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2016 (7) TMI 788

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..... tion 12(1) and alternatively contending that the method adopted by the assessing officer in giving rebate is absolutely wrong. Held that:- As rightly contended by the learned counsel for the petitioner, when Section 12(1) gives a benefit and the benefit is restricted by way of a proviso, the proviso has to be read as it is without any addition or deletion. Each word in the proviso has to be given a meaning and while giving such an interpretation, the only possible view that could be taken is with reference to the amount of special rebate that the dealer claims with reference to the output tax payable and not with reference to the rate of tax. The assessing authorities were not justified in limiting the rebate to 4% and 5% as the case .....

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..... r is on a wrong interpretation of the fourth proviso to Section 12(1) of the Act. The petitioner, therefore, challenges the vires of the statute viz., fourth proviso to Section 12(1) and alternatively contending that the method adopted by the assessing officer in giving rebate is absolutely wrong. Section 12(1)(a) and (b) reads as under : 12. Special rebating in certain cases.- (1) In calculating the net tax payable by a dealer for a return period, there shall be deducted from the tax payable for the return period, a sum equal to,- (a) the tax paid under sub-section (2) of section 6; and (b) the tax paid under section 3 of the Tax on Entry of Goods into Local Areas Act, 1994 (15 of 1994) on the import of any goods, ot .....

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..... ise than by way of sale in the course of interstate trade or export or where the sale in the course of inter-state trade is exempted from tax, the special rebate under this section shall be limited to the amount of such tax paid in excess of four per cent. Provided also that where the goods in respect of which tax under subsection (2) of section 6 or under section 3 of the Kerala Tax on Entry of Goods in to Local Areas Act, 1994 has been paid and where such goods are resold in the State at reduced rate or a part of which has been resold and the balance disposed in the state otherwise than by way of sale or used in the manufacture of taxable goods, then the special rebate under this section shall not exceed the output tax payable in re .....

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..... t years. The learned counsel for petitioner argues that the proviso contemplates special rebate up to the total output tax payable. 5. The learned Government Pleader, while supporting the stand taken by the assessing authority, referred to the entire statutory provision under Section 12 and submitted that the scheme of the Act provides for certain benefit to be given in the form of rebate and fourth proviso clearly indicates that the extent of rebate to be granted to certain category of dealers. When it is stated that the special rebate shall not exceed the output tax payable, it has to be with reference to the rate of tax and not with reference to the total amount of rebate allowable to a dealer. 6. But on a perusal of the statutory .....

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..... ion only means that the rebate shall not exceed the output tax payable for the goods manufactured by using the goods purchased in terms of Section 6(2) of the Act. Therefore, I am of the view that the assessing authorities were not justified in limiting the rebate to 4% and 5% as the case may be. The petitioner was entitled for rebate for the entire amount paid in terms of Section 12(1) and even going by the fourth proviso, since the output tax payable does not exceed the total claim for rebate under Section 6(2). In the result, this writ petition is allowed. Exts.P5 and P6 are set aside. The assessing authority is directed to issue fresh assessment orders taking into consideration the aforesaid interpretation given to the fourth proviso .....

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