High Court held appellant dealer was entitled to ITC u/s 9(1)(b)

1. M/s Jaishree Exports was a dealer registered and a recognized export house exporting rice.

2. It purchased packing material for packing the rice, without payment of sales tax on the strength of its registration by furnishing declarations in for ST-1/ST-49/Form-H.

3. After the coming into force of the VAT Act, w.e.f. 1.4.2005, the packing material was being purchased by the appellant on payment of VAT and the input tax was being claimed as a refund.

4. Subsequently, Commissioner, VAT gave a ruling that packing material can be purchased against Form-H also.

5. Appellant claimed input tax credit and asked for refund of the input tax on the ground that the packing material was used to pack rice which was exported.

6. VATO rejected the claim of the appellant.

7. Joint Commissioner and Tribunal, VAT rejected appellant’s appeal.

High Court, on appeal, held as under:

8. It cannot be disputed that the packing materials purchased by the appellant are used for packing rice which are exported out of India.

9. In such a factual situation, the VAT authorities were not justified or correct in law in holding that the appellant-dealer was not entitled to the tax credit in respect of turnover of purchases of the packing material in the tax period under dispute.

10. We hold that the appellant dealer is entitled to the input tax credit on the purchase of packing material by virtue of Section 9(1)(b) of the Act.

Case Reference - JAISHREE EXPORTS Versus COMMISSIONER TRADE & TAXES.

IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 5th January, 2012.

Date of Decision: 23rd February, 2012

STA 11 and 12/2011