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Judgment
R. Subbiah, J.—Since the issue involved in all these Writ Petitions are one and the same, they are all taken up together and disposed of, by a common order.
For the sake of convenience, W.P.(MD). No. 1395 of 2010 is taken into consideration:--
The Writ Petition in W.P.(MD). No. 1395 of 2010 has been filed praying for a Writ of Certiorarified Mandamus to call for the records on the file of the respondent in TIN No. 33476231113/2008-08 dated 15.12.2008 pertaining to February 2008, quash the same as illegal and contrary to Article 286(1)(b) of the Constitution of India and further direct the respondent to refund the taxes paid on exports to the tune of Rs. 16,572/-. By the said order, the respondent herein had rejected the claim of the petitioner in returning back the input tax credit amount on the ground that the claim for refund of input tax credit was not made within the statutory period of 180 days as per Section 18(3) of the Tamil Nadu Value Added Tax Act, 2006. (for short ''TANVAT, 2006'').
The short facts necessary leading to the Writ Petitions are that the petitioners/dealers are effecting Zero Rate Sales/Export Sales. The petitioners are assessee on the file of the respective respondent. The petitioners have purchased the goods on payment of local tax from the registered dealers and on export of goods claimed input tax credit in the monthly returns, namely, Form I filed before the respective respondents. However, in the case on hand, they have not made such claim within period prescribed in Form-W within 180 days from the date of making Zero Rate Sales as per Section 18(3) of TNVAT Act.
It is the submission of the learned counsel for the petitioners that the petitioners herein have claimed refund of input tax credit on the purchased goods in most of the items as per the assessment orders already passed by the respondents under Section 22(2) of the TNVAT Act. In short, the petitioners herein are claiming refund of Input Tax Credit on the basis of Form-I submitted before the respective respondent. According to the learned counsel for the petitioner that Section 18(3) is only a directory and not mandatory in nature as that of Section 19(11) of the Act. Under such circumstances, this Court can always use its discretionary power available under Article 226 of the Constitution of India. The petitioners in all these Writ Petitions are claiming the relevant input tax credit primarily on the basis of Form I submitted by the respective petitioners, which cannot be refuted by the respondents on the ground of technicality. When such being the case, the petitioners are entitled for refund of tax as per Section 19(18) read with Rule 10(b) of the TNVAT Rules irrespective of the belated filing of Form-W as required under Section 18 of the Act. The fixing of time limit is an arbitrary manner. It is the further submission of the learned counsel for the petitioners that in such type of matters by interpreting the provision as inflexible, it would infringe Article 14 of the Constitution of India.
5.1. In support of his contention, the learned counsel for the petitioners relied on an unreported judgment in W.P.(MD). Nos. 2783 and 2784 of 2010, dated 24.11.2011 stating that a similar issue came up before this Court on this aspect, and this Court, had allowed the petitioners claim therein directing the respondents to refund the zero rate sales.
Per contra, Mr. R. Karthikeyan, the learned Additional Govt. Pleader submitted that as per Section 18 of the Act, the respective petitioners ought to have claimed the refund of input tax credit on zero rate sales within a period of 180 days from the date of making zero rate sale or else such credit shall lapse to the Government. Admittedly, in the instant case, the petitioners have not claimed the input tax credit on zero rate sales, within the prescribed period. Therefore, their claim could not be considered as per the Act. In support of his contentions, he placed reliance upon an unreported judgment made in a batch of Writ Petitions in W.P.(MD). Nos. 902 of 2009, dated 17.07.2013, wherein, the following paragraphs are usefully extracted below:--
"37. In M. Mohammed Haji Manachithodi Agencies, Palakkad Vs. State of Kerala, , the Division Bench of the Kerala High Court has held that the set-off is in the nature of a concession and no dealer has a right to claim input tax credit independent of the provision of Section 11 of the Kerala VAT Act.
provision for availing concession is to be strictly construed and followed:--
Input Tax Credit which is in the nature of concession or indulgence, could be availed only in the manner prescribed under Section 19 . Law is well settled that the person, who claims exemption or concessional rate, must obey and fulfil the mandatory requirements exactly. Unless there is strict compliance with the provisions of the statute, the registered dealer is not entitled to claim Input Tax Credit. Apart from Section 19 of TNVAT Act, there is no independent right to claim input tax credit. Section 19(11) stipulates time frame for availment of Input Tax Credit the registered dealer must strictly follow the mandatory requirements of the provisions.
