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2022 DIGILAW 279 (RAJ)

Bhagwati Jewellers v. The Assistant Commissioner

2022-01-28

BIRENDRA KUMAR, MANINDRA MOHAN SHRIVASTAVA

body2022
ORDER 1. This revision petition under Section 84 of the Rajasthan Value Added Tax Act, 2003 (hereinafter referred to as 'the Act of 2003') is directed against the order dated 17.12.2021 passed by the Rajasthan Tax Board, Ajmer (hereinafter referred to as 'the Board') whereby petitioner's claim of input tax credit has not been accepted, affirming the order of the Assessing Officer. 2. The petitioner by this revision petition has assailed only that part of the order by which the input tax credit has not been allowed. 3. Learned counsel for the petitioner would argue that as far as claim of input tax credit is concerned, it is governed by provision contained in Section 18 of the Act of 2003 read with Rule 18 of the Rajasthan Value Added Tax Rules, 2006 (hereinafter referred to as 'the Rules of 2006'). Learned counsel for the petitioner would argue that as the input tax credit is available in respect of the event of purchase of any taxable goods from a registered dealer under Section 18 of the Act of 2003, such benefit could not be disallowed by taking recourse to the provision contained in Section 72 of the Act of 2003 read with Rule 38 of the Rules of 2006 as they are not applicable in respect of a purchaser but will apply only in case of a seller. 4. The Board has disallowed claim of input tax credit on the ground that the petitioner has not fully complied with the requirements of Sub-Rule (1) and Sub-Rule (2) of Rule 38 of the Rules of 2006. 5. Input Tax Credit is available to registered dealers, other than the dealers covered by Sub-Section (2) of Section 3 or Section 5 of the Act of 2003, in respect of purchase of any taxable goods made within the State from a registered dealer to the extent and in such manner as may be prescribed for the purposes exhaustively incorporated in the provision itself. 6. Rule 18 of the Rules of 2006 amongst various provisions provides computation of input tax credit and provides that the input tax credit shall be allowed on the basis of original VAT invoice and where such invoice has been lost or destroyed, on the basis of duplicate copy thereof issued to the registered dealer in accordance with Sub-Rule (4) of Rule 38. The Rule, further, provides for allowing claim of input tax credit of the additional tax deposited on the basis of VAT invoice which has been issued subsequently in compliance of the decision of any competent court or authority, showing the tax at a higher rate. 7. However, Section 72 casts obligation on the registered dealer to issue VAT invoice as below:- '72. Registered dealers to issue Vat invoice.- (1) A registered dealer, other than who opts for payment of tax under sub-section (2) of section 3 or section 5 shall issue for each sale, except the sale of exempted goods, made by him, a VAT invoice in such manner as may be prescribed. (2) Where any dealer, contravenes the provisions of sub-section (1), the assessing authority or the officer authorised by the Commissioner may, after giving such dealer a reasonable opportunity of being heard, direct him to pay by way of penalty a sum equal to double the amount of tax leviable on the sale of goods in respect of which an invoice has not been issued.' 8. Sub-Rule (1) of Rule 38 of the Rules of 2006, framed to carry out the purposes of Section 72 of the Act of 2003, casts obligation on a registered dealer, other than registered dealer who opts for payment of tax under Sub-Section (2) of Section 3 or under Section 5, making a taxable sale to issue a VAT invoice marked as original to the purchaser for each such sale made by him and further obliges him to retain a copy thereof. 9. Sub-Rule (3) of Rule 38 of the Rules of 2006 clearly provides that no input tax credit shall be allowed unless the dealer makes full compliance of Sub-Rule (1) and Sub-Rule (2). Rule 38 of the Rules of 2006 is reproduced as below:- '38. Issuance of an Invoice. - (1) A registered dealer, other than registered dealer who opts for payment of tax under sub-section (2) of section 3 or under section 5, making a taxable sale shall issue a VAT invoice marked as original to the purchaser for each such sales made by him and shall retain a copy thereof. Issuance of an Invoice. - (1) A registered dealer, other than registered dealer who opts for payment of tax under sub-section (2) of section 3 or under section 5, making a taxable sale shall issue a VAT invoice marked as original to the purchaser for each such sales made by him and shall retain a copy thereof. (2) The VAT invoice issued under sub-rule (1) shall contain the following particulars on the original as well as on all the copies thereof.