TMI Blog2016 (6) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, directing the respondent no. 2 to continue to issue Form XVI as provided under Rule 26(3) of Uttarakhand VAT Rules which are required by the petitioner for import of raw material as well as finished products and direction declaring that the respondent no. 2 has no authority in law to stop issuance of Form XVI as provided under Rule 26(3) of Uttarakhand VAT Rules are concerned, those reliefs have been dealt with by learned Single Judge while deciding WPMS no. 532 of 2013, WPMS no. 1526 of 2014 and WPMS no. 2282 of 2014 on 06.04.2015. The State only wished to provide the benefit of ITC in a limited manner even in respect of raw materials used for production of finished goods, which are stock transferred. We cannot deny the right of the State with its plenary powers of legislation within the field of legislation, which is admittedly and legitimately exercised by it otherwise, the right to raise taxes. It has already been mentioned that special appeals were filed on behalf of Hindustan Unilever Limited against the judgment and order of learned Single Judge without meeting any success. Furthermore, when the SLPs were preferred before the Hon’ble Supreme Court, the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction declaring that the respondent no. 2 has no authority in law to stop issuance of Form XVI as provided under Rule 26(3) of Uttarakhand VAT Rules. 4) The facts in the background of present writ petition are that this Court in Hindustan Unilever Ltd. (HUL) judgment had upheld the validity of the impugned Circular as well as the validity of Section 6(3)(d) of the Uttarakhand Value Added Tax Act (UKVAT Act), insofar as it seeks to deny ITC in respect of packaging material, containers etc., when finished goods are removed by way of branch transfer. This Court has upheld the validity of Section 6(3)(d) of the UKVAT Act, on the ground that by the usage of the words or in the course of inter-State trade or commerce , the legislature had contemplated sale and both terms have the same meaning. However, it is submitted that while the legislature had consciously used sale or resale in case of export, sale within the State etc., no such qualification is used prior to the string of words in the course of inter-State trade or commerce . The same is in conformity with the Industrial Policy of the State of Uttarakhand and a contrary meaning assigned to the usage in Section 6(3)(d) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following table, for ease of reference: Sr. No. Particulars Amount 1 ITC claimed by the Company relating to local sales in Uttarakhand (per Section 6(3)(a)/(d) to the UKVAT Act 3,09,649 2 ITC claimed by the petitioner in relation to exports outside India (per Section 6(3)(c) to the UKVAT Act) 3,41,081 3 Partial amount of ITC claimed in relation to raw material as per Proviso to Section 6(3) of UKVAT Act (claim made for VAT in excess of 2%) 16,26,509 4 ITC claimed in relation to packaging material in relation to packaging material in terms of Section 6(3)(d) to the UKVAT Act 68,71,0 In addition, it is submitted that after passing the impugned order dated 30.11.2015, the respondent no. 2 in order to coerce the petitioner to pay the amounts towards ITC has stopped certification/issue of Form XVI issued under Rule 26(3) of the Uttarakhand VAT Rules for import of the raw material by the petitioner as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame cannot be agitated by the petitioner by way of a statutory appeal under Section 51 of the UKVAT Act. Hence, it is submitted that the petitioner has no alternate remedy, except to approach this Court by way of the present writ petition. 10) Learned counsel for the petitioner also referred to Clause (d) of Sub-Section (3) to Section 6 of the Uttarakhand VAT Act, 2006 and the proviso contained therein, which read as follows: 6(3)(d) use as [raw material and consumables] in manufacturing or processing of goods (other than those specified in Schedule I or Schedule III) and containers or other packing materials used for packing of such manufactured goods, for sale or resale within the State or in the course of inter-state trade or commerce; .. Provided that with reference to clause (d) above, in case such finished products are dispatched outside the state other than by way of sale, a partial amount of input tax credit shall be allowed in respect of tax paid [in excess of 2 percent] on the raw materials used directly in the manufacture of such finished products; 11) Learned counsel for the petitioner drew attention of this Court to decision rendered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e enacting clause, the stand we have taken is sound. To expand the enacting clause, inflated by the proviso, sins against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso. A proviso ordinarily is but a proviso, although the golden rule is to read the whole section, inclusive of the proviso, in such manner that they mutually throw light on each other and result in a harmonious construction. 12. Further, a three Judge Bench of this Court by majority of 2:1 in the case of S. Sundaram Pillai v. V.R. Pattabiraman, (1985) 1 SCC 591 has elaborately examined the scope of proviso to the substantive provision of the Section and rules of its interpretation. The relevant paras are reproduced hereunder: 30. Sarathi in Interpretation of Statutes at pages 294-295 has collected the following principles in regard to a proviso: (a) When one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject-matter of the proviso. (b) A proviso must be construed with reference to the preceding parts of the clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly speaking, a proviso is intended to limit the enacted provision so as to except something which would have otherwise been within it or in some measure to modify the enacting clause. Sometimes a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself. Thus, from a reading of the abovesaid legal position laid down by this Court in the cases referred to supra, it is abundantly clear that the proviso to Section 372 of Code of Criminal Procedure must be read along with its main enactment i.e., Section 372 itself and together with Sub section (3) to Section 378 of Code of Criminal Procedure otherwise the substantive provision of Section 372 of Code of Criminal Procedure will be rendered nugatory, as it clearly states that no appeal shall lie from any judgment or order of a Criminal Court except as provided by Code of Criminal Procedure. 12) Attention of this Court is also drawn towards a judgment of Hon ble Supreme Court in Rohitash Kumar and others vs Om Prakash Sharma and others, (2013) 11 SCC 451. Relevant paragraphs of said judgment are reproduced here-in-under for ready reference: 20. The no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 161 of 2015, vide judgment and order dated 23.09.2015, observed as below: 43. We are not impressed at all by the said arguments. We would think that to allege lack of wisdom is beyond the province of the court to probe. The Court is concerned only with constitutionality of the statute. It is not concerned with the policy behind the law. All goods, which are manufactured, which otherwise fall within Section 6(3)(d), are treated equally. The State only wished to provide the benefit of ITC in a limited manner even in respect of raw materials used for production of finished goods, which are stock transferred. We cannot deny the right of the State with its plenary powers of legislation within the field of legislation, which is admittedly and legitimately exercised by it otherwise, the right to raise taxes. The Court must strike a balance between the right of the State to raise taxes, which forms the major source of revenue for it for carrying out various public purposes, no doubt, while it stands ever vigilant against any move to treat goods manufactured from or brought from other States in a discriminatory manner. 44. We see no merit at all in the contention that all the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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