Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 1041210413 OF 2018
(ARISING OUT OF SLP(C)NOS.3611236113 OF 2013)
ALD AUTOMOTIVE PVT. LTD. ... APPELLANT
VERSUS
THE COMMERCIAL TAX OFFICER
NOW UPGRADED AS THE ASSISTANT
COMMISSIONER (CT) & ORS. ... RESPONDENTS
WITH
Civil Appeal Nos. 1041410450 of 2018 @ SLP(C)
NOS.3659036626 OF 2013, Civil Appeal Nos. 1045110455
of 2018 @ SLP(C)NOS.24742478 OF 2014, Civil Appeal
Nos. 1049810499 of 2018 @ SLP(C)NOS.1006010061 OF
2014, Civil Appeal Nos. 1045610481 of 2018 @ SLP(C)
Nos. 36753700 of 2014, Civil Appeal Nos.1048210497
of 2018 @ SLP(C) NOS.37023717 OF 2014, Civil Appeal
Nos. 1050910513 of 2018 @ SLP(C)NOS.1131311317 OF
2014, Civil Appeal Nos. 1050310507 of 2018 @
SLP(C)NOS.1131911323 OF 2014, Civil Appeal No. 10523
of 2018 @ SLP(C)NO.13961 OF 2014, Civil Appeal Nos.
1052510527 of 2018 @ SLP(C)NOS. 1320413206 OF 2014,
Civil Appeal No. 10544 of 2018 @ SLP(C)NO.30638 OF
Signature Not Verified
Digitally signed by
SUSHIL KUMAR
RAKHEJA
Date: 2019.01.22
18:15:29 IST
Reason:
2014, Civil Appeal No. 10522 of 2018 @ SLP(C)NO.13960
OF 2014, Civil Appeal No. 10524 of 2018 @ SLP(C)NO.
2
12779 OF 2014, Civil Appeal Nos. 1051910521 of 2018 @
SLP(C)NOS.1217512177 OF 2014, Civil Appeal Nos.
1050010502 of 2018 @ SLP(C)NOS.1050610508 OF 2014,
Civil Appeal No. 10508 of 2018 @ SLP (C) NO. 11324 OF
2014, Civil Appeal Nos. 1051610518 of 2018 @
SLP(C)NOS.1216312165 OF 2014, Civil Appeal No. 10543
of 2018 @ SLP(C)NO.30637 OF 2014, Civil Appeal Nos.
1051410515 of 2018 @ SLP(C) NOS.1219212193 OF 2014,
Civil Appeal No. 10528 of 2018 @ SLP(C)NO.17467 OF
2014, Civil Appeal Nos. 1053410538 of 2018 @
SLP(C)NOS. 2604426048 OF 2014, Civil Appeal Nos.
1052910532 of 2018 @ SLP(C)NOS.2405524058 Of 2014,
Civil Appeal No. 10533 of 2018 @ SLP(C)NO.24964 OF
2014, Civil Appeal Nos. 1053910542 of 2018 @
SLP(C)NOS. 2929729300 OF 2014, Civil Appeal No. 10549
of 2018 @ SLP(C)NO.30673 OF 2015, Civil Appeal Nos.
1054510548 of 2018 @ SLP(C)NOS. 2692426927 OF 2015,
Civil Appeal No. 10550 of 2018 @ SLP(C) NO. 14350 OF
2016, Civil Appeal Nos. 1055110553 of 2018 @
SLP(C)NOS.2261222614 OF 2016, Civil Appeal Nos.
1055410558 of 2018 @ SLP(C)NOS.487491 OF 2017,
Civil Appeal No. 10559 of 2018 @ SLP(C)NO.33303 OF
2017.
J U D G M E N T
ASHOK BHUSHAN, J.
Delay condoned. Leave granted.
3
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.
1041210413 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
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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
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before 90 days from the date of purchase whichever is
later. When the appellant filed its returns for the
assessment year 20072008 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
6
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 20082009 taking the view that it was a belated
claim. The appellant filed writ petition. In the writ
petition following prayers were made:
"For the reasons stated above, it is prayed
that this Hon'ble Court may be pleased to
issue a Writ of Declaration or any other
appropriate Writ, order or direction in the
nature of Writ, declaring Section 19(11) of
the Act read with Rule 10(2) of the Tamil Nadu
Value Added Tax Rules, 2007 as ultra vires the
provisions of the Act, arbitrary and violative
of Articles 14 and 19(1)(g) of the
Constitution of India, pass such other or
further orders as this Hon'ble Court may deem
fit and proper on the facts and circumstances
7
of the case and thus render justice.
For the reasons stated above, it is prayed
that this Hon'ble Court may be pleased to
issue a Writ of Certiorari, Mandamus or any
other appropriate Writ, order or direction or
order in the nature of writ, quash the
impugned notice issued by the respondent in TN
33421463542/0809 dated 01.06.2009 served on
the petitioner on 16.06.2009 and direct the
respondent to allow the appellant's claim of
Input Tax Credit for the sum of
Rs.1,28,36,822/, pass such other or further
orders as this Hon'ble Court may deem fit and
proper on the facts and circumstances of the
case and thus render justice.”
5. We may also notice the facts of another Civil
Appeal No. 1050310507 of 2018 arising out of SLP(C)
Nos.1131911323 of 2014 (Sri Devi Enterprises vs. The
Commercial Tax Officer & Anr.).
6. The appellant is a partnership firm which owns
petrol pump and deals in petrol, diesel, Auto LPG and
Lubricating Oils (all products of Bharat Petroleum
Corporation Limited). The appellant's claim for Input
Tax Credit was disallowed by order dated 11.04.2011.
The respondent placed reliance on time limit under
Section 19(11) of Tamil Nadu VAT Act, 2006 for
disallowing Input Tax Credit to the appellant.
