Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Gujarat Value Added Tax Act 2003 - ss.11(3)(b) 12 - Respondent-assessee is engaged in the business of manufacturing and selling polymers and chemicals in the appellant-State |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Gujarat Value Added Tax Act, 2003 - ss.11(3)(b), 12 - Respondent-assessee is engaged in the business of manufacturing and selling polymers and chemicals in the appellant-State - For the purpose of manufacturing said goods, the assessee purchases raw materials/inputs which are fuels, namely furnace oil, natural gas and light diesel oil - On purchase of such raw materials, VAT is paid at varying rates - Under s.JJ(l)(a) credit is given to a dealer on the VAT paid at the time of purchase of such raw materials which are used in manufacturing the final products - However. s.11 (3)(b) provides that if the goods fall in the categories mentioned in sub- clauses (i), (ii) and (iii), the tax credit is to be reduced by the amount of tax calculated at the rate of 4% on the taxable turnover of purchases within the State - In the instant case, since after the final product is produced, the goods are transferred by assessee to its various branches outside the State, hence, the goods so transferred are covered under sub-c/ause(ii) - Also the raw material/inputs used in the manufacture of instant goods are fuels, hence it falls under sub-clause (iii) as well - Issue as to whether the tax credit is to be reduced at the rate of 4% under sub-clause (ii) and again at the same rate under sub-clause (iii) as well or deduction is permissible only once - On appeal, held: Section 11 (3)(b) is a non-obstante clause as it starts with the word 'notwithstanding' - The 'amount of tax credit' which a dealer is entitled to claim ulcl. (a) which is to be reduced at the rate of 4%, is effected in three eventualities provided under sub-clauses (i), (ii) and (iii) - Between sub-clauses (i) and (ii) there is no question of any overlap and the same are disjunctive as the word 'or' is inserted between these two clauses - However, between clauses (ii) and (iii), there is a possibility of overlap (as in the instant case), there is no word 'or' used between clauses (ii) and (iii) - Sub-clause (ii) finishes with the punctuation mark full stop and then sub-clause (iii) starts - This depicts the INTENTION OF the Legislature, namely, reduction is not confined to one of theaforesaid two sub-clauses and it can occur under both theseprovisions - Thus, reduction of 4% would be applied whenever acase gets covered by sub clause (ii) and again when sub-clause (iii)is attracted -· However, this would be subject to one limitation, thatin cases where VAT paid on such raw material is 4%, as in the caseof fi•furnace oil, reduction cannot be more than that - Gujarat TaxOn Entry of Specified Goods into Local Area Act, 2001.Interpretation of Statutes - Taxing statutes -Interpretation of- Held: Taxing statutes are to be interpreted literally.Interpretation of Statutes - Taxing statute - Intention ofLegislature - Held: How much tax credit is to be given and underwhat circumstances, is the domain of the Legislature and the courtsare not to tinker with the same. |
Judge | Hon'ble Mr. Justice Arjan Kumar Sikri |
Neutral Citation | 2017 INSC 982 |
Petitioner | State Of Gujarat |
Respondent | Reliance Industries Ltd. |
SCR | [2017] 13 S.C.R. 25 |
Judgement Date | 2017-09-22 |
Case Number | 13047-13048 |
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