In Brief
TVS Motor and other motor vehicle manufacturers challenged provisions of the Tamil Nadu VAT Act denying Input Tax Credit (ITC) on inter-State sales without Form C declaration, arguing they violated constitutional rights to equality and free trade. The Supreme Court upheld the VAT Act provisions, holding that ITC is a statutory concession—not a right—and can be conditioned on requirements like Form C to prevent tax evasion. However, the Court modified the ruling: dealers making sales exclusively to State Governments outside Tamil Nadu may claim ITC without Form C if they provide a certificate from the purchasing State Government, since governments pose no tax evasion risk.
The lawyer headnote and full judgment text are available to registered users.