In the High Court of Punjab and Haryana, Chandigarh VATAP No. 80 of 2008 Date of Decision: May 25, 2009 State of Punjab and another …Appellants Versus M/s Indian Colour Centre …Respondent CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE H.S. BHALLA Present: Mr. Piyush Kant Jain, Addl. AG, Punjab for the appellants (in VATAP Nos. 80 of 2008 & 10 of 2009) Mr. Sandeep Goyal, Advocate, for the appellant (in VATAP No. 8 of 2009) 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. This order shall dispose of VATAP Nos. 80 of 2008 and 10 of 2009, filed by the revenue as also VATAP No. 8 of 2009, which has been filed by the dealer, under Section 68 of the Punjab Value Added Tax Act, 2005 (for brevity, ‘the VAT Act’) against order dated 13.6.2008 in VAT Appeal No. 259 of 2007-08, order dated 3.3.2008 in VAT Appeal No. 41 of 2007-08 and order dated 16.4.2007 in VAT VATAP No. 80 of 2008 Appeal No. 244 of 2006-07 respectively, passed by the Value Added Tax Tribunal, Punjab, Chandigarh (for brevity, ‘the Tribunal’). In the orders dated 13.6.2008 and 3.3.2008, the Tribunal has held that the delay in filing the claim for input tax credit should have been condoned as per the provisions of Section 14 of the VAT Act and Rule 25(1)(b) of the Punjab Value Added Tax Rules, 2005 (for brevity, ‘the VAT Rules’). However, the Tribunal has dismissed the appeal of the dealer vide order dated 16.4.2007 (in VATAP No. 8 of 2009. 2. The VAT Act has come into force with effect from 1.4.2005, which has repealed the Punjab General Sales Tax Act, 1948 (for brevity, ‘the Sales Tax Act’) with effect from 31.3.2005. It is pertinent to notice that under Section 5(1-A) of the Sales Tax Act the State Government has declared various goods on which tax was levied at the first stage of sale and under proviso to the section, sale of such goods at a subsequent stage was exempted from imposition of tax, which was subject to the condition that the dealer effecting the sale at subsequent stage furnishes to the assessing authority certificate duly filed and signed by the registered dealer from whom the goods were purchased. 3. By Section 14 of the VAT Act, a provision was made to give input tax credit in respect of stock of goods held by dealers on 31.3.2005 on which tax was payable at the first stage of sale under the repealed Sales Tax Act. An important condition was imposed on such a claimant, namely, that it was required to furnish in the prescribed form to the designated officer a statement of tax paid 2 VATAP No. 80 of 2008 goods held in stock. Such a claim was to be submitted within 30 days i.e. by 30.4.2005. However, the period of 30 days was later extended to 45 days vide Act No. 11 of 2006 with effect from 24.4.2006. 4. The issue involved in these appeals is no longer res integra. Similar controversy was brought before us by the revenue in VATAP No. 70 of 2008 (State of Punjab and another v. M/s City Petro). After dealing with Rule 25 of the VAT Rules, Section 14 of the VAT Act and the judgment of Hon’ble the Supreme Court rendered in the case of Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd., (2007) 8 SCC 705 in detail the said appeal was dismissed vide order dated 8.1.2009, by observing as under:- “7. We have heard learned State counsel and have perused the paper book with his able assistance. It is undisputed that the VAT Rules with regard to filing of input tax credit claim were published on 21.6.2005. According to Rule 25 of the VAT Rules framed in pursuance of Section 45 of the VAT Act, a statement in respect of input tax credit claim could have been submitted within a period of 30 days from the ‘appointed day’, which according to Section 2(b) of the VAT Act is 1.4.2005. It would be appropriate to read Rule 25 of the VAT Rules, which is as under:- “25. Input tax credit on stock held on the appointed day.-- (1) Subject to the provisions of sub-section (3) of section 14, the input tax 3 VATAP No. 80 of 2008 credit on goods, other than the capital goods, held in stock by a taxable person, registered under the repealed Act on the appointed day, shall be available subject to the following conditions, namely:- (a) the person claiming the input tax credit is registered under the Act as a taxable person; (b) such person has submitted statement of such goods within a period of thirty days from the appointed day, in such form, as may be notified. (c) the taxable person, shall retain documents relating to the claim of the input tax credit for a period of six years from the appointed day and shall provide such documents to the Commissioner or the designated officer for audit as and when required. (2) Only those goods on which tax was paid under sub-sections (1-A) and (3) of section 5 of the repealed Act, prior to the appointed day and are taxable under the Act, shall be eligible for input tax credit. (3) xxx xxx xxx 4 