2013 (8) TMI 975 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of concessional rate of tax under Section 10 of the Rajasthan Sales Tax Act, 1994 for purchase of High Speed Diesel, Furnace oil, and Lubricant as raw material.

Summary:
The High Court of Rajasthan dismissed a sales tax revision petition filed under Section 86 of the Rajasthan Sales Tax Act, 1994 against an order passed by the Rajasthan Tax Board. The petitioner-department's appeal was dismissed by the Tax Board, upholding the order of the Deputy Commissioner (Appeals) regarding the purchase of High Speed Diesel, Furnace oil, and Lubricant at a concessional rate for use as raw material in textile yarn manufacturing.

The Court noted that the issue in question was similar to a previous case where the Hon'ble Apex Court had upheld the use of diesel as raw material for manufacturing purposes. The Apex Court emphasized that to avail the concessional tax rate under Section 10, the dealer must be registered, the raw material must be used for manufacturing goods, and the manufactured goods should be intended for sale within the State or for inter-State trade or export.

In light of the Apex Court's judgment and considering the facts and circumstances of the case, the High Court found that the petitioner-department failed to meet the criteria for challenging the concessional rate of tax. Therefore, the revision petition was dismissed, and the stay application was also rejected.

This judgment reaffirmed the position that diesel used as raw material for manufacturing end products like yarn and fabric qualifies for concessional tax rates under the Sales Tax Act.