Input-tax credit on raw jute purchase tax upheld where statutory context, not Schedule A listing, governed taxable-goods treatment.

Raw jute was treated as taxable goods for the limited purpose of section 22(2) of the West Bengal Value Added Tax Act, 2003, because the expression "taxable goods" had to be read in context and not mechanically by reference to the general definition in section 2(47). Schedule A was held to govern sales tax exemption, not purchase tax liability or the availability of input-tax credit on purchase tax already paid. As purchase tax on raw jute was levied under section 11 and formed part of input tax, occupiers of jute mills were entitled to input-tax credit on such tax up to 31 July 2006, subject to compliance with the statutory conditions and proof of payment.

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Issues: Whether raw jute was to be treated as taxable goods for the purpose of input-tax credit under section 22(2) of the West Bengal Value Added Tax Act, 2003, and whether occupiers of jute mills were entitled to input-tax credit on purchase tax paid under section 11 of that Act up to 31 July 2006.

Analysis: The expression "taxable goods" in section 22(2) was held to be context-specific and not controlled mechanically by the definition in section 2(47). Schedule A was understood as a list of goods on sale of which no sales tax is payable, and not as a provision governing purchase tax liability or the availability of input-tax credit on purchase tax already paid. Since purchase tax on raw jute was itself levied under section 11 and formed part of "input tax" within section 2(18), denying credit merely because raw jute appeared in Schedule A would defeat the scheme and object of input-tax credit. The relevant rules also supported availability of credit in appropriate cases, subject to the prescribed conditions and proof of payment.

Conclusion: Raw jute was to be treated as taxable goods for the limited purpose of section 22(2), and occupiers of jute mills were entitled to input-tax credit on purchase tax paid on raw jute up to 31 July 2006, subject to satisfaction of the other statutory requirements.

Ratio Decidendi: A statutory definition must yield to context where necessary to preserve the working of the provision, and goods on which tax is leviable under the Act cannot be treated as non-taxable for denying input-tax credit merely because they are listed in a sales tax-free schedule.

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