08.2015.)

1. The petitioner has challenged an order of assessment passed in terms of the Tamil Nadu Value Added Tax Act, 2006 (in short 'Act') for the period 2013-14 dated 27.08.2015 and was disposed by a learned single Judge of this Court on 14.12.2017 following the ratio laid down in a batch of Writ Petitions in the case of The State of Tamil Nadu represented by its Secretary, Commercial Taxes Department, The Deputy Commissioner (CT) (FAC) V. M/s.Everest Industries Limited (2022(4) TMI 1204) touching upon the reversal of Input Tax Credit (ITC) in terms of Section 19(2)(v) of the Act.

2. As against the aforesaid decision, the State has filed Writ Appeals in all cases. In W.A.No.1654 of 2017 pertaining to this petitioner, an order has been passed by a Division Bench of this Court on 12.03.2018 remanding the matter to the file of the learned single Judge.

3. It is relevant to note that the larger batch of matters touching upon the reversal of ITC in terms of Section 19(2)(v) have come to be decided in favour of the assessee in W.A.No.1260 of 2017 dated 31.03.2022. Inter alia, at paragraph 139, the Division Bench has specifically stated that ITC in terms of Section 19(2)(v) is not liable to be reversed in the case of a 'manufacturer' and paragraph 139 reads as follows:

“........

139. In the present case, the mischief is two in numbers. Firstly, the one identified by the State and the other, the counter mischief occasioned by their curative action and implementation of the proviso by the department. The end result is that the legislature decided to restore the original position with respect to Section 19 (2) (v) by omitting and substituting with a new provision to remove the mischief caused by wrongful implementation. The actual intention of the legislature is to be derived only by interpretation of the provision to find out its actual applicability and decide whether it is curative or substantative. As already seen, the original provision along with the proviso was omitted and a new provision was substituted. The word “retrospective” would mean “to look back” or “to go back in time”. A curative provision is held to be effective from a date prior to which it was enacted and so, will have a retrospective effect. As evident from the correct statement of objects and reasons and also from the contention of the Department that the amendment was brought in only to cure the defect and when it caused adverse effects, the same was withdrawn and substituted with a new provision, the time in that case is reversed. The amendments restore the benefit to all the dealers effecting interstate sale. As rightly pointed out by the counsel for the respondents, the subsequent amendment is in the form of “Declaration” reiterating that the provision is to be read as it stood before the 2013 amendment. Upon consideration of the materials placed before us and for the reasons stated above, the amendment to Section 19(2) brought about in the year 2015 is held to be curative in nature. Though we disagree with the reasoning of the learned Judge as to the interpretation placed on the scope of amendment to Section 19(2) vide Act 28 of 2013, in the light of the finding that Amendment Act 5 of 2015 is curative / declaratory in nature and would thus relate back to 11.11.2013, resultantly, the position insofar as the right of the manufacturers to avail ITC is, it becomes an absolute right, once the inputs are used in the manufacture or processing of the goods within the State, the subsequent event of the manufactured goods being sold by way of iner-state / intra-state sale would have no bearing nor does it result in imposing any limitation/restriction or whittle down the right to ITC earned in terms of Section 19(2)(ii) or 19(2)(v) of the TNVAT Act i