- (a) the word "VAT INVOICE" and in case the option under subsection (7) of section 4 has been exercised the expression "INVOICE FOR TAX ON MRP" in bold letters at the top or at any prominent place; (b) the name, address and registration number of the selling dealer; (c) the name and address of the purchaser and where the purchaser is registered under the Act the registration number of the purchasing dealer; (d) continuous serial number running throughout the year and the date on which the VAT invoice is issued; (e) full description of the goods; (f) the quantity or number, as the case may be, of the goods; (g) the value of the goods sold; (h) the rate and amount of tax charged thereon indicated separately; and (i) signature of the selling dealer, or his declared business manager or person authorized by the selling dealer. (3) No input tax credit shall be allowed unless the dealer makes full compliance of sub-rule (1) and (2). (4)(a) In case a VAT invoice issued by the registered selling dealer, is lost or destroyed, a duplicate of such VAT invoice shall be issued by the selling dealer, to the purchasing dealer with the following declaration recorded in the red ink and signed by the selling dealer or his declared business manager as the case may be:- Declaration "I, hereby declare that this is the duplicate VAT invoice of VAT invoice No..........issued on dated........and issued to M/s............. having registration No.......... Signature Status............". (b) The purchasing dealer who has obtained the duplicate copy of the VAT invoice shall inform his assessing authority or the authorized officer within the tax period in which the duplicate invoice was received. having registration No.......... Signature Status............". (b) The purchasing dealer who has obtained the duplicate copy of the VAT invoice shall inform his assessing authority or the authorized officer within the tax period in which the duplicate invoice was received. (5) A registered dealer, who has opted for payment of tax under sub-section (2) of section 3 or under section 5, sells taxable goods of value exceeding rupees five hundred in any one transaction, shall issue an invoice marked as original to the purchaser for each such sale made by him and shall retain a duplicate copy thereof. (6) Notwithstanding anything contained in sub-rule (5), where a purchaser demands an invoice irrespective of the purchase value, the registered dealer shall issue invoice. (7) The invoice issued under sub-rule (5) shall contain the following particulars on the original as well as on all the copies thereof.- (a) the word "invoice" in bold letters at the top at any prominent place; (b) the name, address and registration certificate number of the selling dealer; (c) continuous serial number running throughout the year and the date on which the invoice is issued; (d) full description of the goods with its value; and (e) signature of the selling dealer, or his servant, manager or agent duly authorized by him. (8) Notwithstanding anything contained in sub-rule (1) above, where a dealer registered under the Act is also registered under the Central Excise Act, 1944 (Act No. 1 of 1944) and issues an invoice for removal of goods in the course of inter-State trade or commerce, containing the particulars as prescribed in sub-rule (2), it would be treated as VAT invoice and the provisions of sub- rule (3) and (4) shall mutates mutandis apply. (9) The State Government may, by notification in official Gazette provide for use of IT enabled systems for preservation of the details of the VAT invoice.' 10. The claim of input tax credit by a registered dealer is required to be examined taking into consideration not only Section 18 of the Act of 2003 providing for input tax credit, but also other provisions contained in the Act of 2003 as also the Rules framed under the Act of 2003. The claim of input tax credit by a registered dealer is required to be examined taking into consideration not only Section 18 of the Act of 2003 providing for input tax credit, but also other provisions contained in the Act of 2003 as also the Rules framed under the Act of 2003. While Section 18 of the Act of 2003 provides for input tax credit, Section 72 of the Act of 2003 read with Rule 38 of the Rules of 2006 provides contingencies when input tax credit may not be allowed. 11. On the face of clear provision contained in Rule 38, Sub-Rule (3) of the Rules of 2006, the claim of input tax credit, which is otherwise available under Section 18 of the Act of 2003, may be disallowed as the mandate of law is clear that unless the dealer makes full compliance of Sub-Rule (1) and Sub-Rule (2) of Rule 38 of the Rules of 2006, input tax credit shall not be allowed. The provisions contained in Section 18 of the Act of 2003, Rule 18 of the Rules of 2006 as also Section 72 of the Act of 2003 and Rule 38 of the Rules of 2006 had to be read conjointly and not in isolated manner. 12. The view which has been taken by the Board is based on the provisions contained in Section 72 of the Act of 2003 read with Rule 38 of the Rules of 2006. It is petitioner's own admission and undisputed fact that various cash transactions were made and the authorities found that invoices in respect of various transactions were not issued. 13. We, therefore, do not find any ground to interfere with the impugned order in exercise of our revisional jurisdiction under Section 84 of the Act of 2003. The revision petition is, therefore, dismissed.