TMI Blog2014 (1) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... that "the goods manufactured using the goods purchased at the concessional rate of tax under Section 13(1)(b) has to be sold within the State of Jharkhand or in the course of inter-state trade and commerce. This interpretation of the Second proviso advances the legislative purpose and object which the Second proviso intended to serve - Decided against the petitioner. Contention & Reliance upon Polestar Case [1978 (2) TMI 186 - SUPREME COURT OF INDIA] - geographical restriction - Held that:- Under Section 5(2)(a)(ii) of Bengal Finance (Sales Tax) Act, 1941 as applied in the Union Territory of Delhi, the prescribed form was to be filed by the purchasing dealer. In the light of the provisions of the said Act and that the declaration form to be filed by the purchasing dealer, the Hon'ble Supreme Court held that the intention of the assesse was evidenced by the declarations given by them to the selling dealers at the time of purchase and therefore in the absence of consequential amendment in the Form of declaration, the purchasing dealer cannot be said to have committed breach of the statement made in the declaration. Therefore, the ratio of the decision in Polestar Case cannot be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (now Jharkhand) as amended by Notification dated 2nd January 2002. 2. The Bihar Finance Act came into force on 01.04.1981. The State of Jharkhand was formed on 15.11.2000 and the State of Jharkhand adopted the Bihar Finance Act, 1981. Sub Section (1) of Section 13 of the Bihar Finance Act (adopted by the State of Jharkhand) provides for Special/Concessional rate of tax being charged subject to certain restrictions and conditions prescribed under the Act and Rules as it stood on 1.4.1981. Amendment was made in Section 13(1)(b) with effect from 01.08.1985 by which the words "In Bihar or in the course of Inter-State trade or commerce", as appearing after the term "Sale" was deleted. 3. After the first proviso of Sub Section (1) of Section 13 of the Act, by notification No. LG-12/2001 Aj: 01 dated 2nd January, 2002 a new proviso was inserted which reads as under :- 4. As per amendment, facility of concessional rate of tax on sale or purchases is restricted only to those registered dealers who manufacture goods within the State of Jharkhand and sell the goods so produced within the State of Jharkhand or in the course of inter-state trade and commerce originating in the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Notification dated 02.01.2002 and also order of assessment made in respect of the assessment year 2004-05 and also to quash the notice of demand dated 19.08.2008, the Petitioner filed writ petition W.P.(T) No.71 of 2009. M/s. Tata Motors Limited filed similar writ petition in W.P.(T) No. 1325 of 2009. Those writ petitions were disposed of by order dated 08.05.2009 directing the Petitioners to avail the statutory remedy of appeal against the assessment order passed by the respondent authorities and to raise all the points before the Appellate Authority. The Division Bench directed the authorities to consider "the effect of the amended provision without amending the corresponding rules". 8. Challenging the assessment order for the assessment years 2004-2005 and 2005-2006, the Petitioner Tata Steel Limited filed the appeal before the Joint Commissioner, Commercial Taxes who dismissed the appeal by order dated 23.10.2009 and 10.11.2009 respectively. 9. Challenging the order of the Appellate Authority, the Petitioner preferred revision before the Commercial Taxes Tribunal. In its order dated 04.03.2010, the Tribunal held that the amendment inserting Second proviso to Section 13( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials should be used for manufacture of goods in the State of Jharkhand. According to the Petitioner, sale of manufactured goods under Section 13(1)(b) can be of four types - Intra State Sale, Inter-state Sale, Sale Outside State and also Export Sale. The writ Petitioner contends that Petitioner is entitled to the benefit of purchase of goods at a concessional rate of tax under Section 13(1)(b) of the Act in respect of the finished goods which are sent outside the State by way of stock transfer for sale in as much as Form IX does not provide for a declaration to the effect that the goods so manufactured must be sold only within the State of Jharkhand or in the course of inter-state trade and commerce and not outside the State of Jharkhand. 