TaxTMI 
TaxTMI 
2011 (3) TMI 1422
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....st Bengal Value Added Tax Act, 2003 ("Vat Act") for the purpose of claiming Input Tax Credit ("ITC"). In the above two proceedings under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the respondents challenged the decision of the State Government not to treat the spare parts of plant and machinery to be "consumable stores" and to refuse the benefit of ITC on purchase of spare parts used for the manufacture of taxable goods. The Tribunal has accepted the contention of the respondents that spare or spare parts or machine parts would be considered for ITC only if it can be established that those are required for the purpose of manufacturing and used or to be used in the operative machineries during the process of manufacture of the finished product. It has been further held that for claiming ITC in respect of accessories, it is to be established that those are intricately linked with the process of manufacturing or with the productive machineries. Being dissatisfied, the State of West Bengal has come up with the present writ-application. Mrs. Roy, the learned Advocate appearing on behalf of the petitioner, has strongly relied upon th....
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....in Section 22(4) of the Act which is quoted below: "(4) Subject to the other provisions of this section, the input tax credit or input tax rebate shall be allowed to the extent of the amount of tax paid or payable by the purchasing dealer on his purchase of taxable goods, other than such taxable goods as specified in the negative list appended to this section, made in the State from a dealer when such goods are purchased for:- (a) sale or resale by him in West Bengal; or (b) sale in the course of inter-State trade and commerce within the meaning of section 3 of the Central Sales Tax Act, 1956 (74 of 1956); or (c) use as containers or materials for packing of taxable goods intended for sale, in the State or in the course of inter-State trade and commerce within the meaning of section 3 of the Central Sales Tax Act, 1956; or (ca) use as containers or materials for packing of goods intended for sale in the course of export out India within the meaning of section 5 of the Central Sales Tax Act, 1956 (74 of 1956); or (d) use as raw materials and consumable stores required for the purpose of manufacture of taxable goods intended....
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.... the same is "capable of" doing the "action" or subject to the "action" the said verb denotes. Thus, the adjective "consumable" means that the same is capable of being "consumed" or subject to "consumption". Once the legislature has deliberately used the adjective "consumable" before the noun "stores", it necessarily follows that it was quite conscious of the fact that stores are of two types, viz. consumable and non-consumable, and that it proposed to give benefit of rebate only to the "consumable stores" by excluding such benefit to the "non-consumable stores". It is a well-known rule of construction of statute that a Court should presume that the legislature does not use any unnecessary word and thus, the introduction of the adjective "consumable" before the noun "stores" was a conscious act of legislature. The next question is whether all the spare parts of a machinery used for manufacturing the taxed goods (in this case textile goods) are consumable in nature and if it is really treated to be such, then the next question will be, what are articles which can be described as "non-consumable stores". According to the Oxford Advanced Learner's Diction....
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....e of goods for sale as understood by the provisions of Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941. The Apex Court answered the said question in affirmative holding that that those gloves were to be used by workmen who were engaged in hot jobs or in handling corrosive substances in the course of manufacture. That being so, the Apex Court proceeded, it could not be denied that those gloves had to be "used in the course of manufacture". In our opinion, the phrase "required for the purpose of manufacture" should be given the same interpretation as "used in course of manufacture". In the case of Indian Copper Corporation Ltd. vs. The Commissioner of Commercial Taxes, Bihar, Patna and others (supra), the Supreme Court held that the cane baskets which are required for carrying ore and other materials used in mining or in the manufacture of goods being intended for use in the process of manufacturing or mining operations can be specified in the certificate of registration under the Central Sales Tax Act (74 of 1956). In the case of Coastal Chemicals Ltd. etc. vs. Commercial Tax Officer, A.P. and others (supra), upon which Mrs. Roy placed strong reli....
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....rovision took the colour from and must be read in the light of the words that are its neighbours, namely, 'raw material', 'component part', 'sub-assembly part' and 'intermediate part'. So read, according the Apex Court, it was clear that the word 'consumables' therein referred only to material which is utilised as an input in the manufacturing process but is not identifiable in the final product by reason of the fact that it has got consumed therein and it is for this reason that 'consumables' had been expressly referred to in the said provision, though they would fall within the broader scope of the words 'raw material'. In the case before us, the relevant sub-section (4) of the statutes, with which we are concerned, demands that the input tax credit or input tax rebate shall be allowed to the extent of the amount of tax paid or payable by the purchasing dealer on his purchase of taxable goods, other than such taxable goods as specified in the negative list appended to this section, made in the State from a dealer when such goods are purchased for use as raw materials and consumable stores required for the purpose of manufacture of taxable goods intended for sale in the ....