SARA LEATHERS Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) APART from this common issue, W.P.Nos.10736 to 10739 of 2009 relates to a question regarding input tax credit on the "paper board" used by the petitioner as insole for the shoes exported. The assessment in W.P.Nos.10736 to 10739 and 17313 to 17316 of 2009 relate to the period January, 2007 to June, 2007 and the assessment with respect to W.P.No,20185 of 2009 relates to July, 2007 to September, 2007.

(2.) THE contention of the petitioner herein is that the petitioner is a registered dealer carrying on business in leather goods and exporting the same. THE petitioner is an assessee on the file of the respondent under the provisions of the Act. THE petitioner states that in respect of the assessment years 2006-07, 2007-08 and 2008-09, while issuing the refund voucher in Form P, the respondent restricted the claim of the petitioner at 50% of the total refund without proper adjudication and calling for the records. THE petitioner's contention is that the tax paid by the petitioner in respect of raw materials were appropriated towards penalty under Section 42 of the Act, which is under challenge in W.P.Nos.10736 to 10739 of 2009. THE petitioner submits that having accepted the assessment with the proper rate of tax in respect of capital goods purchased and used as input, the respondent should not have restricted the claim at 4% that the difference available at 8.5% has to be refunded to the petitioner and the respondent has gone against the provisions of the Act and adjusted the amount towards penalty in the subsequent year. In this regard, learned counsel for the petitioner places reliance on Section 18 of the Act particularly to Section 18(2).

(3.) GOING by the said provisions of the 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.