13. Resisting the writ petition, the respondents have filed counter affidavit contending that the intention of the State legislature is to increase revenue of State. After amendment, the goods manufactured out of the raw materials purchased at concessional rate under Section 13(1)(b) has to be sold within the State of Jharkhand which refers to Section 3 of Central Sales Tax Act. The concessional rate of tax is not to be granted if these condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood the losses of tax on purchase and increase the State revenue by putting geographical restrictions then it would have used the word 'HEE' ( ) rather than 'BHI' ( ) in the impugned notification while providing for sale of goods manufactured in the State of Jharkhand. The learned Senior Counsel for the Petitioner submitted that the authorities were not right in invoking Section 13(3) of the Act and the Tribunal failed to appreciate that concession was being allowed to the Petitioner between 1985 to 2002 then the term "sale" in Section 13(1)(b) was not qualified by either "inside State of Bihar" and "in the course of inter-state trade and commerce". The learned senior counsel further submitted that the Tribunal erred in holding that - (i) State Sales Tax Law can take into sphere only sales within the State or inter- state sales originating from State and no other sales, and (ii) if the word "sale" occurs in the notification of State Sales Tax Act, it always means sales within the State or inter-state sale originating from State. 17. Learned counsel for the State of Jharkhand Mr. Rajesh Shankar submitted that by the Second proviso inserted to Section 13(1)(b), the emphasis is on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver during the period not exceeding 12 month, exceeded the specified quantum. Sub- section 9 thereof stipulates that the provisions of Central Sales Tax Act which shall apply for determining when a sale shall be deemed to have taken place inside the Bihar. Section 7 provides for exemption and indicates that no tax shall be payable under this part on sales or purchase of goods which have taken place (a) in the course of interstate trade or commerce (b) outside the State; (c) in the course of import or export of the goods outside the territory of India. 19. Section 21 provides for definition of taxable turnover. In the aforesaid scheme of the Act, rates of taxes to be ordinarily paid are prescribed under Section 12. Section 12 provides for rates of taxes payable by the dealer under Sections 3 and 4 which may be varied by notification of the State Government subject to conditions and restriction as it may impose. Thereafter, the provisions of Section 13 have been incorporated in the Act which provides for special rate of tax on certain sales or purchase. 20. Section 13 of the Bihar Finance Act (adopted by the State of Jharkhand) provides for concessional rate of tax being charged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or may be taken under Section 49, be liable to pay tax on the sale or purchase price, as the case may be, at the rate which is arrived at after deducting the concessional rate under this Section from the rate applicable to the goods, class or description of goods under Section 12. (4) .... 22. By the amendment made with effect from 01.08.1985, the words "in Bihar or in the course of inter-State trade or commerce" as appearing after the term "sales" was deleted. That is after the amendment from 01.08.1985, the restriction for use of goods purchased under concessional rate in the manufacture or processing of any goods for sale in Bihar was deleted. Deletion of the aforesaid words by the amendment from 01.08.1985, removed the geographical restriction for manufacture of goods from raw materials purchased on concessional rates within the State or for sale of such goods in Bihar or in the course of inter-state trade or commerce. 23. After the formation of the State of Jharkhand (15.11.2000), the Bihar Finance Act, 1981 was adopted by the State of Jharkhand. While Bihar Finance Act was adopted by the State of Jharkhand, Section 13(1)(b) reads as under: - 13. Special rate of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es clear the intention of the legislature that the goods manufactured out of the raw materials purchased at a concessional rate under Section 13(1)(b) has to be used for manufacture of goods within the State of Jharkhand and such manufactured goods are to be sold in the State of Jharkhand or in course of inter-state trade and commerce. The purchaser who buys goods on the concessional rate of tax and does not utilize the goods for the purpose indicated in Section 13(1)(b) read along with amended proviso, are made liable for paying up the differential rate of tax i.e., the difference between tax at the full rate and the concessional rates under Sub-Section (3) of Section 13, apart from liability for criminal prosecution under Section 49. 29. Section 12 of the Act prescribes that the rate of (sale or purchase) tax payable by a dealer under Section 3 or 4 shall be levied at the rate of 8%. As per notification No. 1096 dated 09.09.1983 issued in respect of sales covered by Clause (b) of Sub-Section (1) of Section 13 for the raw materials required directly for use in the manufacture or processing of goods for sale in the State or in the course of inter-state trade of commerce, concessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e does not accrue to the State. 