Punjab VAT Tribunal
in The 21st Century Builders and Engineers vs State of Punjab VSTI
2013 17 C-388 has held that input tax credit cannot be disallowed merely on the
technical ground that VAT has not been charged separately in VAT invoice, when
tax charged on such VAT invoice is duly deposited by the seller.
There are two types of invoice under Punjab VAT Act, 2005
one is VAT invoice and other is Retail invoice. Input Tax Credit is always
available only against VAT invoice. Rule 54 of the Punjab VAT Rules, 2005 deals
with the particulars to be mentioned in the VAT invoice. One of the
requirements of Rule 54 is that VAT invoice should contain the details
regarding the rate and amount of tax charged in respect of taxable goods.
The ITC was disallowed by the designated officer on the
ground that as per Punjab VAT Rules, VAT is required to be charged separately
in the VAT invoice, so no ITC is allowable against VAT invoices which are
inclusive of VAT.
However Punjab VAT
Tribunal on appeal held as under:
“Obviously, the ITC has been disallowed to the
appellant-assessee in respect of the VAT invoices issued by M/s Munish Iron
Store, Mohali, which has issued the above-referred certificate. Rule 54 of the
Punjab VAT Rules, 2005 deals with the Particulars to be mentioned in the VAT
invoice. These Rules do not contemplate
that I.T.C is not allowable against invoices which are inclusive of VAT.
The sales have been shown by the seller in his returns. I.T.C has been
disallowed simply on a technical violation that the VAT has not been separately
charged in the VAT invoice. The substantial justice is preferred when pitted
against technicalities. The goods have suffered tax, which has been deposited.
In view of the above discussion, this appeal is accepted and
the orders passed by both the authorities below are set aside.”
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