2023-VIL-660-MAD
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VAT High Court Cases

Tamil Nadu VAT Act, 2006 – Input Tax Credit on Capital goods - Eligibility of input tax credit on generator, folk lift and crane hoist – HELD - Prima facie, it appears that the items in question viz., generators, folk lifts and crane hoist are capital goods within the meaning of Section 2(11) of TNVAT Act, 2006 and therefore input tax credit availed by the petitioner are in order. To deny the input tax credit on “capital goods” there should be materials available before the respondents to substantiate that these goods do not satisfy the definition of “capital goods” and were not used for manufacturing of final products - The input tax credit on “capital goods” under the TNVAT Act 2006 are inspired for Cenvat credit Rules 2004 framed under the Central Excise Act, 1944 - The Supreme Court has been liberal in allowing the input tax credit and on the capital goods under the provisions before the erstwhile Central Excise Act, 1944 and thereafter under the provisions of the CENVAT Rules, 2004 - Unless the department establishes that these goods were not used in the manufacturing of final products or was used in the manufacturer is exempted, denial input tax credit to the petitioner cannot be justified - considering the facts that the impugned orders were passed without reasons, the impugned orders are set aside and matter remanded back to the respondents to pass appropriate orders on merits and in accordance with law - The respondents may depute an officer to examine whether these goods were indeed put to use for in the manufacture of final products for the purpose specified in Section 2(11) of TNVAT Act - the writs petitions are allowed by way of remand
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