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2014 (2) TMI 815 - GUJARAT HIGH COURTInterpretation of section 11(3) (b)(ii) and (iii) of the Gujarat Value Added Tax Act, 2003 - whether if a particular item falls in more than one of these sub-clauses, denial of tax credit can be applied more than once. - Assessee purchasing furnace oil, natural gas and light diesel oil for manufacturing activity and transferring manufactured goods to branches outside state - Held that:- reduction of tax credit under section 11(3)(b) would in no case exceed four per cent If the interpretation put forth by the State is accepted, a dealer who has availed of tax credit of four per cent would end up surrendering credit by 8 per cent or may be in a given case by 12 per cent. Surely, the Legislature could never have intended the reduction to exceed the tax credit itself. In the present case, this is precisely what would happen if the interpretation of the State is accepted. We have noticed that the furnace oil invites tax at the rate of four per cent. The tax credit thus available to the respondent as a dealer would be limited to such amount. If such tax credit available to the respondent is reduced by eight per cent, it would bring about a situation where credit available is four per cent and what is reduced is eight per cent. Surely, the Legislature never envisaged any such situation while framing section 11(3)(b) of the VAT Act - Decided against Revenue.
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