8
Aggrieved by the aforesaid order dated 11.04.2011 Writ
Petition (C) No.10648 of 2011 was filed by the
appellant wherein following reliefs were claimed:
"28. It is therefore just and necessary that
this Hon'ble Court may be pleased to issue a
Writ of Declaration or any other appropriate
writ, order or direction under Article 226 of
the Constitution of India, declaring that
19(11) of the Tamil Nadu Value Added Tax Act,
2006 is inconsistent with the charging
Section 3, and the general scheme of annul
assessment under Sections 20, 21, 22 and 27
Of the Tamil Nadu Value Added Tax Act, 2006,
and void is being arbitrary and irrational
infringing the rights of the petitioner under
Article 14 and 19(1)(g) and the resultant tax
demands arising out of disallow of input
credit tax are violative of Articles 265 and
300A of the Constitution of India, 1950, and,
therefore, unenforceable, or pass such
further or other orders as may deem fit and
proper in the circumstances of this case and
render justice.
29. It is therefore just and necessary that
this Hon'ble Court may be pleased to issue a
Writ of Certiorari or and other appropriate
writ order or direction under Article 226 of
the Constitution of India quashing the
proceedings of the First Respondent herein in
his TIN 33251300045/0607 dated 11.04.2011
and to quash the same or pass such further or
other orders as may deem fit and proper in
the circumstance of the case and render
justice.”
7. Similarly, large number of writ petitions were
filed in Madras High Court by other writ petitioners
9
where Input Tax Credit was disallowed on account of
noncompliance of Section 19(11) of the Tamil Nadu VAT
Act, 2006. All the writ petitions were decided by
common judgment dated 17.07.2013. 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.
The High Court further, in the cases where final
orders of assessment have been challenged, granted
liberty to the appellants to prefer statutory appeal
within 60 days from the receipt of a copy of the
order, the same was to be entertained by the appellate
authority subject to the assessee fullfilling other
mandatory statutory conditions. It is useful to notice
the operative portion of the judgment contained in
paragraphs 84,85 and 86, which is to the following
effect:
“84. The other bunch of writ petitions
challenging the assessment order/show cause
notices denying the credit taken in the
revised returns involving Section 19(11) of
TN VAT Act are not maintainable. The writ
petitions challenging the constitutionality
10
of Section 19(11) having failed the writ
petitions challenging assessment orders/show
cause notices have no legs to stand and
therefore, they should necessarily fail.
85. In cases where final orders of assessment
have been challenged, the assessees shall be
entitled to prefer statutory appeal against
such order and if such appeals are presented,
whithin a period of 60 days from the date of
receipt of a copy of this order, the same
shall be entertained by the appellate
authority subject to the assessee full
filling other mandatory statutory conditions
except rejecting those appeals on the ground
of limitation. In ceases where the
petitioners have challenged show cause
notices, they are at liberty to submit their
explanation. If such explanation is submitted
within a period of 30 days from the date of
receipt of a copy of this order, the
assessing authority shall consider the case
in accordance with law.
86. In the result, all the writ petitions are
dismissed holding that Section 19(11) is a
valid piece of legislation, cannot be struck
down as being either unreasonable or
discriminatory and violative of Article 265
and 360A of the Constitution of India. The
interim stay granted in all writ petitions
stand vacated and the miscellaneous petitions
are closed. There is no order as to costs.”
8. All these appeals have been filed challenging
common judgment dated 17.07.2013.
9. We have heard learned counsel for the appellants
as well as the learned Advocate General appearing for
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the State of Tamil Nadu.
10. Learned counsel for the appellants in support of
the appeals contend that substantive and vested right
of a registered dealer to claim Input Tax Credit
cannot be curtailed and fettered by an unreasonable
restriction imposed under Section 19(11) of the Tamil
Nadu VAT Act, 2006 requiring claim to be made within
90 days from the date of purchase or before the end of
the financial year whichever is later.
11. It is submitted that Section 19(11) makes the
enforcement of the substantive right unreasonable as
well as arbitrary and violative of Article 14 and
19(1)(g) of the Constitution. Such right under Section
3(3) of the Act cannot be taken away by Section 19(11)
which is only a procedural provision. Section 19(11)
is inconsistent with the charging Section 3(3) of the
Act. In any view of the matter, Section 19(11) is only
a directory provision and cannot be held to be
mandatory. Sections 3(3) and 19(11) being part of the
same scheme that is to allow Input Tax Credit, Section
19(11) has to be construed harmoniously so as not to
12
take away the right which has been given under Section
3(3). Statutory benefit under Section 3(3) is
mandatory being part of charging Section. Section 3
which entitles claim of Input Tax Credit does not
contain any limitation hence such right could not be
hedged by any limitation, as contained in
Section 19(11).
12. Learned AdvocateGeneral of the State of Tamil
Nadu refuting the submissions of learned counsel for
the appellants contends that Section 19(11) of the
Tamil Nadu VAT Act, 2006 contains essential conditions
under which Input Tax Credit can be claimed by a
dealer, hence, on noncompliance of the conditions the
Input Tax Credit has rightly been denied to the
appellants. Section 19(11) is a part of the same
statutory scheme and does not suffer from any ultra
vires. Learned AdvocateGeneral submits that judgment
of this Court in Jayam and Company vs. Assistant
Commissioner and another, 2016 (15) SCC 125, where
validity of Section 19(20) of the T.N.VAT Act, 2006
has been upheld and it has been laid down that
13
whenever concession is given by the statute or
notification, the conditions thereof should strictly
be complied with in order to avail such concession, is
fully applicable in the facts of the present case and
all the appeals are liable to be dismissed.
13. From the submissions of the learned counsel for
the parties and evidence on record following are the
issues which arise for consideration in this batch of
appeals :
(1) Whether Section 19(11) violates Article 14
and 19(1)(g) of the Constitution of India ?
(2) Whether Section 19(11) is inconsistent to
Section 3(3) of the Act ?
(3) Whether Section19(11) is directory provision,
noncompliance of which cannot be a ground for
denial of input tax credit to the appellants ?
(4) Whether denial of input tax credit to the
appellants is contrary to the scheme of VAT Act,
2006 ?
(5) Whether Assessing Authorities could have
extended the period for claiming Input Tax Credit
14
beyond the period as provided in Section 19(11) of
Tamil Nadu VAT Act, 2006 ?
14. Before we enter into the submissions of the
learned counsel of the parties, it is necessary to
notice the statutory scheme as delineated by the Tamil
Nadu Value Added Tax Act, 2006. The Tamil Nadu VAT
Act, 2006 has been enacted to consolidate and amend
the law relating to the levy of tax on sale and
purchase of the goods in the State of Tamil Nadu.
