TaxTMI 
TaxTMI 
2015 (12) TMI 119
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.... common judgment. 2 The appellant-State of Gujarat has called in question the order dated 17th October, 2014 passed by the Gujarat Value Added Tax Tribunal (hereinafter referred to as 'the Tribunal') in Second Appeals No.32 and 33 of 2008 respectively, by proposing the following four questions stated to be substantial questions of law: "[1] Whether the Hon'ble Tribunal has erred in holding that the supply/transmission of electricity to the sister concern is wholly from the power plant operated from steam? [2] Whether the Hon'ble Tribunal has erred in holding that the Naptha purchased by the respondent is used by the respondent only and accordingly the respondent has not breached any condition of entry no.69 or 255 of no....
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....able stores made by it, shall be used in the industrial unit for which eligibility certificate was obtained by it. According to the appellant, the assessee did not use the entire material purchased by it against Form No.26 or 40 for the purpose of manufacture in its unit and that part of the purchases were utilised for the benefit of others and that thereby the assessee had committed breach of the declaration contained in Form No.26 or 40. 4 The above controversy arises in the backdrop of the following facts: 4.1 The assessee had established a captive power plant, running on gas turbine in the year 1999-2000 and naptha was used to operate the said plaint. The naptha, which was used, was purchased by the assessee by issuing Form No.26 ....
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.... incentives were extended to the assessee under entry No.255 and 69 of the notifications issued under subsection (2) of section 49 of the Act, if any condition of such incentive, as narrated in Form No.26 or 40 as the case may be, was breached, the dealer concerned would be liable to pay purchase tax under section 50 of the Act, which it otherwise was not liable to pay. The assessing authority as well as first appellate authority also levied purchase tax under section 15B on the sales made by the assessee. The assessee contended that both the purchase taxes under sections 50 and 15B were wrongly and illegally imposed and it was not liable to pay any such taxes. The Tribunal, after appreciating the evidence on record, recorded a finding of f....
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.... naptha and having been used for the purpose of generating the electricity, part of which was wheeled out to the sister concern, there is an apparent breach of Form No.26/40 on the part of the assessee and, therefore, the assessing authority as well as lower appellate authority have rightly levied the purchase tax on the assessee and corresponding interest and penalty and that the Tribunal was not justified in reversing the same. It was submitted that the appeal does give rise to the substantial question of laws as proposed or as may be formulated by the court. 6 On the other hand, Mr Parth Contractor, learned advocate for M/s Singhi & Company, learned advocates for the respondent supported the impugned order by submitting that the Tribu....
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....rding to the appellant amounts to a breach of Form No.26 or 40 on the part of the assessee. From the findings recorded by the Tribunal as well as from the facts as appearing from the record, it is evident that the entire material which was purchased against Form No.26 or 40, namely, naptha, was used by the assessee for generating electricity through the gas turbine and such electricity was used solely for the purpose of manufacture in its own unit. The small amount of electricity wheeled out to the sister concern was generated by the steam turbine which was run on the steam which emerged as a waste product when using naptha for the purpose of generating electricity through gas turbine. Therefore, on facts, it cannot be said that any materia....