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2016 (10) TMI 374 - PUNJAB AND HARYANA HIGH COURT

2016 (10) TMI 374 - PUNJAB AND HARYANA HIGH COURT - TM - Input tax credit - whether the Hon'ble Tribunal was justified in rejecting the claim of the assessee for the Input Tax Credit, even though such purchases are not disqualified as per Schedule-'E' attached to the Haryana VAT Act, 2003? - Held that: - The kind of goods purchased by the appellant, input tax credit on which has been declined, is “cooper wire, Taflon Tape, Gasket, Union, Socket etc. Fire Bricks or Boiler, G. I. Pipe, M.S. Angle, .....

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ategories described at Sr. Nos. 1 and 2 of SCHEDULE - E. - Entry 5 in Schedule-'E' is general in nature. All goods which are not forming part of the goods mentioned at Sr. Nos. 1 and 2 will form part of this entry. If the goods purchased by the appellant were not in the category of capital goods, the same will fall in the goods mentioned at Sr. No. 5. Considering the conditions as provided in column no.3, the appellant is not in the business of telecommunication, mining or generation and dis .....

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nor those have been sold to Canteen Store Department. First proviso to Section 8(1) of the Act provides that if the goods so purchased in the State are used or disposed of partly in the circumstance mentioned in Schedule “E' and partly otherwise the input tax credit in respect of such goods shall be computed on pro-rata basis. - The appellant entitled to input tax credit on the goods purchased by him. However, while calculating input tax credit conditions in Schedule 'E' and provisos to Sec .....

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der dated 16.3.2010 passed by the Haryana Tax Tribunal (for short, 'the Tribunal') in STA No. 393 and 394 of 2009-10: Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in rejecting the claim of the assessee for the Input Tax Credit, even though such purchases are not disqualified as per Schedule-'E' attached to the Haryan VAT Act, 2003? 2. Learned counsel for the appellant submitted that the appellant is a registered dealer under th .....

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med by the appellant for purchase of machinery items, which were used in the process of manufacturing. The Assessing Authority was wrong in opining that the goods were in the nature of 'infrastructure goods'. Aggrieved against the rejection of input tax credit, the appellant preferred appeal to the Joint Excise & Taxation Commissioner (Appeals), Ambala, where the order passed by the Assessing Authority was upheld. Still aggrieved, the appellant preferred appeal before the Tribunal. T .....

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ot include tax paid in respect of goods specified in Schedule 'E' used or disposed of in the circumstances mentioned against such goods. Schedule 'E' appended to the Act provides for a list of goods where input tax is 'nil'. Serial No. 1 in the list will not be relevant as it provides for Petroleum products and natural gas. Serial No. 2 is also not relevant as it contains capital goods when intended to be used mainly in the manufacture of exempted goods or in the telecomm .....

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in the present case on the eventuality of which the input tax credit will not be admissible. 4. Learned counsel for the petitioner further submitted that the kind of goods as have been noticed in the order of the Tribunal itself shows that those were part of the machinery being utilized in the process for manufacturing. There was nothing to suggest that with the kind of goods infrastructure could be created. He further referred to an earlier order passed by the Tribunal in Amir Chand Jagdish Kum .....

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learned counsel for the State submitted that Section 2(1)(w) of the Act defines 'input tax', whereas Section 2(1)(zl) of the Act defines 'input invoice'. It clearly mentions that the goods must be used for manufacturing or processing of goods for sale. Section 8 of the Act and Schedule-'E' are not to be read in isolation, rather these are to be read together with Sections 2(1)(w) and 2(1)(zl) of the Act. Some of the goods in question were used by the appellant for constr .....

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Schedule-'E' is read, the appellant will be entitled to input tax credit on their purchase as none of the circumstance exists on account of which the input tax credit shall be 'nil'. 'Capital goods' have been defined in Section 2(1)(g) of the Act. 7. Heard learned counsel for the parties and perused the paper book. 8. The relevant provisions of the Act are reproduced hereunder:- 2(1)(g) capital goods means plant, machinery, dies, tools and equipment purchased for use in t .....

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ns an invoice required to be issued according to the provisions of sub-section (2) of section 28 by a VAT dealer for sale of taxable goods to another VAT dealer for resale by him or for use by him in manufacture or processing of goods for sale, and which entitles him to claim input tax in accordance with the provisions of section 8; xxx xxx xx Section 8. (1) Input tax in respect of any goods purchased by a VAT dealer shall be the amount of tax paid to the State on the sale of such goods to him a .....

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Provided that where the goods purchased in the State are used or disposed of partly in the circumstances mentioned in Schedule E and partly otherwise, the input tax in respect of such goods shall be computed pro rata: Provided further that if input tax in respect of any goods purchased in the State has been availed of but such goods are subsequently used or disposed of in the circumstances mentioned in Schedule E, the input tax in respect of such goods shall be reversed. (2) A tax invoice issue .....

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r in respect of the sale of the goods, a certificate furnished to him in the prescribed form and manner by the selling dealer; and such authority shall allow the claim only if it is satisfied after making such inquiry as it may deem necessary that the particulars contained in the certificate produced before it are true and correct. (4) The State Government may, from time to time, frame rules consistent with the provisions of this Act for computation of input tax and when such rules are framed, n .....

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r form of power; or (ii) When forming part of gross block on the date of cancellation of the registration certificate. 3 (x x x) 4 (x x x) 5 All goods except those mentioned at Serial Nos. 1 and 2 (i) When used telecommunications network, in mining, or the generation and distribution of electricity or other form of power; (ii) When exported out of State or disposed of otherwise than by sale; (iii) When used in the manufacture or packing of exempted goods except when such goods are sold in the co .....

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assed by the Tribunal, are extracted below:- cooper wire, Taflon Tape, Gasket, Union, Socket etc. Fire Bricks or Boiler, G. I. Pipe, M.S. Angle, Flat, T. Iron, M.S. Flange, Drill, Shaft sleeve, Industrial Fan, M.S. Channel, Angle, Fire Bricks, Rubber Ring, Electric Cable, Wire Cold Rolled Strips, Tape Cutter, etc. 10. A perusal of the aforesaid goods shows that none of them can be said to be of the category, which are used for construction of building, rather these are parts of machinery. In fac .....

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to mean plant, machinery, dies, tools and equipment purchased for use in the State in manufacture or processing of goods for sale. 'Input Tax' has been defined in Section 2(1)(w) of the Act to mean the amount of tax paid to the State in respect of goods sold to a VAT dealer, which such dealer is allowed to take credit of as payment of tax by him, calculated in accordance with the provisions of Section 8 of the Act. Tax Invoice has been defined in Section 2 (1)(zl) of the Act to mean an i .....

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ct of goods specified in Schedule 'E' used or disposed of in the circumstances mentioned against such goods. Schedule-'E' at the relevant time provided for three different categories of goods wherein in the circumstances mentioned in column 3 thereof the input tax credit was 'nil'. 12. The goods purchased by the appellant do not fall in the categories described at Sr. Nos. 1 and 2. 13. Entry 5 in Schedule-'E' is general in nature. All goods which are not forming p .....

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