VATAP No. 80 of 2008 (4) xxx xxx xxx (5) xxx xxx xxx (6) xxx xxx xxx” 8. A similar provisions has been made by Section 14 of the VAT Act, which reads thus:- “14. Input Tax Credit in respect of stock held on the appointed day: (1) A taxable person, who was registered under the repealed Act and whose registration has been continued under section 21, shall be entitled to input tax credit in respect of the tax paid or payable under the repealed Act on the goods, other than capital goods, lying in stock with him on the appointed day, to such extent and in such manner and subject to such conditions, as may be prescribed. He shall, however, be eligible for input tax credit on capital goods, if he is in the business of resale of such goods: Provided that such stock is out of the purchases made within twelve months prior to the appointed day. (2) The taxable person, who intends to claim input tax credit under sub-section (1), shall within forty five days from the appointed day, furnish in the specified form to the designated 5 VATAP No. 80 of 2008 officer, a statement of tax-paid goods held in stock. (3) xxx xxx xxx (4) xxx xxx xxx (5) xxx xxx xxx (6) xxx xxx xxx (7) xxx xx (8) Save as otherwise provided in this section, the provisions of section 13, shall apply mutatis mutandis to the input tax credit claimed under this section.” 9. It is further appropriate to mention that the period of 30 days was extended to 45 days by Act No. 11 of 2006 with effect from 24.4.2006. The respondent had filed its input tax credit claim on 18.6.2005 which was before the date of publication of the VAT Rules. By virtue of the use of expression ‘appointed day’ for counting the period of 30 days, used in Rule 25(1)(b), an argument was raised by the revenue that the period of 30 days or 45 days have to be counted from the ‘appointed day’ i.e. 1.4.2005. The Tribunal did not accept the aforementioned argument because by no stretch of imagination an impossible act could be permitted to be done. The VAT Rules were published on 21.6.2005 and the ‘appointed day’ of 1.4.2005 would require a dealer to file his return within 45 days, which would expire on 6 VATAP No. 80 of 2008 15.5.2005. This could never be intention of the legislature which has provided by Sections 13 and 14 of the VAT Act that a dealer can file his statement of input tax credit claim subject to certain conditions. Moreover, it is a transitory statute repealing the earlier Sales Tax Act. The goods which have already suffered sales tax could not be subjected to another doze of tax. 10. It is, thus, evident that even if period of 45 days is given from the ‘appointed day’ i.e. 1.4.2005, no dealer could have filed his input tax credit claim nor could the claim be filed w.e.f. 24.4.2006 when further period of 15 days was granted from that date. It is well settled that the law does not contemplate doing of an impossible act. The legislative intent is clear from the reading of Sections 13 and 14 of the VAT Act, which allow a dealer to claim input tax credit subject to various other conditions. It is also clearly made out that period of 45 days is intended to be given to the dealer to make input tax credit claim. However, the period of 45 days has to be counted from the date of publication of the VAT Rules on 21.6.2005. Any other interpretation would defeat the basic object of Sections 13 and 14 of the VAT Act and the VAT Rules. If the intention of the legislature and the rule making authorities is gathered from the aforesaid provisions then the period of 45 days have to be granted from the date of publication of the 7 VATAP No. 80 of 2008 VAT Rules. Therefore, it would be appropriate to apply the rule of purposive construction to a statute of this nature which would make VAT Rules workable, as has been laid down in para 82 of the judgment of Hon’ble the Supreme Court in the case of Chairman, Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd., (2007) 8 SCC 705. Such an interpretation would be consistent with the intention of the legislature and the rule framing authorities and would advance the object of the statute. For the reasons aforementioned, this appeal fails and the same is dismissed.” In view of above, we are of the considered view that these appeals are squarely covered by our order dated 8.1.2009 passed in the case of M/s City Petro (supra). Therefore, following the same reasoning, the appeals filed by the revenue, namely, VATAP Nos.80 of 2008 and 10 of 2009 are dismissed, whereas the appeal filed by the dealer, namely, VATAP No. 8 of 2009 is allowed. In view of the fact that these appeals have been disposed of on merit, we do not feel the necessity of passing any order in the civil miscellaneous applications filed alongwith the appeals and the same are disposed of as such. (M.M. KUMAR) JUDGE 8 VATAP No. 80 of 2008 (H.S. BHALLA) May 25, 2009 JUDGE Pkapoor 9