Tvl.Kerala Package Products vs. The Assistant Commissioner(CT)

Held

The Court, considering the limited scope of the prayer and the pendency of the petitioner's representation before the respondent, did not delve into the merits of the case concerning the applicability of the proviso to Section 19(2) of the Tamil Nadu Value Added Tax Act, 2006, or the legality of the ITC reversal. Instead, the Court directed the respondent to consider the petitioner's representation filed under Section 84 of the Act within a period of four weeks from the date of receipt of a copy of the order. The Court explicitly stated that it was not going into the merits of the matter. The operative direction was to ensure the timely consideration of the petitioner's grievance by the respondent authority.

Facts

The petitioner, Tvl. Kerala Package Products, is engaged in the business of corrugated boxes. For the tax period 2014-2015, they filed returns claiming Input Tax Credit (ITC) under the Tamil Nadu Value Added Tax Act, 2006. The assessment for this period was completed on 31.10.2015, accepting the petitioner's turnover. Subsequently, on 26.07.2016, the respondent, The Assistant Commissioner (CT) – II, Virudhunagar, issued a notice proposing to reverse the ITC. The petitioner represented on 20.04.2017 under Section 84 of the Act seeking a refund of the reversed ITC, citing a High Court judgment. As this representation was pending, the petitioner filed a writ petition seeking a direction for its disposal.

Key Issues

1. Whether the Proviso inserted to Section 19(2) of the Tamil Nadu Value Added Tax Act, 2006, by Act No.28 of 2013, is applicable to manufacturers, and consequently, whether the reversal of Input Tax Credit (ITC) by the respondent is legally sustainable? The petitioner argued that the reversal of ITC was erroneous, relying on the High Court's decision in Everest Industries Limited Vs. State of Tamil Nadu, which held that the said proviso was not applicable to manufacturers. They sought a refund of the reversed ITC. The respondent, represented by the Additional Government Pleader, acknowledged that the petitioner's representation under Section 84 of the Act was pending and sought time for appropriate orders.