2026-VIL-403-MAD
  1. Home
  2. 2026-VIL-403-MAD

VAT High Court Cases

Tamil Nadu VAT Act, 2006 - Reversal of Input Tax Credit availed for purchase of spare parts for assembling windmills - The ITC availed for the purchase of spare parts for assembling windmills was adjusted against the VAT payable for the sale of old windmills. The Assessing Officer reversed the ITC on the ground that the inputs (spares for windmills) were used exclusively for generating electricity, which is a commodity exempted from tax, and therefore, the adjustment of ITC is not permissible – Whether the petitioner is required to reverse the Input Tax Credit under Section 27(2) of the TNVAT Act, 2006 on spare parts for assembling windmills – HELD - The issue in the case is whether the ITC availed for the purchase of windmills and spares, to replace the old windmills, can be adjusted towards the VAT payable for the sale of old windmills as output, or the output is the commodity (i.e., the electricity produced with the aid and help of windmills) - The petitioner, through its reply, made out a case that the Input Tax Credit paid for the purchase of windmill spares and for replacing the old windmills alone have nexus to each other and the VAT paid for the sale of the old windmills should be treated as the output. If the case of the department is otherwise, it should have been spelt out in the show cause notice itself. However, neither in the SCN nor in the order of the Assessing Officer or the Appellate Authority the issue whether the input tax credit sought to be adjusted to the sale of electricity or to the sale of the old windmills, has been discussed - The show cause notice suffered from an incurable defect as it drew a preposterous analogy that the windmill remains with the owner, ignoring the fact that the owner had sold the old windmills and sought adjustment only in respect of the old windmill. If the Department now wants to rectify the said defect, it should necessarily issue a fresh SCN, which would be barred by limitation under Section 27 of the TNVAT Act - A mere remand of the matter back to the Assessing Officer to draw a fresh assessment order based on the instant SCN will be a futile exercise. If the fresh SCN is issued, it will be hopelessly barred by limitation. Either way, the department cannot succeed. Accordingly, the tax case is allowed
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GSTAT Appeal filed wrongly...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?