Input Tax Credit has been defined under Section 2(24)
in the following words:
"2(24) “input tax” means the tax paid or
payable under this Act by a registered dealer
to another registered dealer on the purchase
of goods including capital goods in the course
of his business;”
15. Section 3 is charging Section. Section 3(1), (2)
and (3) which are relevant for the present case, are
as follows:
“ 3. Levy of Taxes on sales of goods. (1) (a)
Every dealer, other than a casual trader or
agent of a nonresident dealer, whose total
turnover for a year is not less than rupees
five lakhs and every casual trader or agent of
a nonresident dealer, whatever be his total
turnover, for a year shall pay tax under this
Act.
15
1(b) Notwithstanding anything contained in
clause (a), every dealer, other than a casual
trader or agent of a nonresident dealer,
whose total turnover in respect of purchase
and sale within the State, for a year, is not
less than rupees ten lakhs, shall pay tax
under this Act.
(1A) Notwithstanding anything contained in
this Act, for the purpose of assessment of tax
under this Act, for the period from the 1st
day of January 2007 to the 31st day of March
2007 in respect of dealers referred to in
clause (a) or (b) of subsection (1) the total
turnover for the period from the 1st day of
April 2006 to the 31st day of December 2006
under the repealed Tamil Nadu General Sales
Tax Act, 1959 (Tamil Nadu Act 1 of 1959) and
the total turnover for the period from the 1st
day of January 2007 to the 31st day of March
2007 under this Act, shall be the total
turnover for the year 20062007. in respect of
such dealer whose total turnover for that year
exceeds the total turnover referred to in the
said clause (a) or (b) of subsection 1 and
if,
(a) such dealer has not
collected the tax under this Act, he
is liable to pay tax under this Act,
(b) such dealer has collected
the tax under this Act, he is liable
to pay tax under this Act, and other
provisions of this Act, shall apply
to such dealer.]
(2) Subject to the provisions of subsection
(1), in the case of goods specified in Part
B or Part C of the First Schedule, the tax
under this Act shall be payable by a dealer on
every sale made by him within the State at the
rate specified therein:
Provided that all spare parts, components
16
and accessories of such goods shall also be
taxed at the same rate as that of the goods if
such spare parts, components and accessories
are not specifically enumerated in the First
Schedule and made liable to tax under that
Schedule.]
(3) The tax payable under subsection (2) by a
registered dealer shall be reduced, in the
manner prescribed, to the extent of tax paid
on his purchase of goods specified in Part B
or Part C of the First Schedule, inside the
State, to the registered dealer, who sold the
goods to him.”
16. Section 19 contains a heading “Input Tax Credit”.
Section 19 contains 20 subsections. Section 19
enumerates several subsections which provide that no
Input Tax Credit is allowed in certain circumstances
whereas other provisions contain statutory scheme
under which Input Tax Credit is permissible. In the
present case we are concerned with Section 19(11)
which is to the following effect:
“19(11) In case any registered dealer
fails to claim input tax credit in respect of
any transaction of taxable purchase in any
month, he shall make the claim before the end
of the financial year or before ninety days
from the date of purchase, whichever is
later.”
17
Issue no. 1 and 2
17. The challenge in this batch of appeals is
challenge to a fiscal legislation. It is relevant to
notice the principles of statutory interpretation of a
fiscal legislation. The Constitution Bench of this
Court in (1981) 4 SCC 675, R.K.Garg versus Union of
India, has enumerated established principles for
interpreting law dealing with economic activities. In
paragraph 8 of the judgment following has been held:
" 8. Another rule of equal importance is that
laws relating to economic activities should
be viewed with greater latitude than laws
touching civil rights such as freedom of
speech, religion etc. It has been said by no
less a person than Holmes, J., that the
legislature should be allowed some play in
the joints, because it has to deal with
complex problems which do not admit of
solution through any doctrinaire or strait
jacket formula and this is particularly true
in case of legislation dealing with economic
matters, where, having regard to the nature
of the problems required to be dealt with,
greater play in the joints has to be allowed
to the legislature. The court should feel
more inclined to give judicial deference to
legislative judgment in the field of economic
regulation than in other areas where
fundamental human rights are involved.
Nowhere has this admonition been more
7
felicitously expressed than in Morey v. Doud
where Frankfurter, J., said in his inimitable
style:
18
“In the utilities, tax and economic
regulation cases, there are good
reasons for judicial selfrestraint if
not judicial deference to legislative
judgment. The legislature after all
has the affirmative responsibility.
The courts have only the power to
destroy, not to reconstruct. When
these are added to the complexity of
economic regulation, the uncertainty,
the liability to error, the
bewildering conflict of the experts,
and the number of times the judges
have been overruled by events — self
limitation can be seen to be the path
to judicial wisdom and institutional
prestige and stability.””
18. Another principle of statutory interpretation
which needs to be noticed is that a provision in the
statute is not to be read in isolation rather it has
to read along with other related provisions itself,
more particularly when the subject matter dealt within
different sections or parts of the same statute is the
same. This proposition was reiterated by this Court in
Kailash Chandra and another versus Mukundi lal and
others, 2002 (2) SCC 678 . In paragraph 11, following
has been laid down:
“11. A provision in the statute is not to be
read in isolation. It has to be read with
other related provisions in the Act itself,
19
more particularly, when the subjectmatter
dealt with in different sections or parts of
the same statute is the same or similar in
nature.”
19. Here we have noticed that Input Tax Credit is
being allowed under Section 3 which is provision on
“levy of taxes on sale of goods”. Section 3 is a
charging section which provides for levy of taxes on
sale of goods. Subsection (3) is the part of the same
scheme where tax payable under subsection (2) by
registered dealer shall be reduced, in the manner
prescribed, to the extent of tax paid on his purchase
of goods. Other provisions of the Act elaborated and
explained the whole mechanism of the Act. Section 4 to
12 are various provisions dealing with following
subject matters:=
“Section 4. Levy of tax on right to use any
goods.
Section 5. Levy of tax on transfer of goods
involved in works contract.
Section 6. Payment of tax at compounded rates
by work contractor.
Section 6A. Payment of tax at compounded rate
by brick manufacturers.
