Judgment :- 1. Heard Mrs. R.Hemalatha, learned counsel for the petitioner and Mr.Manoharan Sundaram, learned Government Advocate (Tax), appearing for the respondents. 2. The petitioner-Company calls in question, the orders of the respondent in TIN No.33663182153/2007-08, dated 10.12.2008 and 16.09.2008, seeking to quash the same in so far as it restricts the claim of refund of ITC made by the petitioner as per the application filed in Form-W, dated 30.09.2008 and 20.06.2008. 3. The case of the petitioner is as follows:- a) The petitioner-company herein is a registered 100% Export Oriented Unit (EOU) and an assessee on the file of the respondent herein bearing TIN No.33663182153 and is inter-alia engaged in the business of export of Made-ups and Fabrics to other countries. For the purpose of the said export, the petitioner herein purchases raw materials and capital goods on payment of VAT and they are used in the manufacture of final products that are then exported outside India. (b) On receipt of Form-W filed by the petitioner-company on 30.09.2008 and 20.6.2008, the respondent issued them with notices, dated 14.11.2008 and 10.9.2008 proposing to reject their claim of ITC on various pretexts. The minor issue raised by the respondent was with regard to the discrepancy in the purchase invoice supplied by the petitioner containing incomplete information on the rate of tax and the actual tax payable. The core issue was with regard to the proposal of the respondent to restrict the petitioner's claim of ITC to 4% on the purchase of capital goods that have been purchased on payment of 12.5%. (c) With regard to the issue of restricting the claim of ITC to 4% from the actual 12.5%, the petitioner-company had submitted detailed replies, dated 17.11.2008 and 12.9.2008 contending that the purchases effected by them were water treatment plants and its accessories that are vital capital goods installed in the manufacturing process that enable production of the final product that are eventually exported outside the country. It is not in dispute that 12.5% VAT had been paid and collected by the seller of the petitioner-company and it is also a fact that their sellers had duly reported the same to the Department, vide their monthly Returns and hence, the proposal to restrict the petitioner's claim to a mere 4% may not be right for the reason that they would be discriminated on the taxable issue and further, the Government cannot be unjustly enriched to the prejudice of the petitioner. (d) The respondent on receipt of the petitioner's replies, dated 17.11.2008 and 12.9.2008, chose to allow the claim of ITC only in respect of the minor issue raised supra and with reference to the core issue of dis-allowing the claim of refund on the ITC claimed, the respondent over-ruled their reply by stating that the petitioner-company had violated the provisions of section 3(2) of the Tamil Nadu Value Added Tax Act (for short, 'the TNVAT Act') by paying 12.5% tax instead of 4% that was actually payable and further contended that their sellers who had charged 12.5% in their sale invoices would also be permitted only 4% by their respective jurisdictional authorities. In fine, the respondent stated that the excess amount collected from the petitioner-company and paid over into the Exchequer by their sellers would be liable to forfeiture under section 40(1) of the TNVAT Act. (e) On the above score, the respondent passed the impugned proceedings restricting the claim of refund sought only to 4% as against the actual 12.5% incurred by the petitioner-company, thereby resulting in a highly illegal and arbitrary order passed under section 18 of the TNVAT Act. The impugned proceedings of the respondent is ex-facie illegal and cannot be sustained. (f) The statutory remedy of revision is highly inefficacious and onerous, given the fact that the Revisional Authority has no powers to grant absolute stay except on furnishing of security and given the precarious financial position of the petitioner-company, the petitioner approached this Court for the above relief. 4. The respondent has filed counter affidavits, inter-alia stating that the petitioner-Company is a registered dealer under the TNVAT Act, engaged in manufacture and export of cotton made-ups. Their unit is a 100% Export Oriented Unit. 4. The respondent has filed counter affidavits, inter-alia stating that the petitioner-Company is a registered dealer under the TNVAT Act, engaged in manufacture and export of cotton made-ups. Their unit is a 100% Export Oriented Unit. They have filed Form W along with relevant records, claiming refund of I.T.C. The restriction in the claim of refund was made as the tax paid on the purchase of capital goods, its spares and other components and consumables was higher rate i.e. 12.5% instead of actual rate at 4%. The petitioner was given opportunity before passing the order of refund. The petitioner failed to pay the actual VAT due on the commodities purchased by them which is not in accordance with law. The petitioner should seek remedy by filing Revision Petition as provided under Section 54 of the TNVAT Act. There is no cause for demanding any payment of tax or furnishing of security before the Revisional Authority as stated by the petitioner-dealer. 5. I have heard the learned counsel appearing for the parties and perused the material documents available on record. 6. I do not agree with the stand taken by the respondent herein. It is worthwhile to quote the provisions of Section 18 of the TNVAT Act, particularly Section 18(1) and (2): "18. Zero rating.- (1) The following shall be zero rate sale for the purpose of this Act, and shall be eligible for input tax credit or refund of the amount of the tax paid on the purchase of goods specified in the First Schedule including capital goods, by a registered dealer in the State, subject to such restriction and conditions as may be prescribed: (i) A sale as specified under sub-section (1) or (3) of section 5 of the Central Sales Tax Act, 1956; (Central Act 74 of 1956) (ii) Sale of goods to any registered dealer located in special economic zone in the State, if such registered dealer has been authorised to establish such units by the authority specified by the Central Government in this behalf; and (iii) Sale of goods to international organisations listed out in the Fifth Schedule. 