Gujarat High Court
Jtc Limited vs State Of Gujarat on 9 March, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/TAXAP/1334/2007 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 1334 of 2007
With
R/TAX APPEAL NO. 730 of 2017
With
R/TAX APPEAL NO. 731 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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JTC LIMITED
Versus
STATE OF GUJARAT
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Appearance:
Tax Appeal No.1334/2007
MR SN SOPARKAR, SR COUNSEL WITH MR PRATIK B BAROT for the
Petitioner.
MS SHRUTI PATHAK, AGP for the Respondent.
Tax Appeal No.730/2017
MS SHRUTI PATHAK, AGP for the petitioner.
Ms. SANGEETA N PAHWA for the respondent.
Tax Appeal No.731/2017
MS SHRUTI PATHAK, AGP for the petitioner.
Ms. SANGEETA N PAHWA for the respondent.
Page 1 of 20
C/TAXAP/1334/2007 JUDGMENT
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 08,09/03/2018
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. These three appeals present slightly different facts but common question of law. For convenience, in all three appeals, we freshly frame the common substantial question of law as under :
Whether in facts and circumstances of the case, tax credit entitlement of the dealer was required to be reduced in terms of clause(b) of subsection (3) of section 11 of the Value Added Tax Act?
2. We may briefly record facts in each case. The assessee M/s. JCT Limited who has filed Tax Appeal No.1334/2007, is a dealer engaged in the business of manufacturing and sale/purchase of various types of textile products. Caprolactum is one of the inputs used by the assessee which is purchased from Gujarat State Fertilizers and Chemicals Ltd. This is used for manufacturing of yarn which in turn is sold within as well as outside the State. On purchase of such raw material, the assessee pays Value Added Tax ("VAT" for short) at the prescribed rate. Upon manufacture and sale of goods, the assessee claims tax credit of the tax so paid for the Page 2 of 20 C/TAXAP/1334/2007 JUDGMENT purchase of caprolactum under section 11 of the Gujarat Value Added Tax Act, 2003 ("the VAT Act" for short).
The State however, opposes the assessee's claim of tax credit on the ground that such raw material is sent by the assessee to its factory situated at District Hoshiarpur, Punjab, for converting into nylon filament yarn before it is returned to the assessee in Gujarat, from where it is sold to its different customers within and outside the State. The assessee contends that the tax credit is available in terms of section 11 of the VAT Act. The case of the assessee would fall under subclause(vi) of clause(a) of subsection (3) of section 11 and it would not be limited as envisaged under clause(b) of subsection (3) of section 11.
The issue ultimately reached the Gujarat Value Added Tax Tribunal ("the Tribunal" for short). The Tribunal by the impugned judgment dated 1.5.2007 held against the assessee. The Tribunal noted that the assessee had sent raw material to its factory situated at Punjab for converting into nylon filament yarn. Such finished goods were received back at Surat and then sold to customers within as well as outside the State. The Tribunal was of the opinion that such a situation would fall within clause (b) of subsection (3) of section 11 and the tax credit would be subjected to reduction as provided therein. The Tribunal held that the goods were consigned or dispatched for branch transfer and therefore, in terms of section 11(3)(b), the tax credit had to be reduced by 4%. In fact, the Tribunal went to the Page 3 of 20 C/TAXAP/1334/2007 JUDGMENT extent of stating that when the goods had been sent to other State for whatever reason or purpose, section 11(3)(b) would apply. Against this judgment, the assessee is in appeal.
3. Tax Appeal No.731/2017 is filed by the Government in case of M/s. Mohit Industries Ltd. challenging the judgment of the VAT Tribunal dated 13.8.2015. In this case, the respondent assessee is a registered dealer and is engaged in trading of yarn and is also engaged in the process of crimping and texturing. The assessee's place of business is situated at Olpad, Surat and also has a branch at Masat, Union Territory of Silvasa where the assessee's manufacturing unit is located. The appellant would purchase raw material which is POY yarn on which tax would be paid and credit would be available. The assessee would send such duty paid goods for the process of crimping and texturing at its unit at Silvasa. After completing such process, the goods would be transferred back to the assessee's principal place of business at Surat.
In this case also, the Revenue objected to the assessee availing tax credit under section 11 of the VAT Act of the tax paid on purchase of raw material, again citing the reasons that once the goods have travelled outside the State, the tax credit had to be reduced in terms of clause(b) of subsection (3) of section 11. The issue ultimately reached the Tribunal. The Tribunal held in favour of the assessee. Judgment of the Tribunal in case of M/s. JCT Page 4 of 20 C/TAXAP/1334/2007 JUDGMENT Limited was cited but distinguished though we do not find any material factual difference so far as applicability of section 11 of the VAT Act is concerned. Be that as it may, this judgment of the Tribunal has compelled the State to file the appeal.
4. Tax Appeal No.730/2017 is filed by the State Government in case of the same assessee M/s. Mohit Industries Ltd.. The main issue is of the assessee's availment of tax credit unhindered by clause(b) of subsection(3) of section 11 in identical facts. Additional issue is whether the Tribunal could have entertained the appeal of the assessee on merits when the order in challenge before the Tribunal passed by the appellate authority was of dismissing the assessee's appeal for not fulfilling the predeposit requirement.
