Haryana Plasts PVT. LTD. vs. Haryana Tax Tribunal & Etc.

Held

The Court noted that the issue regarding the eligibility of input tax credit for determining the tax payable had been decided by this Court in VAT Reference Nos. 9 and 10 of 2010, vide order dated July 25, 2014. In that decision, it was categorically held that the State cannot deny the benefit of input tax credit to the dealer for determining the tax payable. Consequently, the dealer was held entitled to credit for input tax credit while calculating the 50% deferred tax upfront payment. The learned counsel for the respondents did not dispute that the petitioner in the present case was also entitled to credit for input tax credit, as held in the aforementioned VAT References. Therefore, the Court found merit in the petitioner's claim regarding the calculation of the tax concession. The issue regarding the levy of tax on PVC fittings was not explicitly addressed in the final holding, but the overall demand was set aside.

Facts

The petitioner, Haryana Plast Private Limited, a manufacturer of PVC pipes and fittings, was entitled to a nine-year tax exemption for a new unit established in Haryana, commencing from July 1, 1999. The unit availed this benefit until March 31, 2003. Subsequently, under the Haryana Value Added Tax Act, 2003, the petitioner elected to pay one-half of the tax due for filing returns, as per sub-rule (2) of Rule 69. The dispute pertains to the tax year 2007-2008. The Assessing Authority, Kurukshetra, vide an order dated March 28, 2011, created an additional tax liability of Rs. 1,73,240/- under the 2003 Act and Rs. 28,113/- under the Central Sales Tax Act, 1956, against the petitioner's self-assessed liability. The petitioner claimed an excess deposit of Rs. 4,47,042/- and entitlement to relief under Rule 69(2). The Assessing Authority contended that the 50% tax concession was applicable only after adjusting input tax credit, while the petitioner argued it should be against the gross output tax.

Key Issues

1. Whether the benefit of tax concession @ 50% under Rule 69(2) of the Haryana Value Added Tax Rules, 2003, is allowable against the gross output tax due, including input tax credit, or only after adjusting input tax credit. 2. Whether the levy of tax on PVC fittings at 12.5% was justified, considering the petitioner's claim that they were covered under a different entry than Entry No. 60 of Schedule C. Petitioner's arguments: The petitioner contended that the benefit of the 50% tax concession under Rule 69(2) should be allowed against the gross output tax due, which includes input tax credit. They also claimed an excess deposit of tax. Revenue's arguments: The Assessing Authority held that the 50% tax concession was allowable only against the output tax due after adjusting input tax credit. The revenue also disputed the classification of PVC fittings for tax purposes.