https://www.taxtmi.com/caselaws?id=157023 Penalty under section 5-A(2)(iii) of the Karnataka Sales Tax Act applies where industrial inputs purchased on Form 37 declaration are in fact used to manufacture exempt goods, because the penal provision must be read with the concessional input scheme in section 5-A(1) and is triggered when the declared purpose is defeated. The expression "makes use of" was held broad enough to cover use in the manufacture of HDPE fabrics, which are exempt textiles, even though HDPE tapes were an intermediate stage. However, HDPE sacks produced from the fabrics were taxable goods, so no penalty could be levied to the extent the inputs were used in the chain leading to the sacks. The penalty was therefore required to be reduced proportionately. en-us Wed, 07 Apr 1993 00:00:00 +0530 Fri, 27 Sep 2013 17:16:51 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=157023 Penalty under section 5-A(2)(iii) of the Karnataka Sales Tax Act applies where industrial inputs purchased on Form 37 declaration are in fact used to manufacture exempt goods, because the penal provision must be read with the concessional input scheme in section 5-A(1) and is triggered when the declared purpose is defeated. The expression "makes use of" was held broad enough to cover use in the manufacture of HDPE fabrics, which are exempt textiles, even though HDPE tapes were an intermediate stage. However, HDPE sacks produced from the fabrics were taxable goods, so no penalty could be levied to the extent the inputs were used in the chain leading to the sacks. The penalty was therefore required to be reduced proportionately. Case-Laws VAT and Sales Tax Wed, 07 Apr 1993 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=157023