20
Section 7. Levy of tax on food and drinks.
Section 8. Payment of tax at compounded rate
by hotels, restaurants [sweetstalls and
bakeries]
Section 9. Levy of tax on bullion and
jewelery.
Section 10. Tax on goods purchased by dealers
registered under Central Sales Tax Act,
1956(Central Act 74 of 1956)
Section 11. Levy of tax on sugarcane.
Section 12. Levy of purchase tax.”
20. Section 13 deals with reduction of tax at source
in works contract, Section 14 deals with reversal of
tax credit, Section 15 deals with exempted sale,
Section 16 deals with stages of levy of taxes in
respect of imported and exported goods; Section 17
deals with burden of proof; Section 18 deals with zero
rating; and Section 19 deals with Input Tax Credit.
21. As noted above, Section 3, subSection (3)
provided that tax payable under subSection (2) by
registered dealer shall be reduced, in the manner
prescribed, to the extent of tax paid on his purchase
of goods specified in PartB and PartC of the First
21
Schedule inside the State, who is registered dealer
who sold the goods to him. The provision of Section 3
subSection (3) is a provision which entitled a
registered dealer to obtain a tax credit which has
been explained in Section 19. The submission that
Section 19 is inconsistent to Section 3(3) is wholly
misconceived. What is envisaged in Section 3 sub
Section (3) is amplified and explained in Section 19.
The reduction in the tax as contemplated in Section 3
subsection (3) has to be in manner and as provided in
Section 19. Section 19(11) contains a condition for
claiming the input tax credit. As noticed above, there
are other various provisions in Section 19 itself
where it contains provisions where no input tax credit
is allowable, e.g. Section 19(6) to Section 19(10),
which are as follows:
“19(6). No input tax credit shall be allowed
on purchase of capital goods, which are used
exclusively in the manufacture of goods
exempted under section 15.
[PROVIDED that on the purchase of capital
goods which are used in the manufacture of
exempted goods and taxable goods, input tax
credit shall be allowed to the extent of its
usage in the manufacture of taxable goods in
22
the manner prescribed.]
(7) No registered dealer shall be entitled to
input tax credit in respect of –
(a)goods purchased and accounted for
in business but utilized for the
purpose of providing facility to the
proprietor or partner or director
including employees and in any
residential accommodation; or
(b) purchase of all automobiles
including commercial vehicles, two
wheelers and three wheelers and spare
parts for repair and maintenance
thereof, unless the registered dealer
is in the business of dealing in such
automobiles or spare parts; or
(c)purchase of airconditioning units
unless the registered dealer is in
the business of dealing in such
units.
(8) No input tax credit shall be allowed to
any goods purchased by him for sale but given
away by him by way of free sample or gift or
goods consumed for personal use.
(9) No input tax credit shall be available to
a registered dealer for tax paid or payable at
the time of purchase of goods, if such
(i) goods are not sold because of any
theft, loss or destruction, for any
reason, including natural calamity.
If a dealer has already availed input
tax credit against purchase of such
goods, there shall be reversal of tax
credit, or
(ii) inputs destroyed in fire
23
accident or lost while in storage
even before use in the manufacture of
final products; or
(iii) inputs damaged in transit or
destroyed at some intermediary stage
of manufacture.
(10)(a) The registered dealer shall not claim
input tax credit until the dealer receives an
original tax invoice duly filled, signed and
issued by a registered dealer from whom the
goods are purchased, containing such
particulars, as may be prescribed, of the sale
evidencing the amount of input tax.
(b) if the original tax invoice is lost,
input tax credit shall be allowed only on the
basis of duplicate or carbon copy of such tax
invoice obtained from the selling dealer
subject to such conditions as may be
prescribed.”
22. Can it be said that above provisions are
inconsistent to Section 3(3) which permits reduction
of tax of registered dealer, answer, obviously is No.
When the input tax credit is to be allowed and when it
is to be disallowed is elaborated in Section 19 which
is selfcontained scheme and benefit under Section 3
subSection (3) can be claimed only when conditions as
enumerated in Section 19 are fulfilled.
23. Now, we need to refer to certain judgments of this
Court which has been relied by learned Counsel for the
24
appellant. The first judgment which needs to be
noticed is the judgment of this Court in
AIR (1967) SC
1823, Sales Tax officer, Ponkunnam and another versus
K.I. Abraham . This Court had occasion to consider
Section 8 of the Central Sales Tax Act, 1956 and Rule
6 of the Central Sales Tax (Kerala Rules, 1957).
Section 8 subSection (1) provided that for dealer who
in the course of interState trade or commerce (a)
sells to the government any goods; or (b) sells to a
registered dealer other than government goods of the
description referred to in subsection (3); shall be
liable to pay tax under this Act, which shall be one
percent of his turnover. Subsection (4) of Section 8
provides:
“8. (4) The provisions of subsection (1)
shall not apply to any sale in the course of
interState trade or commerce unless the
dealer selling the goods furnishes to the
prescribed authority in the prescribed manner—
(a) a declaration duly filled and
signed by the registered dealer to
whom the goods are sold containing
the prescribed particulars in a
prescribed form obtained from the
prescribed authority; or
25
(b) if the goods are sold to the
Government, not being a registered
dealer, a certificate in the
prescribed form duly filled and
signed by a duly authorised officer
of the Government.”
24. Rule 6 of Central Sales Tax (Kerala Rules) has
been noticed in paragraph 5, which is to the following
effect:
“5. Rule 6 of the Central Sales Tax (Kerala)
Rules, 1957 read as follows:
“6. (1) Every dealer registered under
Section 7 of the Act and every dealer liable
to pay under the Act shall submit a return of
all his transaction including those in the
course of export of the goods out of the
territory of India in Form II together with
connected declaration forms so as to reach the
assessing authority on or before the 20th of
each month showing the turnover for the
preceding month and the amount or amounts
collected by way of tax together with proof
for the payment of tax due thereon under the
Act.
Provided that in cases of delayed receipt
of declaration forms, the dealer may submit
the declaration forms at any time before the
assessment is made:
Provided further that the delay in
submitting the declaration forms shall not
exceed three months from the date of sale in
question:
26
Provided also that all declaration forms
pending submission by dealers on 251960
shall be submitted not later than 1621961.”
