IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 13TH JULY 2011 / 22ND ASHADHA 1933 OT.Rev.No. 3 of 2011() ---------------------- TAVAT.49/2010 of KERALA VAT APPELLATE TRIBUNAL, ERNAKULAM .................... PETITIONER/APPELLANT/APPELLANT/ASSESSEE ----------------------------------------------------------- HINDUSTAN PETROLEUM CORPORATION LIMITED, COCHIN REGIONAL OFFICE, KARSHAKA ROAD, ERNAKULAM. BY ADV. SRI.V.V.ASOKAN SRI.R.JAIKRISHNA RESPONDENT/RESPONDENT/RESPONDENT/REVENUE -------------------------------------------- STATE OF KERALA, REPRESENTED BY JOINT COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM, KOCHI-15. BY G.P. SRI.V.K.SHAMSUDEEN THIS OTHER TAX REVISION (VAT) HAVING BEEN FINALLY HEARD ON 13/07/2011, ALONG WITH OTRV NOS.4 & 15 OF 2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPEDIX (OTRV 3/2011) ANNEXURE A: TRUE COPY OF THE ASSESSMENT ORDER DT.6.6.2009. ANNEXURE B: TRUE COPY OF APPELLATE ORDER DT.2.12.2009. ANNEXURE C: TRUE COPY OF ORDER OF THE TRIBUNAL IN T.A.(VAT)49/2010 DT.10.8.2010. TRUE COPY P.S. TO JUDGE C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... O.T. Rev. Nos.3,4 & 15 of 2011 .................................................................... Dated this the 13th day of July, 2011. JUDGMENT Ramachandran Nair, J. The common petitioner in the connected revision cases is a Government of India Undertaking engaged in marketing of petroleum products. Question raised is with regard to entitlement of input tax credit over the output tax payable on subsidised products like LPG and kerosene. Even though penalty was also levied besides demanding the excess input tax claim disallowed, the Tribunal reduced penalty to a token amount of Rs.10,000/-. 2. During hearing counsel for the petitioner pointed out that subsidy is reimbursed by the Government and so much so, it is virtual sale price received. We do not think this argument is going to benefit the petitioner because if subsidy is treated as sales turnover, the petitioner will be liable to pay higher amount of output tax and if at all input tax is fully set off, still petitioner may be called upon to pay further additional tax. We, therefore, do not find any merit in this 2 contention. So far as petitioner's claim for input tax paid or output tax payable is concerned, the provision contained in second proviso to Section 11(3) of the KVAT Act is very specific, which prohibits claim of input tax over the output tax payable for the same goods. So much so, there is no merit in the challenge against assessment confirmed by the Tribunal. So far as penalty is concerned, the amount sustained by the Tribunal is only token penalty. We do not find any merit in the revision cases and are consequently dismissed. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms