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2015 (4) TMI 1119 - UTTARAKHAND HIGH COURT

2015 (4) TMI 1119 - UTTARAKHAND HIGH COURT - [2016] 88 VST 114 (Utk) - Entitlement for input tax credit (ITC) on Packing material - finished goods were stock transferred to other states - Assessing Authority ignored the Circular No. 46 dated 28.06.2008 - Held that:- while interpreting the Statute, ordinarily, this Court neither should add nor should omit any word in the language of Statute. Since transfer of stock to other States, other than by way of sale, is not being treated as inter-State sa .....

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08, are now subject matter of re-assessment. Therefore, subsequent Circular dated 23.01.2013 seems to be in consonance with the correct mandate / interpretation of Section 6 of the Act and after issuance of subsequent Circular dated 23.01.2013 earlier Circular dated 28.06.2008 ceases to have any force.

Whether proviso to sub Section (3) of Section (6) of the Act is hit by Articles 301 and 304 of the Constitution of India - Held that:- in the present case, State of Uttarakhand has not .....

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No. 2282 (MS) of 2014 - Dated:- 6-4-2015 - Hon ble Alok Singh, J Mr. C.S. Lodha and Mr. H.M. Bhatia, Advocates for the petitioner. Mr. A.S. Rawat, Addl. Advocate General assisted by Mr. Gajendra Tripathi, Brief Holder for State of Uttarakhand /respondent JUDGMENT Hon ble Alok Singh, J (Oral) All the three writ petitions are interconnected involving identical questions of fact and law, therefore, with the consent of learned counsel for the parties, all the writ petition are heard together and are .....

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in the State of Uttarakhand and thereafter, manufacturing soaps, detergents, creams and toothpastes and while purchasing the raw material, packing material and container, petitioner company is paying VAT to the sellers, therefore, as per scheme of the Uttarakhand VAT Act, petitioner company is entitled for Input Tax Credit (hereinafter referred to as ITC ) while selling the manufactured goods either within the State of Uttarakhand or by inter-State sale or by exporting goods from State of Uttara .....

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rity while ignoring the Circular No. 46 dated 28.06.2008 was pleased to decline benefit of ITC to the manufacturer - petitioner assessee on packing material, on stock transfer from State of Uttarakhand to godowns of petitioner company situated in other States. Mr. Lodha further contends that Circular No. 46 dated 28.06.2008 issued by the Commissioner, Commercial Tax, Uttarakhand has statutory force, hence, must be given effect to and no authority should be allowed to ignore the Circular No. 46. .....

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r. Lodha further contends that under sub-Section (4) (a) (ii) of Section 6 of the Act, stock transfer is treated as sale, therefore, stock transfer for all purposes should be treated as inter-State sale. Mr. Lodha further contends that subsequent Circular No. 4411 dated 23.01.2013, whereby earlier Circular No. 46 dated 28.06.2008 was virtually superseded, should be declared either ultra vires or in violation of the scope of Section 6 of the Act. On the other hand, Mr. A.S. Rawat, Addl. Advocate .....

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he other States, other than by way of sale, is not considered as sale, therefore, petitioner assessee is not paying VAT in the State of Uttarakhand, consequently, petitioner assessee shall not be entitled for ITC. Mr. Rawat further contends that to promote industrialization in the State, Legislature, at its wisdom, has decided to incorporate proviso after Section 6 (3) (e) so that dealer may take benefit of ITC in excess of 2% on the raw material purchased within the State and used directly in t .....

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the territory of India while paying VAT on sale shall be entitled for benefit of ITC for the amount of tax paid by the dealer to the sellers while purchasing raw material, goods, packing material or container within the State. A bare perusal of Section 6 of the Act would further demonstrate that Legislature, at its wisdom, has not considered the transfer of stock to other States, other than by way of sale, as sale, therefore, transfer of stock by manufacturer to other States, in my humble opinio .....

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e that raw material, consumables, containers, packing materials are different components used for the purpose of manufacturing finished goods. Therefore, packing material cannot be treated at par or as part of the goods or capital goods or raw material. Hon ble Apex Court in the case of CIT Vs. Indo Mercantile Bank Ltd. reported in AIR 1959 SC 713 has held that plain wording used by Legislature, if are very clear and do not create any ambiguity or conflict, in such a situation, the Court is not .....

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