2022-VIL-548-KER

VAT High Court Cases

Kerala Value Added Tax Act – Section 41 KVAT Act, 2005 – Rule 59 of KVAT Rules, 2005 – Sales Return - Issuance of credit notes and debit notes - Whether credit note counter signed by the customer (unregistered dealer) is sufficient to establish that goods have been returned and claim credit of the tax – HELD – While it is not at all difficult to determine the veracity of sales return and the consequential claim for credit in respect of transactions between registered dealers, the Rules do not prescribe a detailed of procedure or format in which the sales return and consequential credit of tax paid must be claimed in respect of transactions with persons who are not registered dealers - The second proviso to Rule 59 only provides that the dealer must obtain an acknowledgment. However, where the Department wishes the verify the veracity of such claim for credit even when it is supported by an acknowledgment, as provided for in the second proviso, it will be always incumbent on the dealer to ensure that the claim for credit on account of sales return is also reflected or supported by other documents such as stock register and sales return ledger which has necessarily to tally with the acknowledgment obtained on credit notes in terms of the second proviso to Rule 59 - the assessing authority to reconsider the matter after verifying the stock register and the details regarding repayment of amounts to the credit of the customer which will be produced by the customer in respect of each of the transactions – impugned order is set aside – writ petition is allowed by remand

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