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2016 (11) TMI 1316 - KARNATAKA HIGH COURT

2016 (11) TMI 1316 - KARNATAKA HIGH COURT - TMI - Entitlement to partial rebate - Section 17 of KVAT Act - Section 17 of KVAT Act states that 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 KVAT Act - As per the petitioner they are not dealing in sales of any exempted goods covered by Section 5 and therefore, Section 17 is wrongly made a .....

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e not dealing in sales of exempted goods, it can be said that the petitioners are not covered by the provisions of sub-clause(1). - However, the language of sub-clause(2) is different - When the petitioner is selling taxable goods and also despatches taxable goods outside the State otherwise than by way of sale and the Tribunal has found that Section 17(2)-partial rebate is available, no error can be said to have been committed by the Tribunal. - It is not possible to accept the contenti .....

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. SATYANARAYANA JJ. Petitioner: (By Shri E.R. Indrakumar, senior counsel And Smt. Vani.H, Advocate) Respondent: (By Shri T.K. Vedamurthy, AGA) O R D E R In these petitions since common questions arise for consideration, they are being considered simultaneously. 2. The petitioner-assessee has preferred these petitions by raising various questions of law, but, considering the facts and circumstances, we find that the only question that arises for consideration is: - Whether the partial rebate sche .....

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tions 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 KVAT Act. It was submitted, even if sub-clause(2) of Section 17 is read with sub-clause (1) of Section 17, both the conditions must be satisfied and in the absence thereof Section 17 cannot be made applicable. As per the petitioner they are not dealing in sales of any exempted goods covered by Section 5 and therefore, .....

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apply and therefore, the contention is that the Tribunal has committed an error in considering the said question of law and hence, this Court may consider in the present petitions. 6. Whereas, learned Additional Government Advocate appearing for the respondent-Department has supported the order passed by the Tribunal and contended that no question of law arises in the petitions as canvassed. He submitted that for the purpose of calculation of facts and figures, the authority can examine if there .....

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able 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 any of the above clauses and also purchases any petroleum product for use as fuel in p .....

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ection 17 provides that one of the requirement is if the dealer makes sale of taxable goods and exempted goods under Section 5. Since as per the petitioner they are not dealing in sales of exempted goods, it can be said that the petitioners are not covered by the provisions of sub-clause(1). However, the language of sub-clause(2) is different. Sub-clause(2) of Section 17 can be bifurcated into two contingencies. One would be in addition to sales of taxable goods and another would be the sales re .....

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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 . F .....

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if either of it is satisfied coupled with the latter portion of sub-clause(2) of despatching of goods otherwise than by way of sale, sub-clause(2) will be attracted. In the present case, it is not in dispute that the petitioner is selling taxable goods. Therefore, when the petitioner is selling taxable goods and also despatches taxable goods outside the State otherwise than by way of sale and the Tribunal has found that Section 17(2)-partial rebate is available, no error can be said to have bee .....

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ted goods, in our view cannot be countenanced for three fold reasons, one is that no Rule can be permitted to march over the express provision of the 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 exe .....

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