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M/s. Sri Renga Polymers Versus Principal Secretary / Assistant Commissioner (CT)

2016 (4) TMI 1019 - MADRAS HIGH COURT

Payment of VAT - Invisible loss of yarn pursuant to manufacturing activity - Held that:- by following the earlier orders of the Principal Bench of this Court in the case of M/s. Asian Fabrix Private Ltd. Versus The Principal Secretary/Commissioner of Commercial Taxes And Others [2016 (4) TMI 1014 - MADRAS HIGH COURT], the petition is disposed of. Therefore, the directions given therein shall be followed by the respondents while passing fresh orders in respect of the issue related to invisible lo .....

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2. The subject matter in this Writ Petition is related to payment of VAT on the invisible loss of yarn pursuant to manufacturing activity. The said issue has been decided by this Court in a batch of Writ Petitions in W.P.Nos.13901,30852 to 30880 of 2013 in the case of ?Interfit Techno Products Ltd., Vs. The Principal Secretary, Commissioner of Commercial Taxes?, by order dated 26.11.2014. The relevant portion found in the said judgment reads as follows:- The decision in the case of Steel Author .....

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exemption notification is extended. In the present proceedings, the petitioner has approached this Court by way of Writ Petitions challenging the circular as well as the orders of assessment which are in most cases exparte orders since the dealer did not respond to the show cause notice. The assessing officer also made an adhoc assessment and adopted a uniform percentage stating that the same is treated as ?invisible loss? and direction was issued to reverse the Input Tax Credit. The net result .....

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d as it is the appropriate method for ascertaining as to whether on facts there is a process loss or a manufacture loss. Therefore, the decision does not render support to the case of the petitioner. ........... 63.In the result, 1.the challenge to the impugned order is held to be unnecessary since the circular is a non-statutory circular and is in the nature of guideline and the prayer for quashing the circular is rejected. 2.Section 18 of the TNVAT Act is not an independent or a separate stand .....

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tained under Section 19 of the VAT Act. In this regard, it is essential for the Assessing Authority to embark upon the fact finding exercise to ascertain the quantum of loss of the goods which were purchased on which tax was paid vis- s-vis the goods manufactured from and out of the goods purchased and to examine as to whether they fall within any of the restrictions contained in Section 19 of the VAT Act. The Assessing Officer has to conduct an exercise by which it is to be ascertained as to wh .....

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