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2021 (6) TMI 338 - HC - VAT and Sales TaxLevy of Entry Tax - cutting tools were used by it for roughing, drilling and boring of semi finished goods and for cutting and shaping of metals and other materials - benefit of exemption as contained in Explanation I to the Notification dated 30.03.2002 issued by the Government of Karnataka - Section 3(1) of Karnataka Tax On Entry Of Goods Act, 1979 - HELD THAT:- If goods specified in the table are bought by the dealer into the local area for 'consumption' or 'use' as raw materials, component parts and inputs in the manufacture of an intermediate or finished product, such goods are exempted from levy of tax. A constitution bench of the Supreme Court examined the correctness of the ratio laid down by three judge bench in SUN EXPORT CORPORATION VERSUS COLLECTOR OF CUSTOMS, BOMBAY [1997 (7) TMI 117 - SUPREME COURT], in which it was held that an ambiguity in a tax exemption provision or Notification must be interpreted so as to favour the assessee claiming the benefit of such exemption - from the said case, it is evident that an exemption Notification should be strictly interpreted and the burden of proving its applicability is on the assessee to show how his comes within purview of exemption Notification. The revisional authority without assigning any reasons has concluded that cutting tools are not used as raw materials, component, parts and inputs in the manufacture of intermediate of finished product. The revisional authority is required to record the findings on the factual aspect viz., whether goods viz., drill bits, millers and inserts have been consumed as inputs in the process of manufacture of finished goods viz., textile machinery and auto parts. However, no finding has been recorded by the revisional authority. In the absence of the aforesaid finding on the factual aspect of the matter, we are unable to adjudicate the question of applicability of Notification in case of the appellant - the order passed by the revisional authority requires to be set aside. The matter is remitted to decide the matter afresh after affording an opportunity of hearing to the parties - Appeal allowed by way of remand.
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