2013 (5) TMI 775 - HC - VAT and Sales Tax

Benefit of declaration form 17 - Concessional Rate of tax - Held that - Tax Board has come to the correct conclusion that the assessee-respondent was entitled to purchase of high speed diesel at the concessional rate of four per cent under section 10(3) of the Act, particularly; when under section 10(3) of the Act clearly speaks of concessional rate of purchase in the case of mixer/processing and when all the authorities have come to the conclusion that the respondent is involved in the processing, then he was clearly entitled to purchase the goods on lower concessional rate as prescribed under section 10(3) of the Act. Even the assessing officer when he comes to the finding that the assessee has purchased high speed diesel for processing of rody, concrete and cement, then it is clearly and categorical finding then in my view, the assessee was entitled to purchase of diesel on concessional rate by issuing declaration form 17 in purchasing the high speed diesel at the rate of four per cent. When it is an admitted fact that the mixer of rody, concrete and cement has been held to be involved in processing, the benefit as applicable under section 10(3) ought to have been allowed and it has rightly been allowed by the Deputy Commissioner (Appeals) and affirmed by the Tax Board. - Decided against Revenue.

Issues:
1. Interpretation of section 10(3) of the Rajasthan Sales Tax Act regarding concessional rate of tax on purchase of high-speed diesel for processing.
2. Determination of whether the contractor involved in road development qualifies for the concessional rate of tax under section 10(3).
3. Assessment of the findings of fact by the Deputy Commissioner (Appeals) and the Rajasthan Tax Board regarding the eligibility of the assessee for the concessional rate.
4. Evaluation of the arguments presented by both parties regarding the application of section 10(3) and the definition of "processing."

Analysis:
1. The High Court addressed the issue of interpreting section 10(3) of the Rajasthan Sales Tax Act, which provides for a concessional rate of tax on the purchase of goods for processing. The assessing officer had imposed a higher tax rate on the purchase of high-speed diesel by the contractor, challenging the eligibility for the lower rate. However, the Deputy Commissioner (Appeals) and the Tax Board upheld the contractor's right to the concessional rate under section 10(3), emphasizing the involvement in processing activities.

2. The court examined whether the contractor engaged in road development qualified for the concessional rate under section 10(3) by analyzing the nature of the activities involved. The petitioner argued that road development activities did not constitute processing, thus justifying the higher tax rate imposed. In contrast, the respondents contended that the mixing of materials like rody, concrete, and cement for road construction fell within the definition of processing, warranting the lower tax rate.

3. The judgment scrutinized the findings of fact by the Deputy Commissioner (Appeals) and the Rajasthan Tax Board regarding the eligibility of the assessee for the concessional rate. Both authorities concluded that the contractor was entitled to the lower tax rate under section 10(3) based on the nature of the activities performed, specifically the processing of materials for road construction. The High Court affirmed these findings, highlighting the absence of any legal errors in their decisions.

4. The court evaluated the arguments presented by both parties concerning the application of section 10(3) and the definition of "processing." The petitioner contended that the contractor was not involved in processing activities as required for the concessional rate, advocating for the higher tax rate. Conversely, the respondents maintained that the contractor's activities met the criteria for processing, justifying the lower tax rate. The court sided with the respondents, emphasizing the clear involvement in processing and the rightful application of the concessional rate.

In conclusion, the High Court dismissed the sales tax revision petition, affirming the decisions of the Deputy Commissioner (Appeals) and the Rajasthan Tax Board regarding the eligibility of the contractor for the concessional rate of tax under section 10(3) of the Rajasthan Sales Tax Act. The judgment emphasized the absence of legal flaws in the lower authorities' findings and upheld the contractor's entitlement to the lower tax rate based on the processing activities involved in road development.

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