TaxTMI 
TaxTMI 
2021 (7) TMI 345
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....al goods cannot be availed before the commencement of commercial production as per Section 12(2) of the KVAT Act? (3) Whether on the facts and in the circumstances of this case, the KAT was right in holding that the conditions as mentioned under Section 12(2) of the KVAT Act, i.e., sale of taxable goods or commencement of commercial production, must necessarily be related to the petitioner's expansion project under Phase III itself? (4) Whether the KAT was right in holding that the penal provisions under Section 72 of the KVAT Act are mandatory and thereby upholding the levy of penalty against the petitioner in this case?" 2. Facts leading to filing of this revision petition briefly stated are that the petitioner is a dealer registered under the provisions of the Act and is engaged in the activity of manufacture and sale of petroleum products. The petitioner is a public sector company. The petitioner is also a registered dealer under the provisions of Central Sales Tax Act. The petitioner has commenced its operations in the year 1996 and has carried out the activities of expansion and modernization. The petitioner commenced the commercial production in the initial stage....
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.... rectification was passed on 25.06.2012. 4. The assessee thereupon filed an appeal before the Joint Commissioner of Commercial Taxes which was dismissed by an order dated 24.05.2017 inter alia holding that the petitioner purchased capital goods for expansion of Phase III and the eligibility to claim input tax credit under the Act is only after commencing of production or sale of goods from expansion Unit III of the petitioner. It was further held that the expression 'or' used in Section 12(2) of the Act is disjunctive and only relates to expansion unit of Phase III of the petitioner. Accordingly, it was held that the assessee has not fulfilled the conditions laid down under Section 12(2) of the Act and the appeal preferred by the petitioner was dismissed. In the aforesaid factual background, this appeal has been filed. 5. Learned counsel for the petitioner submitted that under Section 12(2) of the Act as soon as one of the conditions provided therein namely commencement of commercial production, or sale of goods in the course of export of goods out of territory of India and once such conditions are fulfilled, the provisions of Section 12(2) of the Act is applicable and th....
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.... fair and reasonable construction to their language without leaning to one side or the other but keeping in mind that no tax can be imposed without words clearly showing an intention to lay the burden and that equitable construction of the words is not permissible. (See: Principles of Statutory Interpretation Justice G.P.Singh 14th edition Page 882). It is equally well settled legal proposition that the word 'or' is normally disjunctive and the word 'and' is normally conjunctive. It is well settled rule of statutory interpretation that where the provision is clear unambiguous, the word 'or' cannot be read as 'and' and the expression 'or' is disjunctive. (See: 'UNION OF INDIA Vs. IND-SWIFT LABORATORIES' (2011) 4 SCC 634). 8. In the backdrop of aforesaid well settled rule of statutory interpretation with regard to taxing statute, we may advert to Section 12(1) and 12(2) of the Act and Rule 133 of the Karnataka Value Added Tax Rules, 2005 which are reproduced below for the facility of reference: "12. Deduction of input tax in respect of Capital goods - (1) Deduction of input tax shall be allowed to the registered dealer in r....
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....the dealer shall inform the jurisdictional Local VAT officer or VAT Sub-officer within ten days of such change in use. (3) Where the capital goods are disposed of otherwise than by way of sale after, the date of the commencement of commercial production or the sale of taxable goods or the sale of any goods in the course of export out of the territory of India, the dealer shall [repay input tax deducted in respect of such capital goods and such amount repayable shall be] calculated on the prevailing market value of such capital goods at the time of such disposal." 9. Thus, from perusal of Section 12(1) of the Act, it is evident that deduction of input tax shall be allowed to a registered dealer in respect of purchase of capital goods for use in the business of sale of any goods in the course of export out of the territory of India and in case of any other dealer in respect of purchase of capital goods wholly or partly for use in business of taxable goods. Similarly, Section 12(2) provides that deduction of input tax shall be allowed only after commencement of commercial production or sale of taxable goods or sale of any goods in course of export out of territory of India or reg....