33. The learned Senior Counsel for the Petitioner Mr. Mittal submitted that the Second proviso inserted by the amendment does not contemplate any geographical restriction on sale of manufactured goods and the same is evident from the plain language of the impugned notification which uses the word 'BHI' ( ) rather than 'HEE' ( ). As far as the condition with respect to the sale of manufactured goods is concerned, it was submitted that the manufactured goods can be sold in the State or in the course of inter-state trade and commerce in addition to sale outside the State of Jharkhand and also the export sale. The learned Senior Counsel submitted that the intention of the legislature has to be gathered from the plain reading of the statute and in the instant case, if the legislative intention was to restrict the benefit of Section 13(1)(b) only to intra state sale and inter-state sale originating from the State of Jharkhand to make good the losses of concessional rate of tax on purchase and to increase the State revenue by putting geographical restrictions then it would have used the word 'HEE' ( ) rather than 'BHI' ( ) in the impugned notification. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Petitioner is that the Petitioner dispatched the goods manufactured in Jharkhand to its depots all over the country on stock transfer basis against Form F and such goods have been admittedly sold in other states in which depots are situated and such sale outside the State of Jharkhand also qualifies for the benefit of Section 13(1)(b) and, therefore, the State is not right in invoking Section 13(3) to impose the differential rate of tax on the Petitioner. 35. Learned counsel for the State Mr. Rajesh Shankar submitted that the word 'BHI' ( ) has been used in the Second proviso as a conjunction in view of the two transactions indicated in the Second proviso. Learned counsel for the State further submitted that the Petitioner is a purchasing dealer of raw materials in the concessional rate of tax for the purpose which have been stated in proviso to Section 13(1)(b) and having made the concessional purchase, the Petitioner had to meet the requirement of the Second proviso. Meaning thereby, the Petitioner has to use raw material for the purpose of manufacturing of goods only in the State of Jharkhand and the goods so produced shall be sold within the State of Jharkhand and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured in the State or in course of inter-state trade or commerce. The amended proviso introduced in the year 2002 therefore appears to have been incorporated with a conscious objective to ensure that such grant of benefit of concessional rate to the purchaser is coupled with a restriction to manufacture the goods from such raw materials within the State of Jharkhand and at the same time, the goods were also sold within the State of Jharkhand or in course of inter-state trade or commerce. This was intended to encourage not only the manufacturing activity within the State but also increase revenue resultant from such sale. In the aforesaid background, Legislature therefore must have intended to insert the Second proviso to ensure that the grant of such concession benefit results in consequential advantage to the State in terms of the manufacturing activity as also for increase in revenue. 38. The interpretation of the aforesaid provision can also be understood from another angle. Under the State Sales Tax Law, State is entitled to levy tax on sale or purchase on intra-state sale and the State also levies tax on inter-state sales which are covered under the provisions of Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the respondent State submitted that if the goods manufactured out of the raw materials purchased at the concessional rate under Section 13(1)(b) are sold outside the State, the State is deprived of its revenue and, therefore, the Second proviso was inserted restricting that the goods manufactured out of the raw materials purchased at concessional rate under Section 13(1)(b) has to be sold within the State of Jharkhand or in course of inter-state trade and commerce. The learned counsel further submitted that in case, if the sales are effected outside the State and the conditions of Second proviso are not complied with, the State rightly invoked Section 13(3) imposing the differential rate of tax. 41. Learned senior counsel for the Petitioner submitted that in the taxing statute "intention" and "motto" of the legislature has to be gathered from the plain language of the statute. The learned senior counsel reiterated the submissions that had the legislative intention been to restrict the benefit of Section 13(1)(b) only to intra state sale and inter-state sale to make up the loss of tax on purchase and increase the State revenue, the notification would have appeare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce" (evam use utpadit maal ka vikray Jharkhand rajya ke antargat ya antarajya vyapar avam vanijya ke liye bhi hoga) clearly means that the goods manufactured out of the raw materials purchased at a concessional rate of tax under Section 13(1)(b) has to be sold within the State of Jharkhand or in course of inter-state trade and commerce which refers to Section 3 of the C.S.T. Act. The intention of the legislature is quite clear in the amendment. 