1993 (7) TMI 327 - HC - VAT and Sales Tax

Summary

Issues:
1. Entitlement to concessional rate of tax on purchase of rubber by the assessee.
2. Interpretation of relevant notifications S.R.O. No. 585 of 1980, S.R.O. No. 641 of 1981, and S.R.O. No. 1516 of 1990.

Analysis:

Issue 1: Entitlement to Concessional Rate of Tax
The case revolves around whether the assessee, a manufacturer of tread rubber, is entitled to a concessional rate of tax on the purchase of rubber. The assessee argued for the benefit of Government Notification S.R.O. No. 641 of 1981, reducing the tax rate from 5% to 3% for manufacturers of finished rubber products using rubber in the State. The Appellate Tribunal denied the plea, leading to the revision.

Issue 2: Interpretation of Notifications
The Court analyzed S.R.O. No. 585 of 1980, S.R.O. No. 641 of 1981, and S.R.O. No. 1516 of 1990. S.R.O. No. 585 of 1980 reduced the tax rate for small-scale rubber industrial units using rubber in the manufacture of rubber products. The Court clarified that the assessee, manufacturing tread rubber, qualifies for the concessional rate under this notification. Additionally, the Court considered S.R.O. No. 641 of 1981, which applies to manufacturers of finished rubber products within the State. The subsequent amendment in S.R.O. No. 1516 of 1990 provided an explanation, ensuring clarity on the definition of 'finished rubber product.' The Court held that even under S.R.O. No. 641 of 1981, the assessee is entitled to the concessional rate.

Conclusion
The Court ruled in favor of the assessee, stating entitlement to the concessional rate of 3% on the purchase value of rubber used for manufacturing tread rubber. The Appellate Tribunal's decision was deemed erroneous, and the revision was allowed in favor of the assessee.