TaxTMI 
TaxTMI 
2020 (2) TMI 472
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....d 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 Pvt. Ltd Vs Commissioner of Customs 2015 (318) ELT 3 (S....
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....missioner 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 in W.P.No. 24730 and 24731 of 2010 and W. P.No. 8759 to 8762 of 2010 which were disposed by an order dated 5.4.2016 in the lead case of Schw....
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.... 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 Tamil Nadu Vat Act, 2006. 24. In my view, presence of Entry 25 to Part B to the 1st Schedule to Tamil Nadu Vat Act, 2006 can be explained and only justified for the above reasons as otherwise the said entry is o....
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.... 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 Supreme Court in Grasim Industries Ltd. v. Collector of Customs [128 STC 350], is well-founded. Paragraph 9 of the said decision which clinches the issue in this regard, maybe usefully extracted as follows: "9. No words or expressions used in any statute can be s....
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....kumar, 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 Added Tax Law of the present seek to treat goods of a particular description differently, for the purpose of determining the incidence of tax. This is not prohibited by law and hence, the first ground of challenge has to fail. Individual grievances 73. Apart from the challenge to the validity of Section 2(11),....
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....cially 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 and apply their mind while passing orders of assessment. 28. Thus, the Honourable Division Bench has answered the issue. To qualify as "capital goods" the goods in question need be used within the state, it falls within Sub-clause (a). However, if the goods sold by the petitioner falls within the ambit of sub-clause (b) to (g), they must also be used within the State. 29. Unde....