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2015 (3) TMI 176 - MADHYA PRADESH HIGH COURTDenial of benefit of set-off as provided under the provisions of sections 14(1)(a), (2) and 26A(7) of the M.P. VAT Act - petitioner used soya seeds in the manufacture of edible oil and DOC - Denial of benefit on the ground that DOC, a by-product, is not taxable, hence, the petitioner is not entitled the benefit of set-off as provided under sections 14(1)(a), (2) and 26A(7) of the VAT Act and the petitioner is liable to pay tax at four per cent in accordance with the provisions of section 26A(5) of the VAT Act - whether in such circumstances, the petitioner is entitled to the benefit of set-off as provided under sections 14(1)(a), (2) and 26A(7) of the VAT Act on entire purchase of soya seeds. Held that:- It is an admitted fact that soya oil and other by-products; sludge are taxable, however, there is no tax on DOC. - Section 14 of the VAT Act prescribes rebate on input tax subject to the provisions of sub-section (5). A rebate of tax shall be claimed or to be allowed to a registered dealer under certain circumstances subject to restrictions prescribed under sub-section (5). Sub-section (5) says that if it is consumed or used for/in the manufacture or processing or packaging of goods declared tax-free under section 16. Refinery would be entitled to set-off to the entire tax paid by it on the purchase of raw material. - manufacturer is eligible the benefit of set-off on the entire amount of tax paid on purchase of raw material and principle of apportionment could not be invoked. In the facts and circumstances of the present case, the judgment of the honourable Supreme Court is applicable because the DOC, a by-product is tax-free and another by-product sludge and main product oil are taxable. Hence, the authority cannot apportion the tax liability after deducting the percentage of proportionate manufacture of DOC, which has been done in the present case. - petitioner is eligible to get set-off on entire raw material purchased by it. - Following decision of COMMISSIONER OF SALES TAX, BOMBAY Versus BHARAT PETROLEUM CORPN. LTD. [1992 (2) TMI 250 - SUPREME COURT OF INDIA] - Matter remanded back - Decided in favour of assessee.
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