TMI Blog2018 (12) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... UNJAB AND HARYANA HIGH COURT] has already settled the legal issue against the respondent-revenue. Therein, after considering the relevant statutory provisions and the entire case law on the point, it has been concluded that the chemicals used in the job work are taxable but the pertinent question to be answered would be as to how much of dyes/colours are taxable which is transferred to the fabric when the whole quantity of consumable is not transferred. The tax on the entire value of chemicals consumed during the process of dyeing and job work are not to be included for the purpose of levy of VAT as substantial portion of the same is not transferred to the principal eventually. The matter is remanded to the Assessing Officer to decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g substantial questions of law:- ( i) Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in upholding the levy of tax on chemicals used as consumables in the process of job work of dyeing of fabric by assuming that property in the goods has passed on to the principals? ( ii) Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in upholding the levy of tax on the entire value of dyes used by the appellant in the job work process of dyeing of fabric ignoring the quantity of dyes, which were not transferred to the principals? ( iii) Whether on the facts and in the circumstances of the case, the findings of learned Tribunal are perverse insof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Importance) Act, 1957. The assessee filed all the four quarterly returns for the year 2007-08 along with annual return in Form VAT R-2. It claimed that no sales tax should be levied on sale of textile under the provisions of the Sales Tax laws when additional excise duty is leviable as per the provisions of the statutes. While framing the assessment, no discrepancy was found in the account books and accounting statements of the assessee, when the Assessing Authority checked all the records submitted by the assessee. Cross entries from cash book to ledger and vice versa were also checked. Account books produced by the assessee had been examined in detail. The Assessing Authority concluded assessment on the basis of observations and find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job work was not to be included for the purpose of levy of VAT under the HVAT Act/CST Act. It was also argued that even the dye used in the process would not be entirely taxable as a substantial portion of the same is not transferred to the principal eventually. The assessee also submitted a paper book containing the reports of technical personal certificates issued by various competent authorities justifying the stand of the assessee that chemicals are wasted during the process of dyeing of textiles and a part of dyes is made part of the final product sent to the principal. Vide impugned order dated 07.11.2017, Annexure A.3, the Tribunal dismissed the appeal upholding the levy of tax on the entire value of the chemicals and dyes used in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer to work out the details of quantity of chemicals, dyes and colours that would get washed out in the process of dyeing and printing of fabrics undertaken by the applicant. The operative paras of the judgment read thus:- 26. Having arrived at the conclusion that chemicals used in the job work are taxable but the pertinent question to be answered would be as to how much of dyes/colours are taxable which is transferred to the fabric when the whole quantity of consumable is not transferred. In the present case, it would be essential to determine the value of consumables transferred in the goods on which tax is leviable. While determining the actual loss of chemicals, dyes and colours where the fabric or textile undergoe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract if such user or consumption does not result in transfer of property in those goods in any form to the customer. The tax on the entire value of chemicals consumed during the process of dyeing and job work are not to be included for the purpose of levy of VAT as substantial portion of the same is not transferred to the principal eventually. 8. In view of the above, the present appeals are disposed of in the same terms as in VATAP No. 32 of 2017. As a result, the impugned orders passed by the Tribunal in all the three appeals are set aside and the matter is remanded to the Assessing Officer to decide the matter afresh in view of the observations made in the judgment rendered in M/s A.P. Processor s case (supra), in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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