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TMI Blog2020 (2) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... oner that it sold capital goods as defined in section 2 (11) of the Tamil Nadu Vat Act, 2006 and therefore was liable to pay tax at the lower rate under Entry 25, Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006. In the present case, neither the petitioner nor the respondent have clearly explained as to whether the goods traded and sold by the petitioner in the course of Inter-state sale fall under Sectioin 2(11) (a) or under Section 2(11) (b) to (g) of the Tamil Nadu Vat Act, 2006. Matter remanded back to respondent for re-examination - appeal allowed by way of remand. - W.P.No.34294 of 2013 And MP.No.1 of 2013 - - - Dated:- 27-1-2020 - Mr. Justice C. Saravanan For the Petitioner : Mr.Karthik Sundaram For the Respondent : Mr.V.Haribabu, AGP (T) ORDER The petitioner has challenged the impugned assessment order dated 25.10.2013 bearing reference CST.No.632017/2007-08 Passed by the respondent. 2. By the impugned order the respondent has demanded tax on goods manufactured and sold by the petitioner under Residuary Entry No. 69, Part C to the 1st Schedule of the Tamil Nadu VAT Act, 2006 on Inter State sale effected by the petitioner. 3. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingh Gill v. Chief Election Commissioner (1978) 1 SCC 405 x) Schwing Stetter (India) Private Limited versus Commissioner of Commercial Taxes, order dated 20.09.2019 passed by this Court in W.P.Nos.26452 26458 of 2019. 9. The learned counsel also submitted that the decision of the Division Bench of this court in Schwing Stetter (India) Private Limited versus Commissioner of Commercial Taxes referred to supra has upheld the validity of the definition of the expression capital goods in Section 2 (11) of Tamil Nadu VAT Act, 2006 and the issue as to whether goods in question in those cases are to be considered as capital goods has been left open. 10. Per contra, the learned Additional Government Pleader (Taxes) submits that the Advance Ruling Authority has already issued a clarification in ACAAR 104/4/12-13 and therefore such clarification as far as the rate of tax in respect of the goods is binding on them in terms of Section 48-A of the Tamil Nadu VAT Act, 2006. It is submitted that the writ petition was not only liable to be dismissed as petitioner has an effective and alternative remedy but also the issue is covered against the petitioner in the case of Schwing St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uipments; (c) components, spare parts and accessories of the goods specified in (a) and (b) above; (d) moulds, dies, jigs and fixtures; (e) refractors and refractory materials; (f) storage tanks; and (g) tubes, pipes and fittings thereof; used in the state for the purpose of manufacture, processing, packing or storing of goods in the course of business excluding civil structures and such goods as may be notified by the Government; 17. The definition of capital goods is not precise. As per Sub- Clause (a) to Section 2(11) of the TN VAT Act, 2006, capital goods means plant, machinery, equipment, apparatus, tools, appliances or electrical installation for producing, making, extracting or processing of any goods or for extracting or for bringing about any change in any substance for the manufacture of final products. 18.The definition also states that the goods should be used in the state for the purpose of manufacture, processing, packing or storing of goods in the course of the business excluding civil structures and such goods as may be notified by the Government. 19. Previously, under Section 3(5) of the TNGST Act,1959 there was a special dispensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by it. Instead, has filed the present Writ Petition. 26. It may be useful to refer to the following passages from the above decision of the Division Bench in M/S.Schwing Stetter (India) Pvt.vs.The Commissioner of Commercial Tax Officer: 26 . Keeping the above fundamental principles in mind, if we have a look at the first ground of attack, it can be seen easily that the same cannot be sustained. The State Legislature is entitled to treat a particular item or good as a capital good, when used within the State. It may not even be a capital good in common parlance. Similarly, a particular good which is treated as capital good in all other States, may be treated differently by one State, provided the law making it so, passes the tests indicated above. 27. As rightly pointed out by Dr.Anita Sumanth, learned Special Government Pleader (Taxes), Sub-section (3) of Section 3 of the TNGST Act, 1959, used the expression inside the State and Sub- Section (5) of the very same Section used the expression use in his factory site situate within the State . The relevant parts of Subsections (3) and (5) of The TNGST ACT, 1959 read as follows:- (3) Notwithstanding any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly conveyed, there is no scope for the Court to take upon itself the task of amending or alternating the statutory provisions. Wherever the language is clear the intention of the Legislature is to be gathered from the language used. While doing so what has been said in the statute as also what has not been said has to be noted. The construction which requires for its support addition or substitution of words or which results in rejection of words has to be avoided. As stated by the Privy Council in Crawford v. Spooner [(1846) 6 Moore PC 1] we cannot aid the Legislature's defective phrasing of an Act, we cannot add or mend and, by construction make up deficiencies which are left there . In case of an ordinary word there should be no attempt to substitute or paraphrase of general application. Attention should be confined to what is necessary for deciding the particular case. This principle is too wellsettled and reference to few decisions of this Court would suffice. [See: Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests, Palghat and Anr. (AIR 1990 SC 1747), Union of India and Anr. v. Deoki Nandan Aggarwal (AIR 1992 SC 96), Institute of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. We have already extracted the provision. It is no doubt an exhaustive definition and it contains two distinctive parts. Clause (a) of Section 2(11) is one part. Clauses (b) to (g) comprise the other part. If the good in question falls under any one of the categories mentioned in Clause (a), such as plant, machinery, equipment, apparatus, tools, appliances or electrical installation, it would be treated as capital good, provided it is used for producing, making, extracting or processing of any goods or for extracting or for bringing about any change in any substance for the manufacture of final products . If the good in question falls under any one of the categories mentioned in Clauses (b) to (g), it should be used for the purpose of manufacture, processing, packing or storing of goods in the course of business. But, civil structures and such goods as may be notified by the Government are excluded. 75. Though many of the other expressions used in Section 2(11) are not further defined in the Act, the expression manufacture is defined in Section 2(27) as follows: manufacture with its grammatical variations and cognate expressions means producing, making, extracting, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale or commerce to a registered dealer in another state, a registered dealer has to pay tax at the lower of the two rates whereas in the case of sale in the course of inter-state trade and commerce to a person who is not a registered dealer, CST is payable at the rate applicable to the goods within State. 32. During the period in dispute, goods falling under Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006 were liable to tax at 4%. It is the contention of the petitioner that it sold capital goods as defined in section 2 (11) of the Tamil Nadu Vat Act, 2006 and therefore was liable to pay tax at the lower rate under Entry 25, Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006. 33. If the goods traded by the petitioner in the course of interstate sale fell under the category of capital goods under sub-clause (a) of Section 2(11), the petitioner would be liable to pay tax at 4% in terms of rate prescribed under Entry 25 to Part B to the 1st Schedule of Tamil Nadu Vat Act, 2006. 34. On the other hand, if the goods traded by the petitioner in the course of inter-state sale fell outside within the purview of sub clause (b) to (g) of Section 2(1), they are not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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