M/S. Tvs Motor Company Ltd. vs The State Of Tamil Nadu And Others

5. The brief facts leading to the cases are as follows:

7. On January 17, 2005, a White Paper was released by the Committee of Finance Ministers (hereinafter referred to as “White Paper”), making it clear that Input Tax Credit (hereinafter “ITC”) would be available to set-off against tax liability on all intra-state and inter-state sales. Paragraph 2.3 of the same states as follows:

10. After the Assessment was completed for the appellants for Assessment Year 2007-08, they received Show Cause Notices from the Revenue in and around 2013, proposing to reverse the ITC claimed made by them on the ground that they had not filed the Declaration Form C for the purpose of availing the concessional rate of tax. The appellants paid the differential tax arising out of the Assessment order for 2007-08 as well as the amount relating to proportionate ITC under process. Civil Appeal Nos.__/2018 [@SLP(C) Nos. 9320-9324 of 2015] a/w connected matters Page 4 of 46

19. The Impugned Judgment-II dated November 17, 2017 arose out of Writ Petition No. 29393 of 2017, challenging the constitutional vires of Section 19(5)(c) of the TNVAT Act and Rule 10(9)(a) of the Rules, where the High Court of Judicature at Madras, while relying on its previous decision dated 29.10.2014 in Impugned Judgment-I, observed that the same issue had arisen in the Impugned Judgment-I and the vires of the TNVAT Act and the Rules had been upheld therein and accordingly, dismissed the Writ Petition No. 29393/2017.

3. Accordingly, it is proposed to phase out the CST in 4 steps, i.e., reducing the CST rate from 4% to 3% w.e.f. 1st April, 2007, from 3% to 2% w.e.f. 1st April, 2008, from 2% to 1% w.e.f.1st April, 2009 and eventually abolishing the tax on 31st March, 2010. An integrated national Goods and Services Tax (GST) is proposed to be introduced w.e.f. 1 st April, 2010. The agreed package for compensation to the States for revenue loss on account of phasing out of the CST shall consist of non-monetary measures as well as monetary measured.

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44. In view of the aforesaid discussion, we do not find any merit in the contentions raised by Mr. Giri. The judgments cited by him would have no application either.

49. Result of the aforesaid discussion would be to uphold the judgment of the High Court with one rider, namely, that in those cases where a dealer makes sales exclusively to the other State Government(s), benefit of ITC would be allowed without insisting on the furnishing of Form ‘C’. However, in order to avail this benefit, a certificate from said the State Government to whom the supplies are made would be obtained by the dealer claiming ITC and submitted to the VAT authorities.

50. As a consequence, we allow Civil Appeal arising out of SLP(Civil) No. 9326 of 2015 to the extent indicated above and other appeals are dismissed with cost.

OCTOBER 12, 2018 Civil Appeal Nos.__/2018 [@SLP(C) Nos. 9320-9324 of 2015] a/w connected matters Page 46 of 46