HINDUSTAN UNILEVER LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS revision is preferred against the order passed by the Sales Tax Appellate Tribunal, Hyderabad (for short, "the Tribunal") in T.A. No. 185 of 2009 dated October 21, 2009. The petitioner herein, a registered dealer on the rolls of the Assistant Commissioner, Hyderabad, is engaged in the manufacturing and trading of consumer goods. It has several depots and six manufacturing units in the State of Andhra Pradesh at (1) Ghatkeswar, Hyderabad, for manufacturing tea, (2) Pamaru Maria Exports, Vijayawada, for export of shrimps, (3) Sudha Agro, Adoni, for exporting castor oil, (4) Jitendra Roller Flour Mill, Hyderabad, for manufacturing Annapurna atta, (5) Rayalaseema Alkalies, Kurnool, for manufacturing refined glycerine, and (6) JOCIL Ltd., Guntur, for manufacture of soap noodles.

(2.) IT is not in dispute that the petitioner has a common TIN registration for all its manufacturing and trading divisions in the State of Andhra Pradesh; and the turnover of sales, branch transfers and input -tax credit of each division is consolidated, and input -tax credit is being claimed thereupon. The Deputy Commercial Tax Officer, Madhapur Circle, assessed the petitioner to tax. With regards the petitioner's claim for input -tax credit for the JOCIL unit, the assessing authority applied rule 20(6) of the Andhra Pradesh Value Added Tax Rules (for short, "the Rules") on the ground that it was a case of specific input for specific output; and as the entire output of stock was transferred outside the State, without there being any taxable transaction, the petitioner was ineligible for input -tax credit in respect of the local purchases of inputs. He rejected the petitioner's claim that the formula, A x B/C, should be applied. Aggrieved thereby, the petitioner preferred an appeal before the Appellate Deputy Commissioner and, on the said appeal being dismissed, they carried the matter in further appeal to the Sales Tax Appellate Tribunal.

(3.) BEFORE us Sri S. Dwarakanath, learned counsel for the petitioner, would rely on a Division Bench judgment of this court in Maxwroth Plywoods Private Limited v. Assistant Commissioner (CT) : [2013] 62 VST 573 (AP); [2012] 54 APSTJ 178; and the order of the STAT which was confirmed in TRC No. 9 of 2013 dated July 4, 2013, to contend that, as the petitioner has a common TIN number for all its divisions, they are entitled to claim input -tax credit for all the divisions as a whole; there is no statutory provision which enables the assessing authority to restrict input -tax credit division wise; rule 20(6) of the Rules, whereunder specific inputs are meant for specific outputs, is applicable only if the dealer exercises his option to claim input -tax credit separately for taxable goods; only when they are able to establish that the specific inputs are meant for specific outputs, can the assessee claim the benefit of rule 20(6); the words "able to establish" in rule 20(6) shows that it is at the option of the assessee; it is for the assessee to exercise his option whether or not he should claim input -tax credit in terms of rule 20(6) of the Rules; and it is not open to the assessing authority to deny the petitioner input -tax credit only on the ground that specific inputs in a division were meant for specific outputs in that particular division.