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2016 (8) TMI 88 - HC - VAT and Sales TaxInput tax credit - purchase of timber - emergence of firewood - section 80 of GVAT - Held that:- it is not even the case of the department that the entire timber purchased by the assessee was not used for the purpose of manufacturing sawn timber or logs. The department however, contends that howsoever unintentional, since the firewood came into existence as a byproduct, the proviso would apply. This begs the question of use of the raw material for the specified purpose. In our opinion, since the entire commodity purchased by the dealer was used for the specified purpose, namely, as a raw material in manufacturing of taxable goods, entire tax credit was required to be granted. The restriction or disallowance referred to in the said proviso, would not apply. Merely because in the process of manufacturing sawn timber or logs, a small quantity of waste incidentally is created by way of byproduct which is sold as firewood, would not mean that the raw material purchased was not used fully for manufacture of the specified product. Entire credit allowed - Decided in favor of assessee.
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