TMI Blog2013 (10) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to challenge the order dated 3rd November 2011 made by the Dy. Commissioner of Commercial Taxes, Patna in exercise of power conferred by Section 77 of the Bihar Value Added Tax Act, 2005 (hereinafter referred to as the 2005 Act ) on the application for determination made by the Corporation; and to challenge the order dated 3rd November 2011 of the Dy. Commissioner of Commercial Taxes, Patna made under Section 25(2) of the 2005 Act and the action in demanding recovery of ₹ 5,37,71,074.00 of Value Added Tax (hereinafter referred to as VAT ) for the Financial Year 2011-12. The facts are not disputed and the matter at issue lies in a narrow compass. The Corporation imports High Speed Diesel Oil (hereinafter referred to as the Dies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be adjusted against the VAT paid on the sale of the Diesel. The Corporation availed of the said facility of set off and adjusted the entire amount of Entry tax paid by it on the aforesaid import of Diesel against the VAT payable on sale of the Diesel to the retail suppliers. It is this adjustment availed of by the Corporation which is the subject matter of dispute. According to the Dy. Commissioner of Commercial Taxes, Patna, the adjustment of the Entry tax paid is available only in respect of the stock exigible to VAT. In other words, the Entry tax paid on that part of the stock of the Diesel, which was sold to the retail suppliers on which the Corporation had incurred liability to pay VAT alone could be adjusted against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He has also submitted that the matter calls for a close scrutiny by the High Court and may not be dismissed on the ground of alternative statutory remedy available under the 2005 Act. In support of his submissions, Mr. Agarwal has relied upon the judgments of the Hon ble Supreme Court in the matters of M/s Filterco Anr. Vs. Commissioner of Sales Tax, Madhya Pradesh Anr. [(1986) 2 SCC 103]; Bihar State Electricity Board Anr. Vs. Usha Martin Industries Anr. [(1997) 5 SCC 289]; Associated Cement Companies Ltd. Vs. State of Bihar Ors. [(2004) 7 SCC 642]; State of H.P. Ors. Vs. Gujarat Ambuja Cement Ltd. Anr. [(2005) 6 SCC 499] of Mauri Yeast India Private Ltd. Vs. State of Uttar Pradesh Anr. [(2008) 5 SCC 680]. Learned P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable on the goods at the rate specified under Section 14 of the 2005 Act will be reduced to the extent the amount of Entry tax paid by the dealer on such goods. It reads as under. Provided further that where an importer of Scheduled goods liable to pay tax under the Act, incurs tax liability, at the rate specified under Section 14 of the Bihar Value Added Tax Act, 2005 (Act 27 of 2005), by virtue of sale of imported Scheduled goods or sale of goods manufactured by consuming such imported Scheduled goods, his tax liability under the Bihar Value Added Tax Act, 2005 (Act 27 of 2005) shall stand reduced to the extent of tax paid under the Act. The above referred proviso provides for the reduction in the liability of VAT to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation did not incur liability to pay VAT on the said sale. The Corporation is, therefore, not entitled to adjust the amount of Entry tax paid on the said quantity of the Diesel. In the matter of Associated Cement Companies Ltd. (supra), a somewhat similar question arose for consideration by the Hon ble Supreme Court. In the said matter, under the then prevailing industrial policy of the Government of Bihar, the cement company was exempted from payment of sales tax on sale of cement as an incentive to establish a new industry or to expand the capacity of the existing industry. The Cement Company increased its manufacturing capacity and was allowed exemption on increased production capacity. The Cement Company did avail of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer conferred by Section 13(2)(a) of the 2005 Act, the Government of Bihar has issued the above referred Notification dated 4th May 2006 to determine the point in a series of sales at which the VAT would be payable. Under the said Notification, the VAT becomes payable on the sale of the High Speed Diesel Oil to the retail vendors or the consumers. The Oil Marketing Companies not being the retail vendors or the consumers, sale of the High Speed Diesel Oil to the Oil Marketing Companies is not exigible to VAT. Thus, we are dealing with an article, the incidence of sale of which does not attract liability to pay VAT. In our opinion, the respondents are right in not allowing the Corporation the benefit of set off under the aforesaid second p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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