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2015 (8) TMI 1292 - HC - VAT and Sales TaxInput tax credit - MP VAT - Maintainability of writ petition - Input purchased from a registered dealer used by the assessee in manufacturing of bodies of motor vehicle - Infact, the components purchased was used for fabricating plant and machinery which is then used for manufacturing of the final manufacturing product i.e. the motor vehicle body. - Held that:- Leaving it to the revenue to decide such a question may not be proper. Instead, it would be more appropriate if we deal with such questions and decide it in this petition under Article 226 of the Constitution as it is a question with regard to interpretation of statutory provision and no disputed question of fact as canvassed by Shri Samdarshi Tiwari are available. - writ petition is maintainable. If inputs or goods purchased are used in relation to manufacture of final product and even if its use may be as a plant or machinery or equipments or part thereof, in respect of the goods, specified as the final product, the benefit of MODVAT, CENVAT or “input tax rebate” can be claimed. Meaning thereby, it is not necessary that the goods purchased from the registered dealer which is known as “input” should be used directly for manufacture of the final product. It is sufficient if the input is used in respect of or in relation to a plant or machinery or a equipment which is ultimately used for manufacturing the final product. That in fact, should be the interpretation of the provisions of the Section. From the order of the assessment it is seen that the Assessing Authority holds that if the components produced after manufacturing and processing of the material purchased from M/s Vijay Steels, is sold by the petitioner, they are entitled to rebate on input tax under Section 14 but because they have consumed it for use as a plant and machinery, they are not entitled to this benefit. This according to us cannot be the correct interpretation of Section 14(1)(a) sub rule (2) and (4). If that be the intention of the legislature in giving input rebate to a dealer then it would be beyond the legislative purpose if the intention of the legislature is interpreted as done by the department by holding that the material used or consumed should be sold and should not be further used in respect of anything for the making of a final product which is ultimately sold. This could never be the intention of the legislature. - Benefit of input tax credit allowed - Decided in favor of assessee / petitioners.
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