45. The intention and object of the Second proviso is to recompense the revenue to the State which grants concessional rate of tax to the Petitioner for purchase of raw materials used in the manufacture of goods and the goods so manufactured be sold in the State of Jharkhand or in the course of inter-state trade and commerce so that the State gets back the revenue and the State does not suffer any revenue loss. The expression 'BHI' ( ) used is only as a conjunction since two types of transactions namely intra state sale and inter-state sale are referred to in the Second proviso. As held by the Hon'ble Supreme Court, the language more often than not is an imperfect instrument of expression of human thought. 46. Referring to various decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e community to sustain social services and purposes on the other. These words of Thomas M. Cooley in Law of Taxation Vol.2 are worth mentioning : "Artificial rules of construction has probably found more favour with the Courts than they have ever deserved. Their application in legal controversies has oftentimes been pushed to an extreme which has defeated the plain and manifest purpose in enacting the laws. Penal laws have sometimes had all their meaning construed away and in remedial laws, remedies have been found which the legislature never intended to give. Something akin to this has befallen the revenue laws ..." 47. The object of the amended proviso is to ensure that the goods purchased at a concessional rate be used for manufacturing of goods only in the State of Jharkhand and the goods so produced shall be sold within the State of Jharkhand and also in the course of inter-state trade and commerce. The object of the amended proviso is to make good the losses of tax availed by the manufacturer for purchase of raw materials. As rightly submitted by the learned counsel for the State, the State legislature would not have intended to bring in the amendment coverin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 stock of Rs.8,475.07 crore have been transferred to other depots of the company for sale outside the State and before the Assessing Officer the Petitioner preferred a claim that he is not liable to pay tax under Section 6A of the CST Act because the goods have been transferred to outside the State. 51. The manufactured products worth Rs.7,535.88 crore (2004-05) and Rs.8,475.07 crore (2005-06) transferred to other depots of the company situated outside the State which were manufactured using the raw materials purchased at the concessional rate. On the one hand, the State has lost the revenue by granting concessional rate of tax levying tax @ 2% - 3% on the goods purchased under Section 13(1)(b) as against the normal rate of tax of 8%; on the other hand, on transfer of the manufactured goods the State of Jharkhand cannot collect the tax and State is losing the revenue. The contention of the Petitioner that there is no geographical limitation of the sale in respect of the manufactured goods using the goods purchased availing the concessional rate of tax, is not only unreasonable but also lacks logic. The State legislature would not have intended to legislate such a proviso causin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear and the legislative intent and purpose can be deciphered, then the court is not required to fall back on any intrinsic or extrinsic aid to its construction. The rules of interpretation clearly provide that only if the language of the statute is not clear and is ambiguous, then court may resort to intrinsic aid. Only after exhausting the resort to intrinsic aid, the court may seek to discover the intent from extrinsic aid as may be available. In the present case therefore, the reliance of the Petitioner upon the notings in the file at different levels of executive hierarchy in the department, even before the introduction if the Bill in the Legislature, shall not come in the category of extrinsic aid. Even otherwise, they are not required for interpretation of the amended Second proviso introduced in 2002 where language is plain and unambiguous. 55. The condition imposed under the Second proviso to Section 13(1)(b) is an integral part of the concession availed by the Petitioner. Having availed the benefit of concessional rate of tax and having caused loss to the State revenue by making such purchases at concessional rate, the Petitioner is bound to make good the loss by r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: - (2) In this Act the expression "taxable turnover" means that part of a dealer's gross turnover during any period which remains after deducting therefrom (a) his turnover during that period on- (i) ......... (ii) sales to a registered dealer - of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for re-sale by him, or for use by him as raw materials in the manufacture in the Union Territory of Delhi (hereinafter in this sub-clause referred to as Delhi), of goods (other than goods declared tax free under Section 6): - (A) for sale inside Delhi; or (B) for sale in the course of inter-State trade or commerce, being a sale occasioning or effected by transfer of documents of title to such goods during the movement of such goods from Delhi; or (C) .......... 