9911796707
TMI Blog2012 (9) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... llate authority and the assessment order dated August 23, 2003 insofar as levying tax on diesel, for the assessment year 2000-01. 2. The respondent-assessee is a public limited company engaged in the manufacturing of Ramco Brand Cement and also registered dealer under the provisions of the Karnataka Tax on Entry of Goods Act, 1979 (hereinafter referred to as "the KTEG Act"). In the course of business of cement, for the purpose of generating electrical energy, the assessee has installed generating sets. He has caused entry of diesel and furnace oil into the local area for generating sets to generate electrical energy for the purpose of running the earthmovers. In the annual returns filed, they have declared gross net turnover and also turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the assessee need not pay entry tax of four per cent. As per the Government notification dated May 14, 1998, the diesel is omitted from the notification dated March 31, 1998 wherein entry tax has been fixed at the rate of two per cent. Further held that the diesel and furnace oil used for the manufacturing of the electrical energy are liable to be treated as raw materials. As per the Government Notification, no tax can be levied on the diesel, which is used as raw material. Accordingly allowed the appeal and set aside the levy of tax on the diesel which was used for the generator. However, imposed one per cent tax on the diesel used for running the earthmovers for shifting the limestone to the respondent's factory from the adjoining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Power Supply Company Limited v. State of Karnataka reported in [2006] 61 KLJ 214 held that diesel and furnace oil have to be treated as raw materials for generation of electrical energy, hence they are not liable to pay tax. The judgments relied upon by the Appellate Tribunal are not applicable to the facts of the case and sought for setting aside the same by allowing this appeal. 4. On the other hand, Sri. M.N. Shankaregowda, learned counsel appearing for the respondent argued in support of the order passed by the Karnataka Appellate Tribunal and contended that there is no infirmity or irregularity in the order passed by the Appellate Tribunal. Further, the Appellate Tribunal relying upon the various judgments of this court, the Allahaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 is justified in holding that the diesel being used as raw material, the assessee is not liable to pay entry tax?" 6. Section 3(1) of the Karnataka Tax on Entry of Goods Act provides for levy and collection of tax on entry of any goods specified in the First Schedule into local area for the consumption, use or sale therein at such rate not exceeding five per cent of the value of the goods as may be specified by the State Government by its notification. The State Government in exercise of the power under section 3(1) of the KTEG Act issued Notification No. FD 34 CET 98(1) dated March 31, 1998, specifying the levy of entry tax on diesel at the rate of two per cent and the furnace oil at the rate of four per cent. Subsequently, the word "d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that such goods are brought into a local area as raw materials, component parts and inputs." The reading of the aforesaid notification makes it very clear that during the assessment year 2000-01, the diesel was liable to tax at the rate of four per cent when it was brought into the local area for consumption, use or sale therein. As per the notification extracted above, even though the diesel was brought into the local area as raw material, component parts and input, the assessee is liable to pay tax at the rate of four per cent. The Appellate Tribunal failed to consider the notification extracted above and came to a wrong conclusion. The finding of the Tribunal that when the diesel is used a raw material, it was taken out from the purvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In U.P. Trade Act, the "goods" has been defined wherein the goods include machinery, plant, fuel or lubricants and exemption has been given to those goods under the Act. The honourable Supreme Court dealing with Rajasthan Sales Tax Act has noticed the definition of "raw materials" under section 2(34). The "raw materials" means the goods used as ingredients in the manufacturing of other goods and include preservative fuel and lubricant required for the process of manufacturing. In that circumstances, the honourable Supreme Court held that for the raw materials, concessional tax has to be levied. In the instant case, as per the notification extracted above, notwithstanding the goods which are brought into the local area as raw materials, c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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