Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (9) TMI 610 - GUJARAT HIGH COURT

2016 (9) TMI 610 - GUJARAT HIGH COURT - TMI - Set-off on purchase of spares of electrical motors - manufacture of pumping sets - prohibited goods - Section 2(21) of the Act - the raw material used for manufacturing of electric motors were not directly sold by the assessee but, were sold after manufacturing pump sets - Whether the Gujarat Value Added Tax Tribunal was justified in holding that the dealer was entitled to set off under rule 42 of the Gujarat Sales Tax Rules, 1970 on purchase of proh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The moment therefore the raw material is used for manufacture by an assessee and subject to other conditions being fulfilled, has been sold in the State of Gujarat or in the course of inter-State trade etc., Rule 42 would enable him to claim drawback, set off or refund as the case may be at prescribed rate on the tax paid on such purchases - appeal dismissed - decided against appellant. - Tax Appeal No. 727, 731 of 2015 - Dated:- 1-9-2016 - Akil Kureshi And A. J. Shastri, JJ. Mr Pranav Trivedi, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Gujarat Sales Tax Act, 1969 namely, spare parts and accessories of electric motors used in the manufacture of water pumps? 2. Brief facts are as under : 2.1 For the assessment period 1980-81, the Assessing Officer framed assessment in case of the respondent - company in which he disallowed the set-off under Rule 42 of the Gujarat Sales Tax Rules,1970 (for short the Rules ) on purchase of spares of electrical motors used in manufacturing pumping set and sold as pumping set in which the el .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. The assessee s appeal before the revenue authorities failed, upon which further appeal was filed before the Tribunal. The Tribunal by the impugned judgment allowed the appeal and held that the assessee was entitled to set-off on taxes paid for purchase of spare parts used in manufacturing the motors which, in turn, were fitted in the pump sets. The Tribunal observed that when there is sale of pump sets, there is sale of electric motors also and hence, the appellant is entitled to set-off under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see on the basis that when a pump set is sold, what is essentially sold is also the electric motor fitted in such pump set. 3. Though served, nobody appeared for the respondent. 4. In view of the facts on record, we may test the contention of learned AGP on the basis of statutory provisions. Section 2(21) of the Act defines term prohibited goods . At the relevant time, Section 2(21) provided that prohibited goods means goods described in entries 26, 39, and 43 of Part-A of Schedule-II or in entr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er : 42(2) The goods purchased are taxable goods other than those falling within the category of prohibited goods as defined in clause (21) of section 2 of the Act; Provided that this condition shall not apply in respect of the purchase of any of the goods as described in entry 16 in Schedule II Part A, where any such goods are used by the assessee in the manufacture of any goods as described in the said entry 16, Provided further that the condition shall not apply in respect of purchases of spa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not apply in respect of the purchase of 'ghee' when it is used by the assessee in the manufacture of sweets and sweetmeats. 6. In terms of Rule 42 of the Rules, a manufacturer, subject to conditions contained in Rule 47, would be granted drawback, set off or as the case may be refund, of the whole or any part of the tax in respect of purchase of goods used by him in manufacture. So far as fulfillment of conditions Nos.1 and 3 contained in the said rule is concerned, there is no dispute. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bed in entries-26, 39 and 43 in Schedule-IIA, where such goods are used by the assessee in manufacture of any goods described in the said entries. If therefore the goods purchased by a manufacturer dealer were prohibited goods, ordinarily condition No.2 would not be satisfied. However, if such goods fall in any of the entries 26, 39 and 43 and are used by the manufacturer in the manufacture of any of the goods described in the said entries by virtue of the proviso, condition No.2 itself would no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h requires that the goods so manufactured have been sold by the assessee in the State or in course of inter-State trade etc. It can be easily appreciated that Condition Nos.2 and 4 apply independently. For example, in case of goods falling in prohibited category not covered by the proviso, condition No.2 would not be satisfied and the benefit of set off would not be available irrespective of the fact whether condition No.4 is satisfied or not. Conversely, if the goods purchased are taxable goods .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version