The first proviso to Rule 6 was inserted by
notification dated January 3, 1958, the second
by notification dated April 26, 1960 and the
third by notification dated January 16, 1961.”
25. The submission which was raised before this Court
was that phrase “in the prescribed manner used in
Section 8(4) does not take in the time element.” In
paragraph 6 of the judgment this Court interpreting
the phrase “in the prescribed” manner occurring in
Section 8(4) and held that it does not take in the
time element. This Court also notice the provision of
Section 13(4) which provision empowers the State to
make rules for the “time” within which and the manner
in which the authorities to whom any change in the
ownership of any business shall be furnished. It is
useful to extract relevant observations made in
paragraph 6 of the judgment:
“6……… But the phrase “in the prescribed
manner” in Section 8(4) does not take in the
timeelement. In other words, the section does
not authorise the rulemaking authority to
prescribe a time limit within which the
declaration is to be filed by the registered
dealer. The view that we have taken is
27
supported by the language of Section 13(4)(g)
of the Act which states that the State
Government may make rules for “the time within
which, the manner in which and the authorities
to whom any change in the ownership of any
business or in the name, place or nature of
any business carried on by any dealer shall be
furnished”. This makes it clear that the
legislature was conscious of the fact that the
expression “in the manner” would denote only
the mode in which an act was to be done, and
if any time limit was to be prescribed for the
doing of the act, specific words such as “the
time within which” were also necessary to be
put in the statute. In Stroud’s Judicial
Dictionary it is said that. the words “manner
and form” refer only “to the mode in which the
thing is to be done, and do not introduce
anything from the Act referred to as to the
thing which is to be done or the time for
doing it…………”.
26. This Court, in above view of the matter, held that
Rule 6(1) was ultra vires to Section 8(4) read with
Section 13(3) and 13(4) of the Act.
27. The ground on which Rule 6 was held as ultra vires
has been clearly noticed by this Court in paragraph 6
as noticed above. It is relevant to notice that in the
same paragraph this Court had noticed Section 13(4)(g)
of the Act where the State was empowered to make rule
with regard to the 'time'. Thus, this Court noticed
the contradiction in phraseology of Section 8 sub
28
Section (4) and Section 13 subsection (4) and held
that nonmention of time in Section 8(4) is for
clearly denying the rule making power to make any rule
pertaining to the time. Thus, the above case has no
bearing in the present controversy, since, in the
present case the time period is prescribed in Section
19(11) itself which is a part of the Act and has to be
read with Section 3 subsection (3).
28. Another judgment which needs to be noticed is
judgment of this Court in Commissioner of Central
Excise, Madras versus Home Ashok Leyland Ltd ., 2007
(4) SCC 51. The issue which came to be considered in
the above case was noticed in paragraph 1 of the
judgment, which is to the following effect:
“1. In this civil appeal filed by the
Department the short question which arises for
determination is whether the assessee was
entitled to avail MODVAT credit on
differential duty paid during the period 214
1986 to 241987 in respect of inputs received
in his factory during the year 198687 which
inputs were utilised between the period 168
1987 and 30121987. According to the
Department, Rule 57E of the Central Excise
Rules, 1944 underwent an amendment with effect
from 1541987 which according to the
Department operated prospectively and
consequently the claimant was not entitled to
29
avail MODVAT credit of differential duty paid
during the period 2141986 to 241987.”
29. In paragraph 2 of the judgment this Court noticed
that Rule 57E of the Central Excise Rule, 1944 as
first introduced on 01.03.1986 provided for adjustment
in duty credit. It further provided that duty paid on
any inputs is varied subsequently due to any reason
credit alone shall vary accordingly by adjustment in
the credit account maintained under Rule 57G(3). The
relevant provisions of Rule and amendments have been
noticed in paragraph 2 which is to the following
effect:
“ 2.... Rule 57E as it stood when MODVAT was
first introduced on 131986 provided for
adjustment in duty credit. It originally
provided that if the duty paid on any inputs
in respect of which credit has been allowed
under Rule 57A, is varied subsequently due to
any reason resulting in refund, the credit
alone shall be varied accordingly by
adjustment in the credit account maintained
under Rule 57G(3) (with which we are
concerned). Rule 57E underwent a change on 1
31987 under which it was stipulated that if
duty is paid on any inputs in respect of which
credit has been allowed under Rule 57A and if
such duty is varied subsequently due to any
reason resulting in refund or if the duty is
varied due to the change in classification
resulting in recovery then the credit allowed
shall also be varied accordingly by adjudgment
30
in the credit account maintained under Rule
57G(3). Rule 57E underwent a further change
on 1541987. This change operated till 154
2000. This case, therefore, falls within the
above period i.e. 1541987 to 1542000.
Under this amended Rule 57E the right of the
manufacturer to obtain additional MODVAT
credit in respect of inputs on which further
duty had been paid for any reason subsequent
to the date of the receipt of inputs by the
manufacturer is recognised. However, such
right accrues to the manufacturer subject to
his complying with the procedure of adjustment
contemplated in Rule 57E, as amended.”
30. In the above case, Rule 57E was amended w.e.f.
15.04.1987 providing for MODVAT credit but department
contended that since the amendment shall apply
prospectively the respondents were not entitled to
claim MODVAT credit. The High Court had held that Rule
57E as amended was clarificatory in nature and shall
not affect the right of manufacturer to claim MODVAT
credit for duty paid on inputs. In paragraph 4
following has been held:
“4. In our view, therefore, the courts
below were right in holding that Rule 57E was
procedural, clarificatory and therefore would
not affect the substantive rights of the
manufacturer of the specified final product to
claim MODVAT credit for the duty paid on the
inputs subsequent to the date of the receipt
of those inputs. Consequently, the respondent
manufacturer in the present case was entitled
31
to take credit between the period 1681987 to
30121987 in the sum of Rs 6,43,994.57.”
31. The above case also does not come to help the
appellant in the present appeal. In the above case
there was no case that manufacturer does not fulfill
any essential eligibility to obtain MODVAT credit on
the additional duty paid by the manufacturer. The
amendment which was made effective w.e.f. 15.04.2017
providing availability of MODVAT credit on additional
duty paid was held to be clarificatory, hence, did not
affect the right of MODVAT credit. The above case was
thus on its own facts.
