Case: ALD AUTOMOTIVE PVT LTD Vs. THE COMMERCIAL TAX OFFICER AND ORS NOW UPGRADED AS THE ASSISTANT COMMISSIONER (CT)

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 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 before 90 days from the date of purchase whichever is later. When the appellant filed its returns for the assessment year 2007-2008 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.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 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 appellants 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 appellants objections by treating the entire amount of Input Tax Credit of Rs.1,28,36,822/- as not admissible for the assessment year 2008-2009 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 Honble 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 Honble Court may deem fit and proper on the facts and circumstances of the case and thus render justice. For the reasons stated above, it is prayed that this Honble 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 33421463542/08-09 dated 01.06.2009 served on the petitioner on 16.06.2009 and direct the respondent to allow the appellants claim of Input Tax Credit for the sum of Rs.1,28,36,822/-, pass such other or further orders as this Honble Court may deem fit and proper on the facts and circumstances of the case and thus render justice.?We may also notice the facts of another Civil Appeal No. 10503-10507 of 2018 arising out of SLP(C) Nos.11319-11323 of 2014 (Sri Devi Enterprises vs. The Commercial Tax Officer & Anr.).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 appellants 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. 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:is therefore just and necessary that this Honble 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.It is therefore just and necessary that this Honble 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 33251300045/06-07 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.?Similarly, large number of writ petitions were filed in Madras High Court by other writ petitioners where Input Tax Credit was disallowed on account of non-compliance 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 full-filling 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 followingother 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 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.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.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.All these appeals have been filed challenging common judgment dated 17.07.2013.

Court's reasoning:
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-Section (4) and Section 13 sub-section (4) and held that non-mention 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 sub-section (3).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.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, 2016. 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 4The 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 directory provision, non-compliance 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 self-contained 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 return before 20th of the succeeding month.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.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 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. 5the above case, the officials of the Central Government were exercising Revisional Jurisdiction as conferred under Section 33 of the Act to the Central Government.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 sub-ordinate authorities canceling the order and to permit the appellant to deposit the balance amount of the purchase money.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 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, noting 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.