VAT remission benefit survives separate tax disclosure in invoices where the scheme waives the tax burden on certified sales.

A certified manufacturer under a VAT remission scheme retained the benefit even though the tax component was separately shown in invoices and collected from purchasers. The scheme was directed at waiving the State tax burden on specified goods manufactured by certified units, and the requirement to issue tax or retail invoices was treated as an accounting mechanism enabling tax credit, not as a condition that changed the nature of the remission. Separate disclosure of the tax element in the sale invoice was therefore only a bookkeeping treatment and did not amount to breach of the remission conditions. The denial of remission solely on that basis was unsustainable.

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Issues: Whether a certified manufacturer was entitled to remission of VAT on sales under the Government scheme even though the tax element was shown separately in the invoices and collected from purchasers.

Analysis: The remission scheme under section 41(1) was intended to waive the tax burden on specified goods manufactured by certified units and to encourage such industries by sparing the goods from State tax. The scheme required issuance of a tax invoice or retail invoice, which served the purpose of enabling the purchaser to obtain tax credit and created the necessary accounting mechanism for the remission arrangement. The manner in which the manufacturer reflected the tax component in its sale price did not alter the character of the transaction, because the Government had already decided to forgo the tax component itself. Separate disclosure of the amount in the invoice was therefore only an accounting treatment and did not amount to breach of the remission conditions. The objection based on alleged double loss to the revenue was rejected as the exchequer's loss was confined to the tax component already remitted under the notification.

Conclusion: The petitioner was entitled to remission of tax on sales, and denial of that benefit solely because the tax component was separately shown and collected in the invoices was unsustainable.

Ratio Decidendi: Where a remission notification waives the tax on specified sales and permits issuance of tax invoices, the dealer does not lose the benefit of remission merely because the tax element is separately reflected in the invoice or accounted for in a particular manner.

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