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2001 (3) TMI 1003 - HC - VAT and Sales Tax
Issues:
1. Claim for full rebate on tax paid on cotton seeds used for manufacturing oil. 2. Interpretation of rule 24-A of the Haryana General Sales Tax Rules, 1975. 3. Application of Supreme Court judgment in Commissioner of Sales Tax v. Bharat Petroleum Corporation Ltd. 4. Consideration of by-products in the manufacturing process for tax rebate eligibility. 5. Use of department instructions for retrospective application. Issue 1: Claim for full rebate on tax paid on cotton seeds used for manufacturing oil The petitioner, a dealer under the Haryana General Sales Tax Act, sought full rebate on tax paid on cotton seeds used for manufacturing oil. The assessment allowed only a proportionate rebate instead of full rebate. The Tribunal dismissed the appeals filed by the petitioner against this decision, leading to a challenge in the High Court. Issue 2: Interpretation of rule 24-A of the Haryana General Sales Tax Rules, 1975 The respondents relied on rule 24-A and entry 34 of Schedule "B" to argue against full rebate on tax paid on cotton seeds used in oil manufacturing. The petitioner contested this interpretation, citing the law laid down by the Supreme Court and its own previous order in a similar case. Issue 3: Application of Supreme Court judgment in Commissioner of Sales Tax v. Bharat Petroleum Corporation Ltd. The petitioner invoked the Supreme Court judgment in Commissioner of Sales Tax v. Bharat Petroleum Corporation Ltd. to support its claim for full rebate. The Tribunal's decision was scrutinized for compliance with this precedent, leading to a comparison with a similar case involving wheat manufacturing. Issue 4: Consideration of by-products in the manufacturing process for tax rebate eligibility The Tribunal's decision was challenged based on the argument that "khal," a by-product of oil manufacturing, should entitle the petitioner to full rebate on tax paid on cotton seeds. The Tribunal's reasoning regarding the distinction between taxable and tax-free goods in the manufacturing process was evaluated in light of the Supreme Court's guidance. Issue 5: Use of department instructions for retrospective application The Tribunal's reliance on department instructions for the financial year 1993-94 was contested by the petitioner. The High Court analyzed the validity of using such instructions retrospectively, drawing comparisons with relevant legal precedents to determine the applicability of these instructions in the present case. In conclusion, the High Court found the Tribunal's orders contradictory and discriminatory, leading to the quashing of the decision and a direction for the petitioner's appeals to be heard afresh considering the Supreme Court judgment cited.
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