M/S.Brace Iron And Steel Private LTD.,New Delhi vs. Chief Comminr. Of CT And GST, Odisha, Cuttack

1. Mr. Datar, learned senior advocate virtually appears on behalf of petitioner and submits, impugned is appeal order dated 30th March, 2024 denying input tax credit (ITC), purportedly on application of provision in section 20(8)(c) in Orissa Value Added Tax Act, 2004. 2. He submits, his client had purchased capital goods used for manufacture. The goods were then leased out to the seller. The second transaction is also deemed to be a sale. His client is entitled to ITC. There was illegal denial of it by impugned order.

He submits, several grounds were taken by his client including that it is a dealer and sub-section (3) in section 20 is applicable to it. It is not a manufacturer, to whom section 20(8) is applicable. This was not dealt with in impugned order. Instead, the authority pronounced upon the transactions, to say they were paper transactions and thereafter proceeded to deny the ITC, he reiterates, on purportedly applying section 20(8)(c).

Mr. Datar draws attention to, inter alia, order dated 21st February, 2023 made by coordinate Bench in parties’ own case to demonstrate that appellate order was passed pursuant to relegation by said order. All points were left open to his client to urge before the authority. It did so. The points were not dealt with.

Mr. Mishra, learned advocate, Standing Counsel appears on behalf of revenue and submits, impugned order should not be interfered with. There cannot be any dispute regarding applicability of provision in section 20(8)(c). Petitioner purchased capital goods, second hand. They were being used for manufacture. Schedule ‘D’ referred to in clause (c) of the provision clearly bars availing ITC. He submits further, the authority correctly applied the provision. It follows that section 20(3) is not applicable as can be relied upon by petitioner.

Mr. Mishra would want to further elaborate as to why section 20(3) is not applicable. We have interrupted him because there is no illumination in that line in impugned order though, ground taken was mentioned, inter alia, in clause (iii) of the recital of the grounds in impugned order. In the circumstances, considering petitioner was entitled to raise all grounds as recorded in said order dated 21st February, 2023 made in presence of revenue, we set aside the order and restore the appeal to the authority.

The writ petition is disposed of.