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TMI Blog2014 (5) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... pted goods from the purview of ITC and not the person or class of persons exempt u/s 8(3) as nothing prevented the legislature from including besides exempted goods, exempted persons also under Section 18(1)(e) of the Act - goods and dealers are treated separately u/s 5 of the Act - in view of express language of Section 18(1)(e) of the Act, Notifications S.O.371, S.O.372 and S.O.377, the petitioner is entitled to avail ITC and the authorities below were not justified in denying Input Tax Credit to the petitioner -Revision petitions are allowed - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... deals with exemption of tax, the history of exemption Notifications issued under the Rajasthan Sales Tax Act, 1994 and various Notifications issued under the Act from time to time dealing with A.C. Sheets; further, principally submitting that in terms of Notification dated 09.03.2007 issued under Sub-section (3A) of Section 8, it is the 'manufacturers of Asbestos Cement Sheets and Bricks' who have been exempted and, therefore, it cannot be said that the 'A.C. Sheets' manufactured by the petitioner are 'exempted goods', which is a prerequisite for denying ITC under Section 18 of the Act. Reliance was placed on the judgment of this Court in ACTO v. Abhishek Granites Ltd. : 23 Tax-World 285 in support of the contention that exemption to unit is different from exemption to the transaction of sale of the commodity and CIT v. Kulu Valley Transport Co. (P) Ltd. [1970] 77 ITR 518 (SC) to support the contention that if two views are possible, view in favour of assessee should be accepted. Reliance was also placed on certain Notifications issued under the Act in relation to Self Help Groups and Institutions, Cooperative Societies and Individuals registered with the Khadi and Village Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her things attached to or forming part of the land which is agreed to be served before sale or under the contract of sale;" "Sec-8. Exemption of tax.- (1) The goods specified in the Schedule-I shall be exempt from tax, subject to such conditions as may be specified therein. (2) Subject to such conditions as it may impose, the State Government may, if it considers necessary so to do in the public interest, by Notification in the Official Gazette, add to or omit from, or otherwise amend or modify the Schedule-I, prospectively or retrospectively, and thereupon the Schedule shall be deemed to have been amended accordingly. (3) The State Government in the public interest, by Notification in the Official Gazette, may exempt whether prospectively or retrospectively from tax the sale or purchase by any person or class of persons as mentioned in Schedule-II, without any condition or with such condition as may be specified in the Notification. (3A) Subject to such conditions as it may impose, the State Government may, if it considers necessary so to do in the public interest, by Notification in the Official Gazette, add to or omit from, or otherwise amend or modify the Schedule-II, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment, modification in Schedule-I, Sub-section (3) provides for exemption to any person or class of persons as mentioned in Schedule-II, Sub-section (3A) provides for addition, omission, amendment and modification in Schedule-II, Sub-section (4) provides for exemption to any class of sales or purchases for promoting the scheme of Special Economic Zones or exports and Sub-section (5) provides for the procedure for grant of such exemption. The section also empowers the State Government to impose conditions for grant of exemption of tax. Section 8 therefore, clearly specifies three types of exemptions i.e. (i) goods specified in the Schedule-I, (ii) person or class of persons as specified in Schedule-II and (iii) sales or purchases for promoting Special Economic Zones or exports. So far as allowance of ITC is concerned, under Section 18 of the Act the same is allowed in respect of purchase of any taxable goods made within the State from a registered dealer to the extent and in the same manner as may be prescribed, inter alia, for the purpose of being used as raw material except those as may be notified by the State Government in the manufacture of goods, for sale within the State or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.07.2006:- "Notification Jaipur, Dated : 05.07.2006 In exercise of the powers conferred by sub-section (2) of section 8 of the Rajasthan Value Added Tax Act, 2003 (Act No.4 of 2003), the State Government being of the opinion that it is expedient in the public interest so to do, hereby makes the following amendments in SCHEDULE-I appended to the said Act, namely :- AMENDMENT In Schedule-I appended to the said Act, the existing expression appearing in Column No.3 against S.No.60A, shall be substituted by the following expression, namely:-" "(1) The goods shall be entered in the Registration Certificate of the selling dealer; (2) The exemption shall be for such goods, manufactured by the dealer who commences commercial production in the State by 31.12.2006. (3) The exemption shall be available up to 23.01.2010." Notification dated 09.03.2007 S.O.371:- "FINANCE DEPARTMENT (TAX DIVISION) NOTIFICATION Jaipur, March 9, 2007 S.O.371.-In exercise of the powers conferred by sub-section (2) of section 8 of the Rajasthan Value Added Tax Act, 2003 (Rajasthan Act No.4 of 2003), the State Government being of the opinion that it is expedient in the public interest so to do, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Schedule-I was amended and entry 60A was substituted. Thereafter on 09.03.2007 three Notifications were issued dealing with A.C. Sheets, whereby, by S.O.371 issued under Section 8(2) of the Act, the existing entry 60A was deleted from Schedule-I, by S.O.372 issued under Section 8(3A) of the Act 'manufacturers of Asbestos Cement Sheets and Bricks' were added in Schedule-II and by S.O.377 issued under Section 8(3) of the Act conditions for availing exemption for sale of A.C. Sheets and Bricks manufactured in the State were indicated. From the above, it is clear that while by the Notifications dated 16.03.2005 issued under the Act of 1994, 16.02.2006 and 05.07.2006 issued under the Act, 'A.C. Sheets and Bricks' were exempted, by Notifications dated 09.03.2007, the goods A.C. Sheets and Bricks were taken out by S.O.371 (supra) and the manufacturers of A.C. Sheets and Bricks were exempted by inclusion in Schedule-II by S.O.372 (supra) and conditions for availing such exemption by the manufacturers were indicated by S.O.377. It is significant that while S.O.371 has been issued under Section 8(2) of the Act, S.O.372 and 377 have been issued under Section 8(3A) and (3) respectively, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed. (C/46, 61)." The communication dated 26.04.2008 issued by Commissioner, Commercial Taxes, Rajasthan, Jaipur to all the Dy. Commissioner (Administration), Commercial Taxes Department clearly indicates that by Notification dated 09.03.2007, the manufacturers of A.C. Sheets have been included in Schedule-II and, therefore, the goods sold by dealers, who have purchased goods from manufacturers like the petitioner is liable to pay tax on sale of A.C. Sheets and such subsequent sale is liable to tax, also indicates that even as per the interpretation put by the department on the three Notifications dated 09.03.2007, it is the manufacturers and not the goods, who are exempt from tax. The communication dated 26.04.2008 construing the Notifications dated 09.03.2007 can be used as contemporaneaexpositio. Hon'ble Supreme Court in Collector of Central Excise v. Andhra Sugar Ltd., : AIR 1989 SC 625 while dealing with an exemption Notification under the Central Excise and Salt Act, 1944 observed and held as under:-- "5. It is well-settled that the meaning ascribed by the authority issuing the Notification is a good guide of a contemporaneous exposition of the position of law. Refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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