In Brief
This case involves multiple appeals by registered dealers challenging the retrospective application of Section 19(20) of the Tamil Nadu Value Added Tax Act, 2006, which reverses input tax credit (ITC) when goods are sold below purchase price. The dealers purchased goods with ITC, then sold at lower prices after receiving discounts, claiming credit based on the net price. The Supreme Court held that while Section 19(20) is constitutionally valid prospectively, it cannot apply retrospectively from January 1, 2007, as it deprives dealers of vested rights accrued during that period. The Court confirmed ITC must be computed using the original tax invoice price, not net price after discount, and emphasized that ITC is a statutory concession requiring strict compliance with conditions—not an inherent right. The appeals were partly allowed by striking down the retrospective amendment while upholding the provision's prospective validity.
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