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TMI Blog2016 (11) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... arises for consideration is: - "Whether the partial rebate scheme under Section 17 read with Rule 131 of Karnataka Value Added Tax Act, 2003(for short "KVAT Act") can be made applicable to the case of the petitioner or not?" 3. We have heard Mr. E.R. Indrakumar, learned Senior Counsel with Mrs. Vani. H., learned counsel for petitioner and Mr. T.K. Vedamurthy, learned Additional Government Advocate appearing for the respondent. 4. The contention raised on behalf of the petitioner was that for applicability of Section 17 of KVAT Act for partial rebate two conditions should be satisfied, one is that there should be sales of taxable goods and the second is that the dealer should also be making sales of exempted goods under Section 5 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions may be dismissed. 7. In order to appreciate the contention, we may for ready reference reproduce Section 17 of the KVAT Act, which reads as under:- "17. Partial rebate Where a registered dealer deducting input tax.- (1) makes sales of taxable goods and goods exempt under Section 5, or (2) in addition to [sales of taxable goods or] the sales referred to in clause (1), dispatches taxable goods or goods exempted under Section 5 outside the State not as a direct result of sale or purchase in the course of inter-State trade, or (3) puts to use the inputs purchased in any other purpose (other than sale, manufacturing, processing, packing or storing of goods), in addition to use in the course of his business, [or] 4) falls under an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of interstate trade and is meeting with any of the two conditions as observed in the first part, he would be covered by Section 17(2). As observed earlier, two contingencies are that the dealer should in addition to the sales of taxable goods be despatching taxable goods outside the State otherwise than by way of sale or the dealer should be dealing in the sales referred to i n sub- clause(1) and despatches goods outside the State otherwise than by way of sale. The fact that in between aforesaid two contingencies the Legislature has use d the word "or" it cannot be read as "and". Further, the reference to sub-clause(1) is for the sales referred to under sub-clause(1) and it cannot be correlated with an independent condition providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and the second is that the Rules should be read in aid of Section itself and not to nullify the effect of the Section. The third one i s that even if sub-rule(3) of Rule 131 provides for consideration of figures of input tax relating to sales of taxable goods and exempted goods, while calculating the figure, if any dealer is not selling any exempted goods, the figure will be zero for the input tax for exempted goods but thereby it cannot be said that the express two independent contingencies provided by sub-clause(2) of Section 17 would be nullified nor would be controlled by sub-rule(3) of Rule 131 of the KVAT Rules. Hence, we find that the said contention cannot be accepted. 9. In view of the aforesaid observations and discussions, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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