2011 PLP (Trib (PTD)

These Sales Tax Appeals have been filed by the taxpayer. The same are against the order of the Collector (Appeals) recorded by him vide Order No.804-810 of 2009 dated 23-2-2008. The issues involved basically are two. However, one issue is common in respect of all the appeals while in S.T.A. No.257/LB of 2009 there is another issue. The common issue in all the appeals is disallowance of input tax paid by this assessee on purchase of diesel. The brief facts with regard thereto are that the taxpayer claimed adjustment of input tax deducted by his supplier at the time of supply of diesel which has subsequently been used by him in generation and start up of the machinery of its Textile Unit. The fact that the said diesel has been used for business purpose is not disputed. The objections of the department on the basis of which input claim has been disallowed are as follows:-- (i) That the application has been filed late; hence is time-barred. (ii) That the diesel is a part of the negative list and hit by S.R.O No.578(I)/98 dated 12th June, 1998. The AR in his rebuttal firstly produced before us acknowledgement receipt of the claim made by the assessee on Ist October, 2002. The said receipt has been issued by the concerned officer and it confirms that the assessee has filed its claim though manually in time. Subsequent formation of R.C.P.S (Refund Claim Preparation Software) cannot de-bar the taxpayer from the claim which he has already made. Further, the diesel has been excluded from the negative list through S.R.O. No.490(I)/2004 dated 12-6-2004. Not only that the SRO has subsequently been followed by the department under the instructions from the C.B.R. but the learned Tribunal has also issued directions to allow input tax on diesel. In this regard the instructions issued by the C.B.R. vide C. No.2(1)ST-L&P/2000(Pt.) dated 21st December, 2005 and the judgments of the then Customs, Federal Excise and Sales Tax Appellate Tribunal in terms of S.T.A. No.839/LB of 2005 and S.T.A. No.246/LB of 2006 are also referred with advantage. After going through the arguments as well as the case-law produced, this court does not have doubt in its mind that the diesel used in production and manufacturing of a product on which the assessee is liable to pay sales tax is equally important ingredient like other such purchases. The tax charged thereon should always be allowed provided the taxpayer has fulfilled the other legal requirements including provided under section

73. The filing of claim is a procedural act. If the assessee has made a manual application even after introduction of the Software unless there is any specific exclusion, the taxpayer should not be deprived of his claim for having not complied the requirements of the said Software. The department should not reject the said application and rather ask the taxpayer to comply with the requirements thereof and then allow the necessary input tax etc. The application filed by the taxpayer manually, therefore, is held to be in time and the rejection on the basis thereof is held to be as illegal. The department is directed to allow input tax adjustment on diesel in respect of all the years and to do consequential acts forthwith. The other issue that the claim was time-barred is also covered by the argument that the same was made manually filed within time. Since the said issue has already been disposed of by us in the upper part of this order, the same shall apply on this issue as well. The assessee appeal on this issue also stands allowed in the manner and to the extent mentioned above. H.B.T./140/Tax(Trib.) Appeal allowed.