58. In the said Bengal Finance Act (adopted by Delhi) even though the amendment came into force on 28.05.1972, no amendment was made in the Form of the Certificate of Registration and they stood as it is prior to its amendment on March 29th 1973 and they did not specify that the re-sale of the goods purchased or their use as raw materials in the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the declaration given to the selling dealer and therefore cannot be said to have utilized the goods for any purpose other than that for which they were purchased so as to attract applicability of the Second proviso. 62. The reliance by the Petitioner in the case of Polestar appears to be misplaced in view of the fact that under the relevant provisions of Delhi Act i.e., Section 5(2)(a)(ii), the words 'inside the Union Territory of Delhi' were absent. In the said context the Hon'ble Supreme Court found that there was no such expression in the declaration form also to charge the assessee with such differential rate of tax after having availed of concessional rate of tax for purchase of raw materials for manufacture of goods. 63. Since repeated arguments were advanced placing much reliance upon Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act (as made applicable in Delhi) contending that the facts in Polestar Case are identical as the instant case and therefore the transfer of manufactured goods by the Petitioner to other States cannot be said to be in contravention of Section 13(1)(b) read with the Second proviso, we considered the submissions by comparing the relevant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the requirement for concessional rates of tax as mandated in Section 13(1)(b). Moreover, Second proviso of Bengal Act starts with the condition of misutilisation of Certificate of Registration by the registered Dealer, whereas, Section 13(3) of the Bihar Finance Act does not speak of any such misutilisation of Certificate of Registration/ Form by the purchasing dealer, rather the incidence of differential rates of tax automatically comes into play to be charged from the purchasing dealer (the Petitioner herein), if the conditions of Section 13(1)(b) are not fulfilled. 67. In the present case, the Petitioner by submitting 'Form F' has admitted that there has been no sale of the goods so manufactured out of the purchase of the raw material on concessional rate of tax vide Section 6-A of Central Sales Tax Act, 1956 read with Rule 12(7) of the CST (Registration Turnover) Rule, 1957. Thus, the requirement of Section 13(1)(b) of the Bihar Finance Act and the Second proviso is directly violated by the Petitioner. However, in the case of Polestar, there had been no such admission either by the selling dealer or purchasing dealer. In the background of the provisions of Bengal Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of any amendment in Form IX, the Petitioner cannot be said to have utilized the goods for purposes other than the one declared by the Petitioner and therefore the Petitioner cannot be held liable for paying the differential rate of tax - the difference between the tax at the full rate and the concessional rate of tax. 71. Placing reliance upon Polestar Electronics (Pvt.) Ltd. Case, it was contended that in the said case the Hon'ble Supreme Court has held that the declaration form on the strength of which seller claims exemption/concession from tax contains declaration as to the intention of the purchaser regarding the uses of the goods purchased by him. It was further submitted that the Hon'ble Supreme Court further held that even if geographical restriction to sale of manufactured goods has been imposed by amending the substantive law, still the benefit of concession cannot be denied to the purchasing dealer even if it sells the finished goods contrary to such geographical restriction since the declaration form issued by the purchasing dealer does not contain similar geographical restriction regarding the sale of manufactured goods. 72. Rule 13 deals with evidence in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Bihar Finance Act. 75. Rule 13 read with 'Form IX' is not meant for the purchasing dealer (the Petitioner herein). On the contrary, the Petitioner is directly concerned with complying the provision of Section 13(1)(b) read with Second proviso, failing which the provision of Section 13(3) of the Bihar Finance Act automatically comes in application having no bearing on 'Form IX'. 