M/S Enkay (INDIA) Rubber Co. P. LTD., Gurgaon vs. State Of Haryana And Others

Held

The Court held that while the Tribunal concluded the assessee could not claim Input Tax Credit under Section 8 of the HVAT Act, it failed to provide a discussion on the essential requirements of Section 8. Specifically, the Tribunal did not record a clear finding on whether the DEPB, used for importing raw material, was indeed used in the manufacture of goods for sale within the State of Haryana. Consequently, the Court found that the interpretation of Section 8(1) of the HVAT Act required revisiting. The Court did not decide the substantive question of whether ITC was admissible but remanded the matter to the Tribunal for a fresh decision.

Facts

The appellant, M/s Enkay (India) Rubber Company Private Limited, engaged in manufacturing and trading shoe soles, filed an appeal against orders disallowing input tax credit (ITC) on the purchase of a Duty Exemption Passbook (DEPB) license. The DEPB license was used for importing raw materials for manufacturing goods for sale. The Assessing Authority disallowed the ITC on February 15, 2010. The Joint Excise and Taxation Commissioner (Appeals) dismissed the appeal on February 23, 2011. The Haryana Tax Tribunal also dismissed the appellant's appeal on November 11, 2011. The appellant is challenging these orders before the High Court.

Key Issues

1. Whether the assessee-appellant is entitled to input tax credit on tax paid on the purchase of a DEPB license, which was used in the import of raw material utilized in the manufacture of goods for sale? This issue turns on the interpretation of the provisions of the Haryana Value Added Tax Act, 2003 (HVAT Act) concerning eligibility for input tax credit. The appellant argued that the DEPB license was used for importing raw materials for manufacturing goods for sale, implying eligibility for ITC. 2. Whether the provisions of Section 8 of the HVAT Act have been complied with? The appellant contended that Section 8 of the HVAT Act was not properly considered or complied with in the prior proceedings. The revenue's arguments are not explicitly recorded in the judgment.