AI Drafter 
TaxTMI 
TaxTMI 
2020 (2) TMI 472
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....ioner submits that the reasoning in the impugned order is flawed in as much as the goods manufactured and sold by the petitioner were "capital goods" as defined in Section 2 (11) of the Tamil Nadu VAT Act, 2006 and that the petitioner has been wrongly subjected to a higher rate of tax under the Residuary Entry No. 69 to Part C to the 1st Schedule of the Tamil Nadu VAT Act, 2006 at 14.5%. 5. The learned counsel for the petitioner submits that the issue is also no longer res integra in as much as the Gujarat High Court in its order in State of Gujarat versus Reliance Industries Ltd., has answered the issue in their favour. 6. The learned counsel for the petitioner also submitted that though the petitioner has an alternate remedy since there are no disputed questions of fact and only legal issues were to be settled or decided, writ courts under Article 226 of the Constitution of India can entertain and decide such writ petitions. 7. In this connection, the learned counsel for the petitioner relied on the decision of the Court rendered in Deputy Commissssioner of Central Excise Vs Suhail & Co. 2016 (42) STR 625 and the decision of the Supreme Court in AIDEK Tourism Services Pv....
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....Appellate Commissioner, the petitioner has chosen to file a writ petition and has relied upon the decision of the Court in Deputy Commissioner of Central Excise versus Sushil & Co., cited supra by stating that since there are no disputed questions of fact and only law and therefore this Court can entertain the writ petition and pass orders. This submission of the petitioner appears legitimate. 13. Since the issue involved in the present writ petition is confined to rate of tax on the goods manufactured and sold by the petitioner in the course of inter-state sale, I shall take up the issue and decide the case. 14. In this case, the petitioner had earlier filed W.P.No.5189 of 2013 and challenged the notice calling upon the petitioner to pay the disputed tax. The said writ petition was dismissed by this Court by its order dated 06.03.2013 with a direction to the petitioner to participate in the adjudicatory proceedings under the provisions of the Act. The petitioner thereafter submitted its reply and requested the respondent to drop the proceeding which has culminated in the impugned order. 15.The petitioner had earlier also filed a batch of writ petition along with others....
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....t,2006 is not difficult to answer as input tax credit is available under Seciton 19(3) of the Act to a registered dealer on the tax paid on the purchase "capital goods" in the manner prescribed. 21. As per Section 19 (3), every registered dealer, shall be allowed input tax credit in the prescribed manner on the tax paid on the purchase of capital goods for use in the manufacture of taxable goods. 22. The necessity for incorporating Entry 25 to Part B to the 1st Schedule to Tamil Nadu Vat Act, 2006 may appear at the first glance unnecessary as already input tax credit has been made available under Section 19(3) of the Tamil Nadu Value Added Act, 2006 to a registered dealer on the tax paid by a seller under the 1st Schedule to Tamil Nadu Vat Act, 2006 . 23. Perhaps the reason for incorporating Entry 25 to Part B to the 1st Schedule to Tamil Nadu Vat Act, 2006 was to promote all manufacturing industries in the State to procure goods at 4% in terms of Entry 25 to Part B to the 1st Schedule of the Tamil Nadu Vat Act, 2006 as otherwise they would have been liable to pay tax at a higher rate of tax as prescribed in the Residuary Entry 69, to Part C to the 1st Schedule of the Tami....
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....y the latter in the manufacture, and assembling, packing or labeling in connection with such manufacture inside the State, for sale by him of any goods other than ethyl alcohol, absolute alcohol, methyl alcohol, rectified spirit, natural spirit and denatured spirit, goods falling under Part A of the Third Schedule, goods falling under item 1 of the Sixth Schedule and arrack, shall be at the rate only three percent on the turnover relating to such sale. (5) Notwithstanding anything contained in sub-section (2), but subject to the provisions of sub-section (1), the tax payable by a dealer in respect of sale of any of the goods mentioned in the Eighth Schedule to any other dealer for installation of, and use in his factory site situate within the State for the manufacture of any goods shall be at the rate of three per cent on the turnover relating to such sale; 28. As rightly pointed out by Dr.Anita Sumanth, learned Special Government Pleader (Taxes), it is not open to this Court to treat any word or expression used in any statute as redundant or superfluous. The reliance placed by the learned Special Government Pleader in this regard on the decision of the ....
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....appearing in Section 2(11) have to be ignored or treated as redundant or superfluous is completely contrary to the law laid down by the Supreme Court. 29. he Relying upon the decision of the Supreme Court in CCE, Coimbatore v. Bashir Mills Ltd. [(2011) 97 SCR 541], it is contended by Ms.Aparna Nandakumar, learned counsel for one of the petitioners that the expression "capital goods" has to be given a very wide connotation and that there cannot be an artificial restriction. But, we are unable to accept the said submission. In Bashir Mills, the Supreme Court was concerned with Rule 57-Q of the Central Excise Rules, 1944, which contain the definition of the expression "capital goods" under the Explanation to the Rule. It was made clear therein that the said definition was for the purposes of that Rule. The definition clauses in every rule or statute has to be construed only with reference to that rule or statute and cannot be imported to any other rule or statute. 30. Therefore, the issue is not as to how the very same goods become capital goods when used in the State, but become different goods when used outside the State. The Sales Tax Law of the past and the Value....
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....commodity but does not include any activity as may be notified by the Government." 76. Therefore, any equipment, appliance, or apparatus, which is used for producing, making, altering, assembling, or processing of any goods, will be a capital good, as it would satisfy the definition under Section 2(27). Any process of goods which brings into existence, a commercially different and distinct commodity, is also manufacture and hence any equipment that is used to process goods, so as to bring into existence a commercially distinct and different commodity, would be a capital good. That such a good should also be used in the State, so as to satisfy the requirements of Section 2(11), is altogether different. 77. Once the above tests are applied, it would be clear that concrete mixtures, fermenters, paper cup machinery, coir and curling machine, welding machinery parts, printing machinery parts, cold storage equipment etc., which the petitioners in some of the writ petitions are dealing in, would certainly be capital goods, provided they also satisfy the requirement of 'used in the State' found in Section 2(11). The assessing authorities shall take note of this an....