Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2020 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (2) TMI 370 - MADRAS HIGH COURTExemption from VAT or not - Hank Yarn - exemption under Entry 44 of Part B of the Fourth Schedule to the Act - Tamil Nadu Value Added Tax Act, 2006 - taxability under Entry 3(a) of Part B of the First Schedule to the Act, 2006 - HELD THAT:- The intention, if any, of the State could have been very well expressed in clear terms of the Entry 44 itself. Nothing prevented the State from writing Entry 44 as 'Cotton Hank Yarn' or 'Hank yarn sold to Handloom Industries'. We cannot import external aids of interpretation where the plain meaning of the terms of the statute, namely the exemption Entry, is clear itself - The external aids for interpretation can be employed only if there is any ambiguity or confusion, but such external aids of interpretation cannot be applied to create a confusion or ambiguity unnecessarily. The sale of cotton hank yarn is also equally exempted, but merely because the Assessee does not manufacture and sell cotton hank yarn, he cannot be deprived of the exemption on the other yarns sold in hank form, so long as Entry 44, in its present form, stands for interpretation by Courts. The Hank Yarn of others types of Yarns like Silk for Handloom Kancheepuram and Banarasi Silk Sarees, Khadi Slik, Linen fabric are also used by Handloom Industry. Therefore, we do not appreciate why exemption should be restricted only to Cotton Hank Yarn, as contended by Revenue. Entry 44 never meant a harm to be caused to other type of yarns sold in Hank form, by denying exemption to them. In the light of the said Budget Speech of the year 2006-2007 also, there is nothing specifically mentioned to state that there was any intention to restrict the exemption of Hank yarn only to the cotton hank yarn and not others. Cotton hank yarn as well as other types of yarn in hank form are equally entitled to exemption under Entry 44 and therefore, Handloom Industry stood encouraged by said exemption. Was there any intention of State to harm Powerloom Industry by denying exemption to other types of Yarn sold in Hank form. The answer is an emphatic 'No'. Merely because Cotton hank yarn is the chief raw material for Handloom Industry or merely because powerloom industry can have an overarch over the Handloom Industry in the textile sector, we cannot deny the exemption to the supply of raw material namely VSF and PF Hank yarn to powerloom industry in the face of the plain language of the plain words 'Hank Yarn' employed in Entry 44 of the Fourth Schedule to the Act - the alleged Clarifications issued by the Commissioner of Department on 14.02.2013 and 29.06.2017, on a review application too, were clearly incorrect and unsustainable in law and the same deserve to be quashed. We, accordingly, quash the both of these Clarifications. Appeal allowed - decided in favor of appellant.
|