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TMI Blog2016 (11) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... t: - The provisions of Section 17 by title itself shows that it is in order to permit partial rebate for input tax credit. Sub-clause(1) of Section 17 provides that one of the requirement is if the dealer makes sale of taxable goods and exempted goods under Section 5. Since as per the petitioner they are not dealing in sales of exempted goods, it can be said that the petitioners are not covered by the provisions of sub-clause(1). However, the language of sub-clause(2) is different - When the petitioner is selling taxable goods and also despatches taxable goods outside the State otherwise than by way of sale and the Tribunal has found that Section 17(2)-partial rebate is available, no error can be said to have been committed by the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner was that for applicability of Section 17 of KVAT Act for partial rebate two conditions should be satisfied, one is that there should be sales of taxable goods and the second is that the dealer should also be making sales of exempted goods under Section 5 of the KVAT Act. It was submitted, even if sub-clause(2) of Section 17 is read with sub-clause (1) of Section 17, both the conditions must be satisfied and in the absence thereof Section 17 cannot be made applicable. As per the petitioner they are not dealing in sales of any exempted goods covered by Section 5 and therefore, Section 1 7 is wrongly made applicable by the Tribunal. Learned counsel further submitted that the intention of the Legislature for requirement to be sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as a direct result of sale or purchase in the course of inter-State trade, or (3) puts to use the inputs purchased in any other purpose (other than sale, manufacturing, processing, packing or storing of goods), in addition to use in the course of his business, [or] 4) falls under any of the above clauses and also purchases any petroleum product for use as fuel in production of any goods or captive power.] apportionment and attribution of input tax deductible between such sales and despatches of goods or such purpose, shall be made in accordance with Rules or by special methods to be approved by the Commissioner or any other authorized person and any input tax deducted in excess shall become repayable forthwith. The afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se than by way of sale. The fact that in between aforesaid two contingencies the Legislature has use d the word or it cannot be read as and . Further, the reference to sub-clause(1) is for the sales referred to under sub-clause(1) and it cannot be correlated with an independent condition providing that in addition to sales of taxable goods . Therefore, we do find that for applicability of Section 17(2) both the conditions should be satisfied namely that the dealer should be making sales of taxable goods and the exempted goods. On the contrary, if sub-clause(2) is read with sub-clause( 1), sub- clause(2) provides for two situation, but, if either of it is satisfied coupled with the latter portion of sub-clause(2) of despatching of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be said that the express two independent contingencies provided by sub-clause(2) of Section 17 would be nullified nor would be controlled by sub-rule(3) of Rule 131 of the KVAT Rules. Hence, we find that the said contention cannot be accepted. 9. In view of the aforesaid observations and discussions, it is not possible to accept the contention that Section 17(2) would not be applicable to a dealer who sells taxable goods and despatches goods outside the State otherwise than by way of sale. Hence, the question as observed earlier, stands answered in the following manner:- If any dealer sells taxable goods and even if he is not selling exempted goods, but, despatches goods outside the State otherwise than by way of sale, he could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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