32. The input credit is in nature of benefit/
concession extended to dealer under the statutory
scheme. The concession can be received by the
beneficiary only as per the scheme of the Statute.
Reference is made to judgment of this Court in
Godrej
and Boyce Mfg. Co. Pvt. Ltd. and Others versus
Commissioner of Sales Tax and Others, (1992) 3 SCC
624 . Rule 41 and 42 of Bombay Sales Tax, 1959 provided
for the set off of the purchase tax. This Court held
32
that Rule making authority can provide curtailment
while extending the concession. In paragraph 9 of the
judgment, following has been laid down:
“9... In law (apart from Rules 41 and 41
A) the appellant has no legal right to claim
setoff of the purchase tax paid by him on his
purchases within the State from out of the
sales tax payable by him on the sale of the
goods manufactured by him. It is only by
virtue of the said Rules — which, as stated
above, are conceived mainly in the interest of
public — that he is entitled to such setoff.
It is really a concession and an indulgence.
More particularly, where the manufactured
goods are not sold within the State of
Maharashtra but are despatched to outState
branches and agents and sold there, no sales
tax can be or is levied by the State of
Maharashtra. The State of Maharashtra gets
nothing in respect of such sales effected
outside the State. In respect of such sales,
the rulemaking authority could well have
denied the benefit of setoff. But it chose to
be generous and has extended the said benefit
to such outState sales as well, subject,
however to deduction of one per cent of the
sale price of such goods sent out of the State
and sold there. We fail to understand how a
valid grievance can be made in respect of such
deduction when the very extension of the
benefit of setoff is itself a boon or a
concession. It was open to the rulemaking
authority to provide for a small abridgement
or curtailment while extending a concession.
Viewed from this angle, the argument that
providing for such deduction amounts to levy
of tax either on purchases of raw material
effected outside the State or on sale of
manufactured goods effected outside the State
33
of Maharashtra appears to be beside the point
and is unacceptable. So is the argument about
apportioning the saleprice with reference to
the proportion in which raw material was
purchased within and outside the State.”
33. A ThreeJudge Bench in (2005) 2 SCC 129, India
Agencies (Regd.), Bangalore versus Additional
Commissioner of Commercial Taxes, Bangalore had
occasion to consider Rule 6(b)(ii) of Central Sales
Tax (Karnataka) Rules, 1957, which requires furnishing
original FormC to claim concessional rate of tax
under Section 8(1). This Court held that the
requirement under the Rule is mandatory and without
producing the specified documents, dealers cannot
claim the benefits. Following was laid down in
paragraph 13:
“13......Under Rule 6(b)(ii) of the
Karnataka Rules, the State Government has
prescribed the procedures to be followed and
the documents to be produced for claiming
concessional rate of tax under Section 8(4) of
the Central Sales Tax Act. Thus, the dealer
has to strictly follow the procedure and Rule
6(b)(ii) and produce the relevant materials
required under the said rule. Without
producing the specified documents as
prescribed thereunder a dealer cannot claim
the benefits provided under Section 8 of the
Act. Therefore, we are of the opinion that the
requirements contained in Rule 6(b)(ii) of the
34
Central Sales Tax (Karnataka) Rules, 1957 are
mandatory......”
34. This court had occasion to consider the Karnataka
Value Added Tax Act, 2013 in State of Karnataka versus
M.K. Agro Tech.(P) Ltd., (2017) 16 SCC 210 . This Court
held that it is a settled proposition of law that
taxing statute are to be interpreted literally and
further it is in the domain of the legislature as to
how much tax credit is to be given under what
circumstances. Following was stated in paragraph 32:
“32. Fourthly, the entire scheme of the
KVAT Act is to be kept in mind and Section 17
is to be applied in that context. Sunflower
oil cake is subject to input tax. The
legislature, however, has incorporated the
provision, in the form of Section 10, to give
tax credit in respect of such goods which are
used as inputs/raw material for manufacturing
other goods. Rationale behind the same is
simple. When the finished product, after
manufacture, is sold, VAT would be again
payable thereon. This VAT is payable on the
price at which such goods are sold, costing
whereof is done keeping in view the expenses
involved in the manufacture of such goods plus
the profits which the manufacturer intends to
earn. Insofar as costing is concerned, element
of expenses incurred on raw material would be
included. In this manner, when the final
product is sold and the VAT paid, component of
raw material would be included again. Keeping
in view this objective, the legislature has
intended to give tax credit to some extent.
35
However, how much tax credit is to be given
and under what circumstances, is the domain of
the legislature and the courts are not to
tinker with the same.”
35. The judgment on which learned Advocate General of
Tamil Nadu had placed much reliance i.e. Jayam and
Company versus Assistant Commissioner and Another,
(2016) 15 SCC 125, is the judgment which is relevant
for present case. In the above case, this Court had
occasion to interpret provisions of Tamil Nadu Value
Added Tax Act, 2006, Section 19(20), Section 3(2) and
Section 3(3). Validity of Section 19(20) was under
challenge in the said case. This Court after noticing
the scheme under Section 19 noticed following aspects
in paragraph 11:
“11. From the aforesaid scheme of Section
19 following significant aspects emerge:
(a) ITC is a form of concession provided by
the legislature. It is not admissible to all
kinds of sales and certain specified sales are
specifically excluded.
(b) Concession of ITC is available on
certain conditions mentioned in this section.
(c) One of the most important condition is
that in order to enable the dealer to claim
ITC it has to produce original tax invoice,
36
completed in all respect, evidencing the
amount of input tax.”
36. This Court further held that it is a trite law
that whenever concession is given by a statute the
conditions thereof are to be strictly complied with in
order to avail such concession. In paragraph 12,
following has been laid down:
“12. It is a trite law that whenever
concession is given by statute or
notification, etc. the conditions thereof are
to be strictly complied with in order to avail
such concession. Thus, it is not the right of
the “dealers” to get the benefit of ITC but it
is a concession granted by virtue of Section
19. As a fortiori, conditions specified in
Section 10 must be fulfilled. In that hue, we
find that Section 10 makes original tax
invoice relevant for the purpose of claiming
tax. Therefore, under the scheme of the VAT
Act, it is not permissible for the dealers to
argue that the price as indicated in the tax
invoice should not have been taken into
consideration but the net purchase price after
discount is to be the basis. If we were
dealing with any other aspect dehors the issue
of ITC as per Section 19 of the VAT Act,
possibly the arguments of Mr Bagaria would
have assumed some relevance. But, keeping in
view the scope of the issue, such a plea is
not admissible having regard to the plain
language of sections of the VAT Act, read
along with other provisions of the said Act as
referred to above.”
