- (1.) The present Sales Tax Revision Petition has been filed by the assessee-appellant against the judgment dated 7.6.2010 of the learned Rajasthan Tax Board, Ajmer passed in Tax Appeal No. 13/2008/Udaipur by which order, the learned Tax Board has reversed the order dated 30.6.2007 of the learned Deputy Commissioner (Appeals), Udaipur and affirmed the order dated 19.1.2007 passed by the Assessing Authority holding the assessee liable for payment of tax to the tune of Rs. 3,40,868/-. The controversy in hand is about allowing of the input tax credit of the tax suffered on the raw material lying in opening as on 1.4.2006 stock as per Section 19 of the Rajasthan Value Added Tax Act, 2003 ('the Act of 2003') which was enforced in the State of Rajasthan w.e.f. 1.4.2006. The input tax credit is allowable of the tax paid on the raw-materials and other goods used for production of the finished goods by the assessee against the tax payable on the sale of finished goods by him.
(2.) Section 19 of the VAT Act substituted by Act No. 4 in the year 2006 w.e.f. 1.4.2006 reads as under. "19. Input tax credit for stock on the date of commencement of this Act.- Input tax credit shall be allowed on the goods other than capital goods, which had suffered tax under the repealed Act, and are lying in stock of the dealer on the date of commencement of this Act, provided that such dealer has submitted the details of such stock, as required by the Commissioner under Section 39 of the repealed Act or Section 19 of this Act, and such goods in stock are used for the purpose specified in clause (a) to (f) of sub-section (1) of Section 18. However, the input tax credit under this section shall be allowed to the extent of the tax paid under the repealed Act or the amount of tax payable on such goods under this Act, whichever is less."
(3.) The learned Assessing Authority, however, replying upon a Circular issued by the Head of the Department namely, the Commissioner of Commercial Taxes, on 1st July, 2006 refused the input tax credit to the assessee vide the Assessment Order dated 19.1.2007 (Annex. 1). The relevant clause (8) of the said Circular dated 1.7.2006 issued by the Commissioner of Commercial Taxes, as relied upon by the Assessing Authority, is quoted herein below for ready reference:-;