M/S T.P.L Plastech LTD. vs. State Of Uttarakhand Through Secretary Finance

Held

The Court held that the petitioner failed to establish that the respondents acted beyond their jurisdiction or in a manner not provided by the statute. The core of the litigation revolved around whether the plant and machinery for which ITC was claimed was new or old and used. The Court noted that the petitioner's Senior Advocate, despite lengthy arguments, could not produce any appropriate record or even an averment in the writ petition or affidavits to show that new machinery was purchased and that ITC was therefore legitimately claimed. Consequently, the petitioner had not made out a case for quashing the impugned order. Furthermore, the Court observed that M/s Time Technoplast Ltd., the vendor from whom the petitioner purchased the machinery, was a proper and necessary party to the writ application but had not been arrayed as such, which served as an additional ground for dismissing the writ application. The Court found no merit in the writ application.

Facts

The petitioner, M/s T.P.L. Plastech Ltd., a VAT-registered entity, sought to quash an order dated 27.02.2017 by the Additional Commissioner, Commercial Tax, Rudrapur Zone, and restrain further proceedings initiated by the Deputy Commissioner (Assessment) IVth, Commercial Tax, Rudrapur, via a notice dated 15.03.2017. The dispute concerns input tax credit (ITC) claimed on the purchase of capital goods for the assessment year 2010-11. The petitioner contended that ITC on capital goods was permissible under Section 6(6)(b) of the Uttarakhand VAT Act, claimed in two installments. The revenue initiated re-assessment proceedings under Section 29(4) of the Act, alleging the ITC was wrongly granted. The petitioner objected, arguing no new facts warranted re-assessment and that it constituted a change of opinion, which is impermissible. The Additional Commissioner rejected this objection, leading to the impugned notice.

Key Issues

1. Whether the Additional Commissioner erred in granting permission for re-assessment under Section 29(4) of the Uttarakhand VAT Act when no new material was before him, and the action amounted to a mere change of opinion? 2. Whether the petitioner is entitled to input tax credit on the purchase of capital goods, specifically whether the machinery purchased was new or old and used? Petitioner's Arguments: The petitioner argued that the re-assessment permission was granted without any additional material and was based on a change of opinion, which is not permissible. They relied on a coordinate bench judgment in WPMS No. 3735 of 2018. The petitioner contended that the original assessment was passed after careful verification of purchase bills and books of accounts. Revenue's Arguments: The revenue contended that re-assessment was initiated after scrutinizing the returns of the petitioner's vendor, which indicated that the petitioner might have purchased old, used machinery. The revenue demonstrated that the petitioner had received ITC and that the Additional Commissioner, upon reviewing the vendor's assessment, felt the matter warranted re-examination to ascertain if the petitioner was entitled to the tax concession/credit. The revenue also argued that the petitioner failed to aver in its writ petition or affidavits that the machinery purchased was new.