Input Tax Credit would not be available for the period from date of commencement of business until Registration is granted.

Case Details:

Issue- In the above case, the petitioner, a dealer under the Kerala Value Added Tax Act, 2003 concerned with the assessment year 2005-06; specifically claims input tax credit between 2-2-2006 which is the alleged date of commencement of business and 8-2-2006 which is the date of registration. The question arises before Hon’ble Court was that Whether the Tribunal was justified in denying the benefit of the first proviso to Section 16(2) for claiming input tax credit and thus rejecting the claim of input tax credit from the date of commencement of business.

Held- It was held that a dealer had no right to claim retrospective registration, by making an application for correction of the certificate of registration. Also, a reading of Section 11 would indicate that only a registered dealer would have the benefit of input tax credit. The benefit conferred under the proviso to Section 16(2) as substituted in the statute book in 2009 only grants benefit for payment of tax under Section 6(5) and exercising an option for payment of tax under Section 8. The benefit of input tax credit does not flow necessarily from the proviso as substituted in 2009. In such circumstances, we reject the revision filed by the petitioner answering the question in favour of the Department and against the petitioner