The availment of Input Tax Credit is creature of Statute. The concession of Input Tax Credit is granted by the State Government so that the beneficiaries of the concession are not required to pay the tax or duty which are otherwise liable to pay under TNVAT Act. While so extending the concession, it is open to the Legislature to impose conditions. Section 19(11) is one such condition imposed making it mandatory for the registered dealer to claim Input Tax Credit before the end of the financial year or before ninety days from the date of purchase, whichever is later. The entitlement to claim Input Tax Credit is created by TNVAT Act and the terms on which Input Tax Credit can be claimed must be strictly observed.
The expression "in the manner prescribed" has been used in several places in Section 19 i.e., Section 19(2)(vi) , 19(3)(b) , 19(4) , 19(10)(a) and 19(10)(b) , 19(8) and in Section 3(3) . That apart in several places in TNVAT Act, the expression "in the manner prescribed"/"in the manner as may be prescribed" has been used in Section 2(36) &(38), 3(3) , 5(1) , 6A(2) , 8(2) , 14(1) , 14(2) , 18(2) , 20 ,21 ,22(2) , 22(4) , 22(6)(a) , 31 ,32 ,33(1) ,33(3) ,39 , 39(8) , 48(a)(1) , 50 , 51(4) , 52(4) , 54(4) , 58(6) , 59(5) , 59(6)(b) , 60(7)(b) , 62(3) , 64 , 66 , 67(3)(5) , 67(10) , 68 , 69(b) , 71(3)(d) , 87A , 88(6)(a) . The usage of the expression in the manner prescribed occurring in Section 3(3) shall be referable only to the manner prescribed in Section 19 . The expression "in the manner prescribed" occurring in Section 19 and Section 3(3) makes it clear that the Input Tax Credit could be availed in the manner prescribed. The modalities and the time frame in Section 19(11) as regards availment or enjoyment of Input Tax Credit is a pre-condition and not merely procedural. As far as Section 19(11) of TNVAT Act is concerned, the Legislative clearly intended to prescribe a time frame for availment of Input Tax Credit and the contravention of Section 19(11) means forfeiture of Input Tax Credit. Section 19(11) is a pre-condition for availing Input Tax Credit.
....
The Legislature consciously enacted Section 19(11) of the TNVAT Act with avowed object of incorporating the time frame for availing Input Tax Credit before the end of financial year or ninety days from the date of purchase whichever is later. The provision is for safeguarding the interest of the revenue and to prevent the cascading effect of tax burden on the ultimate consumer. Therefore, we are of the view that Section 19(11) is mandatory and its contravention will result in forfeiture of the concession of availments of Input Tax Credit."
By relying upon the above-said judgment, the Additional Govt. Pleader submitted that the input tax credit is not a right of the dealer but it is a concession extended by the Government to encourage the exporters subject to compliance of conditions imposed in the Act. He further submitted that it is true that the petitioners have filed their monthly returns in the form of Form I, but it is only a report of accounts in which there may not be details available such as Purchase Order No and date, Export Invoice Number and date, Shipping Bill/Airway Bill No. date, Bill of Lading No. and date, Letter of Credit No. and date and Importer-Exporter Code (IEC) No. so as to enable the respondents to know the real transaction involving in Foreign Countries. Further, Section 18 of the Act is an independent charge which cannot be compared or read with Section 19 of the Act. When an Act prescribes a particular thing to be done in a particular manner prescribing the time limit, the petitioners having gone into deep slumber, suddenly cannot claim without complying the provisions of the Act. Section 19(18) relied on by the petitioner deals with only the trading which is happening within the State/Inter-state trade and it cannot be taken into account for Zero Rating Sales. The principle laid down in the case of USA Agencies v. The Commercial Tax officer, dated 17.08.2013 will invariably be applicable to the case on hand also. The subtle difference is that the said judgment deals with trading happening within the State and in the case on hand, it is happening outside the Country. Assuming for a moment, if a trader claims the input tax credit amount after a long delay, the Government will be put to a lot of peril and it will affect the finance position of the Government. The Section 18 of the Act is mandatory in nature that cannot be diluted by mixing it with Section 19 of the Act, which has no relevance at all. When the petitioners claim Input Tax Credit in the form of ''Form W'' only then the respondents can cross-check whether the goods are exported to the foreign countries or not. The learned Additional Govt. Pleader has made a meticulous submission that since the issue on hand is related to revenue, this Court cannot extend the time limit beyond the statutory period. Such time limit is fixed in order to avoid misuse and stop tax evasion. When the intent of the legislature is not properly availed by the purchasers, it did not intend to grant such benefits in a given situation. If an indefinite period is allowed, it is likely to be misused apart from the fact that after the lapse of long time, the related transactions cannot be verified.
