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2016 (4) TMI 179 - HC - VAT and Sales TaxInput tax credit - Whether stock transfer is covered by the proviso of Section 6(3)(d) - Non consideration of the effect of the use of word “or” in Section 6(3)(d) of the Uttarakhand Value Added Tax Act while discussing the appeal - Held that:- the use of the word “or”, in the context of this case, is intended to convey the meaning that the sale may be within the State, an intra-State transaction in Uttarakhand, or the sale may be in the course of inter-State trade or commerce. The proviso clearly provides with reference to Clause (d) that where the finished goods, mentioned in Clause (d), are dispatched outside the State other than by way of sale, the consequences provided therein will follow. This would clearly mean that the legislature intended to cover the cases of sale in the course of inter-State trade or commerce in Section 6(3)(d) of the Uttarakhand VAT Act. Any other view would render the words in the proviso meaningless. In other words, when goods are sent by way of stock transfer in the course of inter-State trade, the case would not be covered by Section 6(3)(d) of the Uttarakhand VAT Act. The intention of the legislature was to provide limited relief of providing input tax credit, but confined to raw materials, which are used in the manufacture or processing of finished goods, which are sent by way of stock transfer as a case of stock transfer cannot be treated as a case of sale. In such circumstances, the proviso would appear to be an independent provision and the concept of sale would apply to both an intra-State sale, as also, inter-State trade and commerce within the meaning of Section 6(3)(d) of the Uttarakhand VAT Act. In other words, the case of stock transfer would not fall within the ambit of Section 6(3)(d) of the Uttarakhand VAT Act. Therefore, the case of stock transfer is squarely covered by the proviso and no input tax credit is vouchsafed in respect of packing materials used in connection with finished products, which are stock transferred outside the State in course of inter-State trade or commerce. - Decided against the appellant
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