HINDUSTAN UNILEVER LIMITED Vs. STATE OF ANDHRA PRADESH
SALES TAX TRIBUNAL
HINDUSTAN UNILEVER LIMITED
STATE OF ANDHRA PRADESH
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N. Ratna Raju, Member (D) -
(1.) THIS appeal arises on the proceedings of the Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad, dated 29.11.08 (for short, 'the appellate authority') connected to the assessment of Value Added Tax in Form VAT 305, dated 29.3.2008 for the tax period beginning from April, 05 to September, 07 made by the Deputy Commercial Tax Officer, Madhapur Circle, involving disputed tax of Rs. 1,06,85,437/ - + disputed interest of Rs. 14,00,384/ -. Heard both sides.
(2.) THE learned advocate interceding for the appellant contended that the lower authorities had erred in restricting the input tax credit worked out division wise which is not contemplated U/s. 13 read with Rule 20 of AP VAT Act, 2005. In respect of the transactions with M/s. JOCIL Unit, Formula A X B/C, contemplated under second limb of Rule 20(6) is applicable and the figures to be adopted are relatable to the appellant company as one legal entity but not in respect of any unit or division. It is also contended that the appellate authority erred in denying the input tax credit in respect of JOCIL Unit on the ground that the goods were disposed of in a non -taxable manner following the advance ruling rendered by the Advance Ruling Authority in the case of M/s. Dhanalakshmi Cotton and Rice Mills, Guntur and the said ruling cannot bind either the appellant or the officers dealing with the assessment of the appellant. He finally submitted that from 1.4.2007 the appellant applied the formula in respect of its business divisions and in respect of JOCIL also. The formula was applied as in previous tax period. He urged to allow the appeal. On the other hand, the learned State Representative submitted that the appellant dealt in a variety of products through diversified manufacturing units and therefore the inputs of one manufacturing unit cannot be used for outputs of other manufacturing units and hence input tax credit has to be worked out unit wise or division wise as held by a plethora of advance rulings rendered by the Advance Ruling Authority under Sec. 67 of A.P. VAT Act, 2005. He urged that the appeal be dismissed.
(3.) AGAINST this back drop, the short questions that arise for adjudication of this appeal are as follows.
a) Whether working of input tax credit division wise is sustainable in the facts and circumstances of the case?
b) What are the statutory ingredients of an advance ruling?
c) Whether an Advance Ruling has the force of a precedent for its application in kindred circumstances?; and
d) What is the remedy an affected party is entitled to avail against an Advance Ruling?;
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