76. Under Section 5(2)(a)(ii) of Bengal Finance (Sales Tax) Act, 1941 as applied in the Union Territory of Delhi, the prescribed form was to be filed by the purchasing dealer. In the light of the provisions of the said Act and that the declaration form to be filed by the purchasing dealer, the Hon'ble Supreme Court held that the intention of the assesse was evidenced by the declarations given by them to the selling dealers at the time of purchase and therefore in the absence of consequential amendment in the Form of declaration, the purchasing dealer cannot be said to have committed breach of the statement made in the declaration. Therefore, the ratio of the decision in Polestar Case cannot be applied to the case in hand. 77. Form IX is prescribed under the State Sales Tax law which stipulates on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns stipulated in the Second proviso is violated. Section 13(3) is the substantive provision for imposing differential rate of tax in case the goods purchased and utilized for any purpose other than those specified. Whereas Rule 13 and Form IX is a form to be filed by the selling dealer enclosing the form of declaration given by the purchasing dealer evidencing the support of claim for payment of tax at a special rate under Section 13. Section 13(3) is a substantive provision; whereas Rule 13 Form IX is a procedural provision. The Tribunal referred to the decision of the Hon'ble Supreme Court in the case of India Carbon Limited and Others versus State of Assam reported in (1997) 6 SCC 479 to hold that substantive provisions will prevail over the procedural provisions and we endorse the view taken by the Tribunal. 81. It is worthwhile to refer to the decision of the Hon'ble Supreme Court in the case of M/s. ICI India Ltd. Anr. versus State of Orissa Ors. reported in (2007) 8 SCC 629 relied upon by the learned counsel for the respondent State which is identical to the case in hand. In the said case, arising under Orissa Sales Tax Act, the assessee purchased raw material i.e. Ammo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the manufactured goods by the Petitioner to the other depots situated outside the State of Jharkhand is "used for any other purpose" within the meaning of Section 13(3) for imposing the differential rate of tax. 83. Petitioner's liability under Section 13(3) to pay differential rate of tax - As discussed above, the essential ingredients of the Second proviso and availing of concessional rate of tax is in respect of sale either well within the State of Jharkhand or inter-state trade and commerce originating from the State of Jharkhand. The concessional rate of tax is not to be extended if these conditions are not fulfilled. If the raw materials are purchased at a concessional rate of tax, they are to be sold in these modes and there cannot be stock transfer to other State. The emphasis is on the word "sale". For the assessment year 2004-05, the Petitioner Company filed annual return stating that its gross turnover is Rs.11,626.47 Crore. The Petitioner company submitted Form F under Section 6A of the Central Sales Tax Act and claimed that it has transferred stock of Rs.7,535.88 Crore (64.816% of the Petitioner's G.T.O.) to its stock yards and depots situated outside the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of cement for sale. On the same set of facts, the Commercial Taxes Tribunal, Ranchi held that since the rules have not been amended accordingly and in as much as, declaration in the prescribed Form IX continues, the amended provision cannot be given effect to. The learned Senior Counsel appearing for the Petitioner submitted that the State revenue has not chosen to challenge the said order passed in Lafarge India Limited which would show that the State revenue has accepted the said order and while so, the State cannot turn around and contend otherwise in the case of the Petitioner. 85. As rightly contended by the learned counsel for the State, in Lafarge India Limited's case the Assessing Officer had not recorded finding that the goods purchased at a concessional rate of tax were utilized for any other purpose and there were no factual findings regarding stock transfer and that the goods were transferred otherwise than by way of sale. In the instant case, the Assessing Officer has recorded clear findings that substantial quantity of manufactured goods i.e. 64.816% of GTO of the petitioner (2004-05) and 65.86% of GTO (2005-06) were stock transferred to other States and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntend that in respect of the assessment years 2002-03 and 2003-04 the Department has not invoked Section 13(3) and thus acquiesced the returns filed by the Petitioner claiming stock transfer. 88. In the result we summarize our conclusions as under Second proviso to Section 13(1)(b) of Bihar Finance Act (adopted by the State of Jharkhand), inserted by amendment, 2002 stipulates that the goods manufactured using the goods purchased at the concessional rate of tax under Section 13(1)(b) has to be sold within the State of Jharkhand or in the course of inter-state trade and commerce. This interpretation gives a harmonious construction of the Second proviso which subserves the object and purpose, which the Second proviso intended to serve. The conditions stipulated as per the Second proviso inserted by the amendment that the goods purchased under Section 13(1)(b) at concessional rate of tax shall be used for the purposes of manufacturing the goods only in the State of Jharkhand and the goods so produced has to be sold within the State of Jharkhand and in the course of inter-state trade and commerce originating within the State of Jharkhand form integral part of Section 13(1)(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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