18 (2) The dealer, who makes zero rate sale, shall be entitled to refund of input tax paid or payable by him on purchase of those goods, which are exported as such or consumed or used in the manufacture of other goods that are exported as specified in sub-section(1), subject to such restrictions and conditions as may be prescribed." 7. Going by the said provisions of the TNVAT Act, while Section 18(1) gives the details about the zero rating under certain stated circumstances, sub-section (2) deals with the right of a dealer, who makes a zero rating sale for a refund of the input tax paid or payable by him on purchase of those goods which are exported as such, or consumed or used in the manufacture of exported goods as specified under sub-section (1). Sub-section(3) provides for a default clause that where the dealer has not adjusted the input tax credit or made a claim for refund within a period of 180 days from the date of accrual of such ITC, the same shall lapse to the Government. 8. Given the fact that the choice of an adjustment of the input tax credit is given to the assessee, the question of a suo-motu adjustment by the Revenue, hence, does not arise, more so, when an assessee seeks a refund of the ITC as provided for under subsection (2). It is admitted that the petitioner had in fact paid the tax at 12.5% which could not be refuted by the seller. If there had been a charging of tax by the seller when effected the sale to the purchaser at the rate over and above what is payable under the TNVAT Act, all that the Revenue could do is to proceed against the seller of the goods for charging the purchaser at a rate not legally sustainable. Equally so, unlike in the earlier provisions of the Repealed Act, once the purchaser proves as regards the actual payment of tax at a rate which is not as per the provisions of the TNVAT Act, the question of proving the passing on of the liability does not arise. The provisions contained under Section 19 of the TNVAT Act relating to input tax credit, hence, herein assumes significance in considering the claim of refund under section 18(2) of the TNVAT Act. The provisions contained under Section 19 of the TNVAT Act relating to input tax credit, hence, herein assumes significance in considering the claim of refund under section 18(2) of the TNVAT Act. In the circumstances, going by the very provisions of Section 18(1) of the TNVAT Act, given the fact that the sale by the petitioner is zero rated and that the petitioner is entitled to the benefit of Section 18(2) of the TNVAT Act for the refund of the input tax paid on the purchase of goods under the stated circumstances, the petitioner's claim for refund of amount paid as per the assessment order has to be given in toto without any adjustment whatsoever. 9. The learned Additional Government Pleader appearing for the respondent submitted that having regard to the wording in Section 18(2) "input tax paid, payable" it stands to reason that what has been remitted to the Government, has to be returned back only to the remitter of the tax and in this case, the petitioner not being a person who had remitted the tax to the Government, the refund could not be ordered and hence he supports the order of the authority concerned. 10. I do not agree with the contention of the learned Additional Government Pleader, who overlooks the fundamental fact of difference between the earlier Act and the present Act that when the ITC claim clearly shows that the purchaser had paid the tax at 12.5%, the question of the seller coming forward before the authority concerned as regards the collection of tax or as to the proof on the passing of liability, does not arise. The learned Additional Government Pleader contended that section 18(2) does not have any restrictive words to mean that the "dealer" could refer only a purchaser to grant a refund. I reject this line of contention outright, as going by Section 18(2) of the TNVAT Act, which is very emphatic in its wording, that the dealer referred to therein to claim a refund is one who had paid the tax on purchase of those goods that are exported and such consumed goods used in the manufacture of other goods which are exported and are specified under sub-section (1). Hence, given the fact that the zero rating of tax is as per Section 18 of the TNVAT Act and the same is only at the hands of a purchasing dealer of goods and not at the hands of the seller, who sells the capital goods, the acceptance of the stand of the Department would only amount to either ignoring Section 18 or cutting down the width of Section 18, for that matter, even to overlook Section 19 of the Act. 11. In the circumstances, I do not accept the submission of the learned Additional Government Pleader that the petitioner, who is a purchaser of the capital goods, is not entitled to have the benefit of total refund of the amount. The provisions of Section 18(2) of the TNVAT Act have to be given its full thrust and consequently, I reject the plea of the learned Additional Government Pleader. In the circumstances, the claim of the petitioner as regards the refund of tax without any reduction has to be accepted. 12. Learned counsel for the petitioner relied on a decision of this Court reported in 2010 (30) VST 581 (Mad) (Sara Leathers Vs. Commercial Tax Officer), wherein, in identical circumstances, this Court allowed the Writ Petitions with regard to the rejection of refund of tax alone, by the authority. 13. Following the same, the impugned orders as regards rejection of refund of tax alone, are set aside. Consequently, the Writ Petitions are allowed to the extent indicated above. No costs. The connected miscellaneous petitions are closed.