I heard the submissions made on either side and perused the materials available on record.
The primary question to be decided in this Writ Petition is whether the petitioners are entitled to get back their Input Tax Credit on Zero Rate Sales, after the prescribed statutory period given under Section 18 of the Act. In the case on hand, there is no dispute that the petitioners herein have filed the monthly returns in the form of Form-I in time by which they claim the refund of Input Tax Credit from the respondents. The respondents herein have turned down their request in refunding the Input Tax Credit on the primary ground that such claim is beyond the statutory period. Though the learned counsel for the respondents emphasis that Section 18(3) is mandatory in nature, it does not have the effect as envisaged in Section 19(11) of the Act. It is true that the Input Tax Credit is a concession but such concession is extended to the Companies/Dealers in order to encourage them to do exports by which the foreign exchange will flow into the Country and give a fillip to the economy of our State or Country as the case may be. In a given situation, necessarily, this Court will have to answer as to whether, it can use its discretionary power by interpreting Section 18(3) of the Act. The words envisaged in Section 18(3) are reads as follows:--
"18(3).Where the dealer has not adjusted the input tax credit or has not made a claim for refund within a period of one hundred and eight days from the date of making zero rate sale such credit shall lapse to Government."
The judgment heavily relied upon by the Additional Govt. Pleader in USA Agencies cited supra is with regard to the Section 19 of the TNVAT Act where the claim of the petitioners were negatived as the Act very particularly emphasises that the purchaser shall make the claim before the end of the financial year or before ninety days from the date of purchaser, whichever is later. The obligation is on the part of the purchaser. Therefore, this Court could not issue a direction positively to the appellants therein. However, in the case on hand, it deals with Zero Rate Sales. Therefore, the judgment relied on by the respondents cannot be applied in the case on hand. When admittedly there is no dispute that the petitioners have exported the goods, the technicalities shall not stand in the way of claiming refund of Input Tax Credit in the form of ''Form W''. In this context, the judgment relied on by the petitioners in W.P.(MD). Nos. 2783 and 2784 of 2010, dated 24.11.2011 would give a fitting answer.
The dictum laid down in the said judgment would reveal the fact that as regards the Input Tax Credit, the Officer cannot cite the reason that Form-W was filed belatedly and thus they cannot reject the claim of the petitioners. The judgment relied on by the petitioners is squarely applicable to the present case on hand.
Therefore, a direction is issued to the respondents herein to the effect that if the petitioners after following the conditions stipulated in Form-W issued by the respondents, except the time limit, the respondents shall then consider the claim of the petitioners afresh as per Section 22(2) of the Act in the light of the judgment cited supra, within a period of eight weeks from the date of receipt of a copy of this order. It is made clear since the petitioners have approached this Court within a reasonable time, this Court has taken into consideration the petitioners submission herein. It is further made clear that by this judgment this Court has interpreted the time limit alone however the other formalities as stated in Form-W shall be in tact in all respects so as to say that it has to be complied with by the dealers/purchasers, as the case may be, if he chooses to claim the refund of Input Tax Credit from the respondent.
In the above-terms, the Writ Petitions are disposed of. No costs.