NEHA ENTERPRISES versus COMMISSIONER, COMMERCIAL TAX, LUCKNOW, UTTAR PRADESH

Citation: [2025] 5 S.C.R. 475 · Decided: 08-04-2025 · Supreme Court of India · Bench: PANKAJ MITHAL · Disposal: Dismissed

Judgment (excerpt)

[2025] 5 S.C.R. 475 : 2025 INSC 476
Neha Enterprises 
v. 
Commissioner, Commercial Tax, Lucknow, Uttar Pradesh
(Civil Appeal No. 6553 of 2016)
09 April 2025
[Pankaj Mithal and S.V.N Bhatti,* JJ.]
Issue for Consideration
Matter pertains to disallowance of the input tax credit claimed by 
the dealer. Whether the assessing officer correctly held that the 
dealer is not entitled to input tax credit for the purchase tax paid 
by him on the sales turnover made in favour of the manufacturer-
exporter.
Headnotes†
Uttar Pradesh Value Added Tax Act, 2008 – s.7(c) and s.13(7)  – 
The appellant-dealer claimed an input tax credit amounting 
to Rs. 6,42,260/- – The assessing officer, at the first instance, 
allowed input tax to the extent of Rs. 6,42,260/- – Subsequently, 
the assessing officer vide order dated 22.02.2013 made u/s.28 
of the Act disallowed the claim of an input tax credit of 
Rs.6,42,260/- – Courts below concurrently denied the reliefs 
to the appellant herein – Correctness:
Held: The admitted circumstances are that the subject turnover 
of Rs. 1,89,35,100/- has been brought within the fold of section 
7(c) of the Act read with notifications dated 24.02.2010 and 
25.03.2010 – The consequence of such treatment is that the 
dealer was unable to sell the goods to the manufacturer-exporter 
without collecting the tax from the said manufacturer-exporter – 
For the said turnover, the dealer claims an input tax credit on 
the purchase tax paid by the dealer – Plainly interpreting and 
applying section 7(c) provides that no tax under the Act shall 
be levied and paid on the turnover of sale or purchase of such 
goods by such class of dealers as may be specified in the 
notification – The said exemption applies to the goods and also 
to the class of dealers who satisfy the conditions and fall within 
* Author
476
[2025] 5 S.C.R.
Supreme Court Reports
the notification issued under section 7(c) of the Act – Similarly, 
the scheme of availing input tax credit is determined by section 
13 of the Act – Section 13(1) provides for allowing credit of an 
amount as input tax credit to the extent provided by or under the 
relevant clause to which the applicable condition is attracted – If 
the purchased goods are resold in the course of exporting the 
goods out of India, then the full amount of input tax credit can be 
claimed – Section 13(7) outlines the circumstances under which 
such a benefit cannot be allowed – Section 13(7) also sets out 
that no facility for input tax credit shall be allowed to a dealer 
with respect to the purchase of any goods where the sale of 
such goods by the dealer is exempt from tax under Section 7(c) 
of the Act – The prohibition from allowing input tax credit is a 
statutory mandate, and the view taken by the orders impugned, 
in the facts and circumstances of this case, is available and 
correct. [Paras 9 and 10]
List of Acts
Uttar Pradesh Value Added Tax Act, 2008.
List of Keywords
Input tax credit; Input tax credit for the purchase tax; Section 7(c) 
of the Uttar Pradesh Value Added Tax Act, 2008; Section 13(7) of 
the Uttar Pradesh Value Added Tax Act, 2008; Statutory mandate; 
Collection of tax; Exepmtion from tax; Prohibition from allowing 
input tax credit; Levying of tax.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6553 of 2016
From the Judgment and Order dated 24.11.2014 of the High Court 
of Judicature at Allahabad in CTR No. 713 of 2013
Appearances for Parties
Advs. for the Appellant:
Udayan Jain, Ms. Kajal Sharma, Ranjan Mishra, Ms. Geetika Vyas, 
Harsh Jaiswal, Ms. Amiti Gupta, Sonal Jain.
Advs. for the Respondent:
Bhakti Vardhan Singh.
[2025] 5 S.C.R. 
477
Neha Enterprises v.  
Commissioner, Commercial Tax, Lucknow, Uttar Pradesh
Judgment / Order of the Supreme Court
Judgment
S.V.N. Bhatti, J.
1.	
The appellant is a registered dealer under the Uttar Pradesh Value 
Added Tax Act, 2008 (for short, ‘the Act’). The subject matter of 
the appeal relates to the turnover returns filed by the dealer for the 
assessment year 2010-11. The dealer recorded sales against the 
issuance of Form-E to the manufacturer-exporter, amounting to Rs. 
1,89,35,100/-. The dealer claimed an input tax credit amounting to 
Rs. 6,42,260/-. The assessing officer, at the first instance, allowed 
input tax to the extent of Rs. 6,42,260/-. Subsequently, the assessing 
officer vide order dated 22.02.2013 made under section 28 of the 
Act disallowed the claim of an input tax credit of Rs. 6,42,260

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