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IN THE HIGH COURT OF ALLAHABAD
PIYUSH AGRAWAL, J.
The Commissioner, Commercial Tax, Up Lucknow – Appellant
Versus
S/S Janki Industries Nai Basti, Bareilly – Respondent
SALES/TRADE TAX REVISION No. - 10 of 2025, SALES/TRADE TAX REVISION No. – 142, 143, 144, 145, 146, 147, 149, of 2024
Decided on : 24-03-2025
| Table of Content |
|---|
| 1. the court heard arguments from both parties. (Para 1 , 2) |
| 2. the revision challenges the tribunal's decision on itc claims. (Para 3 , 4) |
| 3. arguments presented regarding the discontinuation of business and itc claims. (Para 5 , 6 , 7 , 8 , 9) |
| 4. opposing counsel argues for the entitlement of itc despite business discontinuation. (Para 10 , 11 , 12 , 14) |
| 5. state counsel rebuts the arguments and cites previous case law. (Para 16 , 17 , 18) |
| 6. court analyzes the legal implications of vat act provisions on itc. (Para 20 , 21 , 22 , 23) |
| 7. conditions for refund of itc upon business discontinuation are outlined. (Para 24 , 25 , 26) |
| 8. court references prior case law regarding discontinuation and itc. (Para 27 , 28 , 29) |
| 9. court distinguishes between relevant case law and its applicability. (Para 30 , 31 , 32) |
| 10. court asserts the importance of following legal precedents in the decision. (Para 33 , 34 , 35 , 36) |
| 11. court emphasizes compliance with vat act provisions for itc. (Para 37 , 38 , 39 , 40) |
| 12. court concludes that the tribunal's decision cannot be upheld. (Para 41 , 42) |
| 13. final ruling issued in favor of the revenue. (Para 43 , 44 , 45) |
1. Heard Shri Bipin Kumar Pandey, learned Additional Chief Standing Counsel for the State, Shri Rishi Raj Kapoor, Shri Suyash Agarwal and Ms. Tanisha Jahangir Monir, learned counsel for the opposite party.
2. Since the issues involved in these connected revisions are similar, therefore, the same are being decided by the common order with the consent of the learned counsel for the parties. Sales/Trade Tax Revision No. 10 of 2025 is taken as a leading case for deciding the controversy involved in these revisions.
SALES/TRADE TAX REVISION No. - 10 of 2025:
3. The present revision has been filed against the judgement & order dated 27.11.2024 passed by the Commercial Tax Tribunal, Bareilly Division, Bareilly in Second Appeal No. 211 of 2022 for the Assessment Year 2017-18 under section 28(2)(ii) of the VAT Act.
4. The aforesaid revision was admitted by this Court vide order dated 27.01.2025 on the following questions of law:-
“1. Whether on the facts and circumstances of the case the Commercial Tax Tribunal was legally justified in holding that the dealer is entitled for the benefit of I.T.C. As claimed under the provisions of U.P. Value Added Tax Act read with the corresponding provisions of Section 16 as well as Section 140(1) of the GST Act read with Rule 21(1)(y) of the Value Added Tax Rules?
2. Whether on the facts and circumstances of the case the Commercial Tax Tribunal was legally justified in allowing the benefit of I.T.C. to the dealer when the business has been discontinued by the dealer on 30.06.2017?”
5. Learned ACSC submits that the opposite party is a dealer carrying on the business of purchase and sale of food-grains, pulses, oil- seeds, etc. In the assessment year in dispute, i.e., 2017-18, the opposite party had declared the closing stock on 30.06.2017 and ITC of Rs. 4,65,822/- was claimed. The Assessing Authority, vide order dated 11.02.2021, reversed the Input Tax Credit (in short, 'ITC'). Feeling aggrieved by the order dated 11.02.2021, the opposite party preferred an appeal before the first appellate authority, which was rejected vide order dated 12.09.2022. Still feeling aggrieved, the opposite party preferred second appeal before the Commercial Tax Tribunal, which has been allowed vide impugned judgement & order dated 27.11.2024. Hence, this revision.
6. He further submits that new the Uttar Pradesh Goods & Service Tax Act, 2017 (hereinafter referred to as, 'the GST Act') came into force on 01.07.2017. Since the Uttar Pradesh Value Added Tax Act, 2008 (hereinafter referred to as, 'the VAT Act') had the life upto 30.06.2017, any registered dealers, who was having registration under the erstwhile VAT Act come to end with effect from 30.06.2017. In order words, all the registered dealers discontinued their business under the VAT Act on 30.06.2017. Once the registered deale
A registered dealer under the VAT Act is deemed to have discontinued business upon the introduction of the GST Act, requiring the reversal of unutilized ITC as per the Act's provisions.
The UP VAT Act permits input tax credit for both taxable goods and by-products, emphasizing strict interpretation of tax statutes and legislative intent.
The balance of unutilized input tax credit remaining in an electronic ledger upon the permanent closure of a business is refundable, as the law does not expressly prohibit such claims, and the state ....
Refund of unutilized input tax credit is a strictly statutory right confined to specific situations prescribed by law. It cannot be granted upon business closure unless explicitly enumerated by the l....
Input tax credit claims require proof of actual tax payment by the supplier; failure to demonstrate this results in denial of credit.
The main legal point established in the judgment is that the dealers are entitled to Input Tax Credit on evaporation/handling losses of the petroleum products under the provisions of the Haryana Valu....
Purchasing dealers claiming ITC must prove genuine transactions and actual physical movement beyond invoices or payment details under Section 70 of KVAT Act, 2003.
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