9911796707
TMI Blog2007 (7) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... valid and inoperative. Applicant No. 1, Consolidated Fibre & Chemicals Ltd., is a manufacturer of "acrylic fibre" having valid registration certificate under the West Bengal Value Added Tax Act, 2003 (in short, "the VAT Act") and accordingly applied before respondent No. 1 on August 31, 2005 enclosing the statement of stock of goods as on April 1, 2005 praying for input tax credit in terms of rules 21 and 22 of the West Bengal Value Added Tax Rules, 2005 (in short, "the VAT Rules"). Respondent No. 1 allowed ITC only for Rs. 48,593 in place of Rs. 1,73,404.08 claimed by the applicant vide order dated November 18, 2005 and on revision, respondent No. 2 confirmed that order on February 28, 2006 and hence this app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come under the provision of section 22 of the VAT Act though it is used for ancillary purpose, i.e., not as an essential aid in the manufacturing process and in this way purported to defend the impugned orders as absolutely valid and correct. There is and cannot be any dispute that as a registered manufacturing concern of acrylic fabric, the applicant-company uses to purchase raw materials and consumable stores for direct use in manufacturing the said end-product and, therefore, it is entitled to the benefit of input tax credit under section 22 of the VAT Act. Undisputedly, rather admittedly, the applicant-company submitted statement of stock showing purchase of furnace oil worth Rs. 1,24,810 and as stock in hand on April 1, 2005 and claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct and unidentifiedly consumed therein and used only as a fuel, it is not a consumable stores to treat under the VAT Act and Rules. There is and cannot be any doubt that as a manufacturer of acrylic fibre and as a registered dealer under the VAT Act the applicant-company is entitled to input tax credit (in short, "ITC") on its opening stock of raw materials, consumable stores, semi-finished and finished goods and packing materials under the provisions of the West Bengal VAT Act and Rules. The applicant-company accordingly filed application on August 31, 2005 along with statement of opening stock of goods as on April 1, 2005 claiming ITC for a total sum of Rs. 1,73,404.08 showing Rs. 1,24,810.42 for furnace oil as consumable st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners on that account is now to be scrutinised. "Consumable stores" has not been defined in the VAT Act. At the relevant point of time furnace oil was not also included in the negative list appended to section 22 of the VAT Act. There is also no decision of any court of competent jurisdiction including the apex court on why purchase of furnace oil required for use in manufacture of acrylic fibre cannot enjoy the benefit of ITC as contemplated in the VAT Act, effective from April 1, 2005. Rather, as per provision of section 22 of the VAT Act ITC shall be allowed to the dealer who has purchased taxable goods during the tax period and to the extent of the amount of tax paid or payable by the purchasing dealer on his purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnace oil, purchased by the applicants for use in the boiler for incessant running of other plants in the manufacture of goods and thereby to convert the raw materials into finished goods, and as in absence of furnace oil manufacture of the endproduct, i.e., acrylic fibre, would become commercially inexpedient, furnace oil necessarily comes in the campus of consumable goods. The Legislature had also every intention to allow ITC on the purchase of furnace oil and for that it was not listed in the negative list. Our above observation gets every support from passing West Bengal Act, 18 of 2006 with effect from August 1, 2006 whereby the Legislature has expressly intended not to allow ITC and has specifically inserted furnace oil in item No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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