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2010 (7) TMI 890 - HC - VAT and Sales TaxLevy of purchase tax under section 15B of the Gujarat Sales Tax Act on the purchases from a new industry Held that - The goods purchased by the appellants from a new industry having sales tax exemption vide notification issued under section 49 of the Gujarat Sales Tax Act, 1969 are not taxable goods within the meaning of section 2(33) of the Act and as such are not liable to purchase tax under section 15B of the Act. The Tribunal was, therefore, not justified in confirming the levy of purchase tax under section 15B of the Gujarat Sales Tax Act, 1969 on the purchases from a new industry, which had been granted exemption by notification issued under section 49(2) of the Act. The questions stand answered accordingly. The impugned orders made by the Tribunal are hereby quashed and set aside. The appeals are accordingly allowed with no order as to costs.
Issues Involved:
1. Levy of purchase tax under section 15B of the Gujarat Sales Tax Act on purchases from new industries granted sales tax exemption. 2. Classification of goods purchased from tax-exempted industries as "taxable goods" under section 2(33) of the Gujarat Sales Tax Act. 3. Consideration of detailed written submissions and determination orders by the Tribunal. 4. Binding nature and effect of determination orders under section 62 of the Gujarat Sales Tax Act. Detailed Analysis: 1. Levy of Purchase Tax under Section 15B: The court examined whether the Tribunal was right in confirming the levy of purchase tax under section 15B on purchases from new industries enjoying sales tax exemption. The appellant argued that the goods purchased from new industries with sales tax exemption are not "taxable goods" as per section 2(33) of the Act and, therefore, should not attract purchase tax under section 15B. The court noted that for section 15B to apply, the goods must be "taxable goods," which the goods in question were not, as they were exempt under section 49(2). 2. Classification of Goods as "Taxable Goods": The definition of "taxable goods" under section 2(33) was crucial. The court held that goods exempt under section 49 or a notification issued thereunder are not "taxable goods." The Tribunal's reliance on the concept of "generally taxable goods" was found to be misplaced. The court emphasized that the legislative intent was clear: goods exempt under section 49(2) are not "taxable goods" and thus not subject to purchase tax under section 15B. 3. Consideration of Detailed Written Submissions: The appellant contended that the Tribunal failed to consider detailed written submissions and determination orders that concluded purchases from tax-exempted industries are not taxable under section 15B. The court noted that the Tribunal's judgment did not refer to such arguments, leaving it open for the appellant to make a review application before the Tribunal. 4. Binding Nature and Effect of Determination Orders: The appellant argued that the Tribunal ignored the binding nature of determination orders under section 62, which had conclusively decided that purchases from tax-exempted industries are not taxable under section 15B. The court agreed that the Tribunal should have considered these orders, which were binding and supported the appellant's case. Conclusion: The court quashed the Tribunal's orders, holding that goods purchased from new industries with sales tax exemption are not "taxable goods" under section 2(33) and are not liable to purchase tax under section 15B. The Tribunal was directed to re-examine the cases, considering the correct legal principles and necessary factual inquiries. Orders: The impugned orders by the Tribunal were quashed and set aside. The cases were remanded to the Tribunal for fresh consideration, ensuring the correct application of law and factual verification. The appeals were allowed with no order as to costs.
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