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2018 (2) TMI 1728 - HC - VAT and Sales TaxWorks Contract - Levy of tax - grit used for construction of the road - denial of benefit of Composition of Tax on Works contract - Section 14A of the VAT Act - Held that: - what the legislature desired by framing the said provision is that a dealer who has been granted permission for composition of tax must have paid tax; as prescribed, upon consumption of taxable goods. This does not however mean that the dealer has to pay tax - whether such liability under the Act has arisen or not. It is in this context, we may understand the term “tax payable under the Act.” When the taxing event is sale of goods and such event has not arisen, there would be no question of tax becoming payable under the Act. This itself would be sufficient to dislodge Department’s objection. The term “taxable goods” cannot be seen in isolation by reading the definition contained in Section 229 of the VAT Act. A commodity would become taxable goods when taxable event arises. Merely because upon sale of such goods, tax is prescribed which is not exempt under Section 5 of the VAT Act, and therefore, is “taxable goods” would not for the purpose of relevant portion of Rule 28 [8] of the Rules become “taxable goods”. The term “taxable goods” and “tax payable” under the Act have to be harmoniously construed. Only reconciliation possible is that the dealer is expected to pay tax when taxing event arises and not otherwise. Since the petitioner had not purchased the goods from market but had selfmanufactured it from the mines taken on lease, there was no occasion to pay the tax. The Department obviously cannot argue that in such a situation, the petitioner cannot avail of composition facility at all - petition is entitled for the benefit of Composition Tax - petition allowed - decided in favor of petitioner.
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