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2014 (1) TMI 1381 - JHARKHAND HIGH COURTDenial of benefit of concessional rate of tax on purchase - geographical restriction - AO denied the benefit of concessional rate of tax on purchase of raw materials by the Petitioner used for manufacturing the goods which has been transferred by way of stock transfer outside the State in terms of Section 13(1)(b) - Demand of differential duty - Held that:- State is free to impose the condition that for earning the concessional rate of tax, the sale must take place within the State of Jharkhand or in the course of inter-state sale. One of the considerations while granting concessional rate of tax would be its effect on the revenue of the State. While so granting concessional rate of tax, the loss of revenue to the State is an important factor to be borne in mind. Language of the Second proviso inserted by the amendment is to be interpreted bringing it in harmony with the other provisions of the Act. Giving a purposeful interpretation of the language in the Second proviso it will be reasonable to hold that Second proviso, inserted by amendment, stipulates that "the goods manufactured using the goods purchased at the concessional rate of tax under Section 13(1)(b) has to be sold within the State of Jharkhand or in the course of inter-state trade and commerce. This interpretation of the Second proviso advances the legislative purpose and object which the Second proviso intended to serve - Decided against the petitioner. Contention & Reliance upon Polestar Case [1978 (2) TMI 186 - SUPREME COURT OF INDIA] - geographical restriction - Held that:- Under Section 5(2)(a)(ii) of Bengal Finance (Sales Tax) Act, 1941 as applied in the Union Territory of Delhi, the prescribed form was to be filed by the purchasing dealer. In the light of the provisions of the said Act and that the declaration form to be filed by the purchasing dealer, the Hon'ble Supreme Court held that the intention of the assesse was evidenced by the declarations given by them to the selling dealers at the time of purchase and therefore in the absence of consequential amendment in the Form of declaration, the purchasing dealer cannot be said to have committed breach of the statement made in the declaration. Therefore, the ratio of the decision in Polestar Case cannot be applied to the case in hand. Following the decision in the case of M/s. ICI India Ltd. & Anr. versus State of Orissa &Ors. [2007 (9) TMI 380 - SUPREME COURT OF INDIA] held that:- transfer of the manufactured goods by the Petitioner to the other depots situated outside the State of Jharkhand is "used for any other purpose" within the meaning of Section 13(3) for imposing the differential rate of tax. - Decided against the assessee. Escaped assessment - held that:- Since the Petitioner had chosen to challenge the demand notice and also the order of assessment for the assessment years 2004-05 and 2005-06, the Department was perhaps waiting for the matter to reach finality. In such facts and circumstances, the Petitioner cannot contend that in respect of the assessment years 2002-03 and 2003-04 the Department has not invoked Section 13(3) and thus acquiesced the returns filed by the Petitioner claiming stock transfer. - Decided against the assessee.
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