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2014 (1) TMI 1619 - HC - VAT and Sales TaxWhether user of diesel purchased by the assessee against form C for cane procurement, i.e., from sugarcane purchasing centre to factory would amount to violation of purpose for which the said diesel was purchased so as to amount violation of section 10(d), attracting penalty under section 10A of the Act, 1956 - Held that:- Sugarcane in its entirety cannot be purchased by sugar factory at its factory premises and under law, it is bound to purchase from the farmers at cane purchase centres. For manufacturing of sugar, crushing of surgarcane is an integral part and for that purpose, sugarcane has to be transported from its place of storage or where it has been purchased to the point of crushing pit where it has to be off-loaded for crushing. To my mind, this is integrally connected part of process of manufacturing of sugar and therefore diesel purchased against form C if used for cane procurement from centres to factory, it would not amount to violation of purpose for which the said diesel was purchased. Whether user of diesel purchased by the assessee against form C for farm equipments' maintenance and repair would amount to violation of purpose for which the said diesel was purchased so as to amount violation of section 10(d), attracting penalty under section 10A of the Act, 1956 - Held that:- Farm equipments' maintenance and repair are also part of activities with respect to research and development so as to maintain a good quality of sugar and also to find out maximum quantity of sugar from per quintal sugarcane. Research, development, etc., is also integral part of manufacture - Decided in favour of assessee.
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