37
37. The Constitutional validity of Section 19(20) was
upheld. The above decision is a clear authority with
proposition that Input Tax Credit is admissible only
as per conditions enumerated under Section 19 of the
Tamil Nadu Value Added Tax Act, 2006. The
interpretation put up by this Court on Section 3(2)
and 3(3) and Section 19(2) is fully attracted while
considering the same provisions of Section 3(2) and
3(3) and provision of Section 19(11) of the Act. The
Statutory scheme delineated by Section 19(11) neither
can be said to be arbitrary nor can be said to violate
the right guaranteed to the dealer under Article 19(1)
(g) of the Constitution. We thus do not find any
infirmity in the judgment of the High Court upholding
the validity of Section 19(11) of the Act. Both the
issues are answered accordingly.
Issue Number 3 and 4
38. The alternative submission pressed by learned
Counsel for the appellant was that Section 19(11)
cannot be held to be mandatory and it is only a
38
directory provision, noncompliance of which cannot be
ground of denial of Input Tax Credit to the appellant.
The conditions under which Input Tax Credit is to be
given are all enumerated in Section 19 as noticed
above. The condition under which the concession and
benefit is given is always to be strictly construed.
In event, it is accepted that there is no time period
for claiming Input Tax Credit as contained in Section
19(11), the provision become too flexible and give
rise to large number of difficulties including
difficulty in verification of claim of Input Credit.
Taxing Statutes contains selfcontained scheme of
levy, computation and collection of tax. The time
under which a return is to be filed for purpose of
assessment of the tax cannot be dependent on the will
of a dealer. The use of word ‘shall’ in Section 19(11)
does not admit to any other interpretation except that
the submission of Input claimed cannot be beyond the
time prescribed. Section 19(11), in fact, gives
additional time period for claim of Input Credit. The
Statutory scheme contemplates filing of the timely
39
th
return before 20 of the succeeding month. Rule 7 of
Tamil Nadu Value Added Tax Rules, 2007 deals with
filing of returns. Rule 7(a) and (b) are as follows:
“ 7. Filing of Returns:
(1)(a) Every registered dealer liable to pay
tax under the Act, other than a dealer who
opted to pay tax under subsection (4) of
section 3 or section 6 or section 8 including
agent of a nonresident dealer and casual
trader, shall file return for each month in
th
Form I on or before 20 of the succeeding
month, to the assessing authority in whose
jurisdiction his principal place of business
or head office is situated. Such return shall
be accompanied by proof of payment of tax.
(b) Every registered dealer who is liable to
pay tax under subsection (5) of section 3
shall file a return in Form J on or before
th
20 of the succeeding month to the assessing
authority in whose jurisdiction his principal
place of business or head office is situated.
Such return shall be accompanied by proof of
payment of tax:
[PROVIDED that a registered dealer specified
in clause (a) or (b), whose taxable turnover
in the preceding year is two hundred crores of
rupees and above, shall file the above returns
th
on or before 12 of the succeeding month to
the assessing authority in whose jurisdiction
his principal place of business or head office
is situated. Such return shall be accompanied
by proof of payment of tax.]”
39. Section 21 of the Act provides for filing of
return in following manner:
40
“[21. Filing of returns.
Every dealer, liable to pay tax under this
Act, shall file return, in the prescribed form
showing the total and taxable turnover within
the prescribed period, in the prescribed
manner, along with proof of payment of tax.
The tax under this section shall become due
without any notice of demand to the dealer on
the date of receipt of the return or on the
last date of the period for filing return as
prescribed.]”
40. Section 19(11) thus allowed an extended period for
Input Credit which if not claimed in any month can be
claimed before the end of the financial year or before
the 90 days from the date of purchase whichever is
later. The provision of Section 19(11) is thus an
additional benefit given to dealer for claiming Input
Credit in extended period. The use of word “shall make
the claim” needs no other interpretation.
41. Learned Counsel for the appellant has referred to
judgment of this Court in Dal Chand versus Municipal
Corporation, Bhopal and another, 1984 (2) SCC 486, .
This Court in the above case was considering Rule 9(j)
of Prevention of Food Adulteration Rules, 1955, which
requires supply of copy of the report of the public
analyst within period of 10 days. The said rule was
41
held to be directory. While considering the above
case, following observations were made by this Court:
“……There are no ready tests or invariable
formulae to determine whether a provision is
mandatory or directory. The broad purpose of
the statute is important. The object of the
particular provision must be considered. The
link between the two is most important. The
weighing of the consequence of holding a
provision to be mandatory or directory is
vital and, more often than not, determinative
of the very question whether the provision is
mandatory or directory. Where the design of
the statute is the avoidance or prevention of
public mischief, but the enforcement of a
particular provision literally to its letter
will tend to defeat that design, the provision
must be held to be directory, so that proof of
prejudice in addition to noncompliance of the
provision is necessary to invalidate the act
complained of. It is well to remember that
quite often many rules, though couched in
language which appears to be imperative, are
no more than mere instructions to those
entrusted with the task of discharging
statutory duties for public benefit. The
negligence of those to whom public duties are
entrusted cannot by statutory interpretation
be allowed to promote public mischief and
cause public inconvenience and defeat the main
object of the statute. It is as well to
realise that every prescription of a period
within which an act must be done, is not the
prescription of a period of limitation with
painful consequences if the act is not done
within that period. Rule 9(j) of the
Prevention of Food Adulteration Act, as it
then stood, merely instructed the Food
Inspector to send by registered post copy of
the Public Analyst’s report to the person from
42
whom the sample was taken within 10 days of
the receipt of the report. Quite obviously the
period of 10 days was not a period of
limitation within which an action was to be
initiated or on the expiry of which a vested
right accrued. The period of 10 days was
prescribed with a view to expedition and with
the object of giving sufficient time to the
person from whom the sample was taken to make
such arrangements as he might like to
challenge the report of the Public Analyst,
for example, by making a request to the
Magistrate to send the other sample to the
Director of the Central Food Laboratory for
analysis. Where the effect of noncompliance
with the rule was such as to wholly deprive
the right of the person to challenge the
Public Analyst’s report by obtaining the
report of the Director of the Central Food
Laboratory, there might be just cause for
complaint, as prejudice would then be writ
large. Where no prejudice was caused there
could be no cause for complaint. I am clearly
of the view that Rule 9(j) of the Prevention
of Food Adulteration Rules was directory and
not mandatory………”
42. This Court in the above case clearly laid down
that whether particular provision is mandatory or
directory has to be determined on the basis of object
of particular provision and design of the statute. The
period of 10 days in submitting the report of the
public analyst was held to be directory for the reason
that on the negligence of those to whom public duties
43
are entrusted no one should suffer. Such
interpretation should not be put which may promote the
public mischief and cause public inconvenience and
defeat the main object of the statute. The
interpretation of the Rule 9(j) in the above case was
on its own statutory scheme and has no bearing in the
present case. We, thus, are of the view that time
period as provided in Section 19(11) is mandatory.
