VAT ITC Can Be Availed On Evaporation Loss Of Petrol, HSD: Punjab and Haryana High Court
The Punjab and Haryana High Court bench consisting of Justice Ajay Tewari, Justice Avnish Jhingan and Justice Pankaj Jain has ruled that the Input Tax Credit (ITC) under the Value Added Tax can be availed on the evaporation loss of petrol and High Speed Diesel (HSD).The respondent/assessee is in the business of running a petrol pump and is engaged in the purchase and sale of...
The Punjab and Haryana High Court bench consisting of Justice Ajay Tewari, Justice Avnish Jhingan and Justice Pankaj Jain has ruled that the Input Tax Credit (ITC) under the Value Added Tax can be availed on the evaporation loss of petrol and High Speed Diesel (HSD).
The respondent/assessee is in the business of running a petrol pump and is engaged in the purchase and sale of petroleum products. For the assessment year 2010–11, the assessment was finalised by the Excise and Taxation Officer-cum-Assessing Authority, allowing the claim of ITC.
The revisional authority revised the assessment, and the ITC for evaporation losses was reversed. The Tribunal accepted the contention of the dealer and allowed the appeal. It was held that the Assessing Authority rightly allowed the claim of ITC on evaporation. The review application filed by the state was dismissed by the Tribunal on May 4, 2018.
The Excise and Taxation Commissioner has appealed against the orders of the Tribunal. The Tribunal accepted the appeals and held that dealers were entitled to ITC on evaporation loss of petrol and high speed diesel.
Counsel appearing for the department contended that the issue was covered in favour of the appellant by the decision of the Division Bench of Punjab and Haryana Court in All Haryana Petroleum Dealers Association's case, in which it was held that the disposal of evaporated petrol and HSD was not by way of sale, hence the dealer was not entitled to ITC as per Entry 5 of Schedule E of the Act.
The court observed that the contention raised by counsel for the department had a fallacy because it was based upon circumstances mentioned in Entry 5 of the Haryana Value Added Tax Act, 2003, i.e., when the goods are disposed of otherwise than by way of sale. If the contention is accepted, it would result in adding circumstances to Entry 1 of Schedule E of the Haryana Value Added Tax Act, 2003.
Case Title: Excise and Taxation Commissioner, Haryana Versus M/s Gupta Brother, Bhiwani and another
Citation: 2022 LiveLaw (PH) 36
Case No.: VATAP-242-2018 & connected matters
Dated: 14.03 2022
Counsel For Appellant: Additional Advocate General Samarth Sagar
Counsel For Respondent: Advocate Sandeep Goyal