2013 (5) TMI 134 – KERALA HIGH COURT – TMI, [2013] 64 VST 122 (Ker) – – Availing input tax credit – Not a registered dealer at the relevant time – The business was being run earlier, as a 'proprietorship concern' , which expired , than a partnership deed was executed and the business was taken over accordingly. It was much later, the new partnership firm who has approached this Court – Held that:- Section 11 (12) and 11 (13) make it explicitly clear that the benefit contemplated there in can be claimed only by a 'registered dealer' and never by anybody else.
Since the present partnership took its breath for the first time only much later, the petitioner was never an entity before the concerned respondents/authorities anytime before and it cannot be said that the petitioner firm is entitled to have the input tax credit as a matter of right, irrespective of the mandate under the statute, by entertaining the application preferred in January 2006 for retrospective registratio
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3-11-2004. On demise of the owner, the legal heirs took over the business as a running concern, by forming a partnership. Present petitioner is a different entity, as five of the earlier partners were subsequently excluded and the firm is now being run just by two persons, as the partners. 3. The grievance of the petitioner originates from the time when the petitioner submitted necessary application for availing the benefit of input tax credit in the year 2006. It is stated that the petitioner had applied for obtaining the registration under the KVAT Act, and was granted registration, with effect from 1-4-2005, as per Ext.P3 dated 16-3-2006. However, the claim preferred by the petitioner as borne by Ext.P5 was stated as not acceptable to the department, and the said position was conveyed to the petitioner vide Ext.P6 series show-cause notices under Section 22(1) of the KVAT Act stating that the petitioner, being not a registered dealer at the relevant time, it could not be acceded to.
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over automatically, to the newly introduced KVAT system, which was not case of the petitioner. Thereafter, the petitioner was served with Ext.P10 revised notice dated 20-6-2006, specifically referring to the rejection of the claim in Form 25 A filed on 31-3-2006, as the petitioner was not a registered dealer as on 31-3-2005, which was the 'sine qua non' to have 'automatic carry forward' under the KVAT Act, in relation to registration. Further proceedings were issued in respect of the liability sought to be mulcted upon the petitioner, when the petitioner approached this Court by filing the above writ petition. 4. During the pendency of the above writ petition, taking note of the lapse on the part of the petitioner, the assessment was finalised as per Ext.P13 and the liability was accordingly sought to be realised by issuing Ext.P4 demand notice . This made the petitioner to amend the writ petition by filing I.A No 1698 of 2008, which was allowed and matter is now taken
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ount of input tax credit, maintain the accounts and such other records as may be prescribed, in respect of purchases, supplies and sales effected by him in the State. Sec 11(13) of the Act:- 13) Subject to the provisions of sub-sections (4) to (7) and sub-sections (9) to (12) , input tax credit shall be allowed to a registered dealer in respect of the tax paid under the Kerala General Sales Tax Act, 1963 (15 of 1963) where the tax paid by the dealer who sold the goods to such registered dealer or by any previous seller, or the Kerala Tax on Entry of Goods into Local Areas Act, 1994(15 of 1994), in respect of goods purchased by him during a period of one year immediately preceding the date of commencement of this Act, subject to such conditions and restrictions as may be prescribed where such goods are i) held as opening stock on such date and sold or used in the manufacture of taxable goods or used in the execution of works contract or used as containers or packing materials for the pa
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ate application was necessary to have registration, particularly under the KGST Act, which was the only reason for delay. The contention is that the petitioner shall not be non-suited on the above ground, more so when the petitioner was given to understand that the defect could be rectified; which made the petitioner to deposit the 'registration fee' along with the 'compounding fee' for the delay, thus remitting a total sum of ₹ 35,000/-. The learned Counsel for the petitioner also places reliance on two decisions rendered by this Court reported in Sales Tax Officer vs. Kerala Curry House (2010 (36) VST 126) and Chandra Interiors vs. State of Kerala (2011 (44) VST 100) in support of the case. 7. With regard to the statutory prescription, in so far as Section 11 (12) and Section 11 (13) are categoric, there cannot be any ambiguity in this regard and if at all any benefit is to be obtained, the parameters specified under the provisions have to be complied with. Sinc
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e actual date of the commencement of business. A learned Judge held that the party was eligible to have retrospective registration from the date of commencement of the business; against which appeal was preferred, which was being considered by the learned Judges in the said case. 9. It was noted that Section 16 (2) of the Act prior to the amendment provided that the registration shall take effect only after the date of filing the application for registration. But later, it was substituted adding 'proviso' to the following effect: "Provided that registration shall be deemed to have been granted with effect from the date of commencement of business irrespective of the date of application, for the purposes of,- (a) paying tax under sub-section (5) of section 6, subject to eligibility, and (b) opting for payment of tax under section 8 for the relevant years subject to eligibility: Provided further that new dealers applying for registration and existing dealers having registrat
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s made clear that, as per the new proviso, the registration granted will have retrospective effect from the date of commencement of the business, only for the purpose of 'clauses (a) and (b)' of the said proviso which enabled the eligible dealer to pay the tax on presumptive basis under Section 6(5) of the Act, and also dealers eligible for payment of tax under Section 8, irrespective of the fact whether the dealer was carrying on business during that year without registration. Subject to the said limited benefit conferred under clauses (a) and (b) of the proviso, it was categorically held that, a dealer had no right to claim retrospective registration, by making an application for correction of the certificate of registration. From the above, it is clear that the above decision does not come to the rescue of the petitioner, who claims the benefit of input tax credit without being a registered dealer as on 31-3-2005. 10. Coming to (44) VST 100, it was a case where the petitione
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tance, that the case projected by the dealer was entertained and appropriate relief was extended, which does not support the case of the petitioner in any manner; for the plain reason that Section 11 (12) and 11 (13) make it explicitly clear that the benefit contemplated therein can be claimed only by a 'registered dealer' and never by anybody else. 11. Yet another important aspect to be considered is as to the 'identity' of the person concerned. Admittedly, the business was being run earlier, as a 'proprietorship concern' by one Mr. K.K. Abraham, who expired on 23-11- 2004. It is also conceded in the writ petition that, on his demise, a partnership deed was executed with the widow of the deceased, three daughters and the husbands of the daughters as aforesaid, as the partners and the business was taken over accordingly. It was much later, that the present partnership came into existence by re-constituting the firm, excluding 'five' erstwhile partners an
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