Issue no. 5
43. One of the submission advanced by learned counsel
for the appellant was that appellant assessee had
valid explanation for not claiming Input Tax Credit
within the time provided under Section 19(11), hence,
the authority had jurisdiction to extend the time. It
is submitted that time period as contained in Section
19(11) is not akin to the law of limitation. We have
already found that expression “shall” occurring in
Section 19(11) is mandatory whose compliance is
necessary for claiming Input Tax Credit. The appellant
has placed reliance on judgment of this Court reported
in Surinder Singh versus Central Government and
44
Others, 1986 (4) SCC 667 . Learned Counsel submits that
in the above case Central Government which was
exercising authority under Displaced Persons
(Compensation and Rehabilitation) Act, 1954 was held
to be entitled to extend the time which was required
for depositing the auction amount. In the above case,
the officials of the Central Government were
exercising Revisional Jurisdiction as conferred under
Section 33 of the Act to the Central Government. Facts
of the case were noticed in paragraph 9 to the
following effect:
The second question relates to the
“9.
validity of the order of Shri Rajni Kant the
officer to whom power under Section 33 was
delegated, extending time to enable the
appellant to deposit the auctionsale money.
Shri Rajni Kant by his order dated February 6,
1970 exercising the delegated powers of the
Central Government under Section 33 of the Act
set aside the order cancelling the auction
sale held in August 1959 and permitted the
appellant to deposit the balance of the
purchase money within fifteen days from the
date of the order with a default clause that
on his failure his petition would stand
dismissed. In accordance with that order
appellant was entitled to deposit the money
till February 21, 1970. It appears that on
appellant’s request the office prepared a
challan which was valid up to February 20,
1970. The appellant went to the State Bank on
45
February 20, 1970 to make the deposit but due
to rush he could not make the deposit. On his
application Shri Rajni Kant extended the time
permitting the deposit by February 28, 1970 as
a result of which a fresh challan was prepared
which was valid up to February 28, 1970 and
within that period appellant deposited the
balance purchase money………”
44. Section 33 has been extracted in paragraph 10 of
the judgment which is to the following effect:
“10. Section 33 reads as under:
“Certain residuary powers of Central
Government. —The Central Government may at any
time call for the record of any proceeding
under this Act and may pass such order in
relation thereto as in its opinion the
circumstances of the case require and as is
not inconsistent with any of the provisions
contained in this Act or the rules made
thereunder.”
45. This Court in the above case held that the officer
was exercising power of Central Government under
Section 33 and had ample jurisdiction to set aside the
Orders of the subordinate authorities canceling the
order and to permit the appellant to deposit the
balance amount of the purchase money. Following
observations while examining the power given under
Section 33 had been made:
46
“11. The power conferred upon the Central
Government under this provision is a residuary
power in nature as the title of the section
itself indicates. By enacting this section
Parliament has conferred wide powers on the
Central Government to call for the record of
any case and to pass any order which it may
think fit in the circumstances of the case.
The only limitation on exercise of this power
is that the Central Government shall not pass
any order which may be inconsistent with any
of the provisions of the Act and the rules
made thereunder. Therefore, the Central
Government or the delegated authority has
power to set aside any order of the
subordinate authorities, or to issue
directions which it may consider necessary on
the facts of a case subject to the aforesaid
rider. This power is intended to be used to do
justice and to mitigate hardship to a party
unriddled by technicalities. Shri Rajni Kant
while exercising powers of the Central
Government under Section 33 of the Act had
ample jurisdiction to set aside the orders of
the subordinate authorities cancelling the
auction held on August 24, 1959 and to permit
the appellant to deposit the balance amount of
the purchase money and he further had
jurisdiction to extend the time initially
granted by him. Extension of time to enable
the appellant to deposit the money did not
amount to review of the earlier order dated
February 6, 1970……….”
46. The above case was thus on its own facts, this
Court held that in exercise of residuary power of
Central Government, it had jurisdiction to pass such
order in relation thereto as in its opinion the
47
circumstances in the case require. In the scheme of
Tamil Nadu Value Added Tax Act, 2006, there is no
power conferred on any authority under the Act to
dilute the mandatory requirement under Section 19(11).
The taxing statute has to be strictly construed.
Nothing is to be read in, nothing is to be implied and
language used in taxing statute had to be looked into
fairly. The benefits envisaged in the taxing statute
had to be extended as per the restrictions and
conditions envisaged therein. The statute having not
given any indication for extension of time which is a
condition for claiming Input Tax Credit, the
submission that period could have been extended by
assessing authority is unfounded and cannot be
accepted. Issue number 5 is answered accordingly.
47. The High Court had already granted liberty to writ
petitioners in whose cases assessment has been
finalized to file statutory appeal and objections
which substantially protect the interest of the
appellants
48
48. We, thus, do not find any error in the judgment of
the High Court. All the appeals are dismissed.
..........................J.
( A.K. SIKRI )
..........................J.
( ASHOK BHUSHAN )
NEW DELHI,
OCTOBER 12,2018.