5. Appearing for the appellant M/s. JCT Limited, learned counsel Shri Soparkar contended that the assessee is allowed to avail the tax credit on duty paid goods purchased by the assessee and used as raw material. In particular, he drew our attention to subsection(3) of section 11 and contended that case of the assessee falls squarely within clause (vi) thereof. He argued that clause
(b) of subsection(3) of section 11 is not applicable in case of the assessee. The endeavor on part of the State to reduce the tax credit by 4% is therefore, erroneous. He argued that for applicability of the said clause(b), the case of the assessee has to fall under any one of the three sub Page 5 of 20 C/TAXAP/1334/2007 JUDGMENT clauses. Clearly case of the assessee does not fall in any of these subclauses. Neither the taxable goods are consigned or dispatched for branch transfer to the agent of the assessee outside the State nor the taxable goods which are used as raw materials are dispatched outside the State in the course of branch transfer or consignment or to the agent of the assessee outside the State. Clearly sub clause(iii) which refers to fuels used for the manufacture of goods is inapplicable. He argued that the Tribunal committed a serious error in not appreciating the entire process. The assessee sent raw material outside the State to its own branch for carrying out manufacturing activity, upon completion of which the finished goods would be sent back to Gujarat, from where it would be sold within the State as well as outside the State, upon which the duty at the prescribed rates would be paid. Accepting the viewpoint of the Revenue would bring about a situation where the assessee though would have purchased duty paid goods from registered dealers and also paid VAT to the State depending on whether the sale is local sale or interState sale, would be deprived of the benefit of tax credit which is not the intention of the legislature.
6. Learned counsel Ms. Pahwa appearing for M/s. Mohit Industries Ltd. submitted that the Tribunal has in her case considered the issue in proper perspective. In addition to adopting the interpretation canvased by the counsel Shri Soparkar in this regard, she also drew our attention to the rules of other States where under similar circumstances, Page 6 of 20 C/TAXAP/1334/2007 JUDGMENT the facility of tax credit is made available to a dealer. For example, she drew out attention to rule 53 of Maharashtra VAT Rules pertaining to reduction in setoff. Subrule(3) thereof covers a situation where a claimant dealer dispatches any taxable goods outside the State to any place within India, not by reason of sale, to his own place of business or his agent. In such a case, there would be a reduction of 4% from the amount of setoff otherwise available in respect of the purchases. Further proviso to this subrule however, provides that deduction in this sub rule shall not apply if the goods dispatched are brought back to the State within six months of the date of dispatch whether after processing or otherwise.
7. Learned AGP Ms. Shruti Pathak in both sets of appeals canvased the point of view of the department. Her interpretation of the section was that since the goods in question had travelled outside the State by way of branch transfer, reduction provided in clause(b) of subsection(3) of section 11 would automatically apply. Merely because goods later on were returned after carrying out some manufacturing process would not make the said provision inapplicable. Learned AGP contended that subclause(iii) of clause (a) of subsection(3) is made specifically subject to the provision of subclause(b). Subclause(b) itself starts with a nonobstante clause. She placed heavy reliance on a recent judgment of Supreme Court in case of State of Gujarat v. Reliance Industries (Civil Appeal No.13047/2017 and connected matter, judgment dated Page 7 of 20 C/TAXAP/1334/2007 JUDGMENT 22.9.2017).
8. Section 3 of the VAT Act, which is a charging section, pertains to incidence of tax. Section 7 pertains to levy of tax on turnover of sales and rates of tax. Section 11 pertains to tax credit and reads as under :
"Tax credit (1)(a) A registered dealer who has purchased the taxable goods (hereinafter referred to as the "purchasing dealer") shall be entitled to claim tax credit equal to the amount of,
(i) tax collected from the purchasing dealer by a registered dealer from whom he has purchased such goods or the tax payable by the purchasing dealer to a registered dealer who has sold such goods to him during the tax period, or
(ii) tax paid by him during the tax period under subsection (1), (2), (5) or (6) of section 9, or
(iii) tax paid by the purchasing dealer under the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001.
(b) The tax credit to be so claimed under this subsection shall be subject to the provision of subsections (2) to (12);
and the tax credit shall be calculated in such manner as may be prescribed.
(2) The registered dealer who intends to claim the tax credit shall maintain the register and the books of accounts in such manner as may be prescribed.
(3)(a) Subject to the provisions of this section, tax credit to be claimed under subsection (1) shall be allowed to a purchasing dealer on his purchase of taxable goods which are intended for the purpose of
(i) sale or resale by him in the Sate;
(ii) sale in the course of interState trade and commerce, Page 8 of 20 C/TAXAP/1334/2007 JUDGMENT other than the sales in the course of export out of the territory of India;
(iii) branch transfer or consignment of taxable goods to other States (subject to the provision of subclause(b) below;
(iv) sales in the course of export out of the territory of India;
(v) sales to export oriented units or the units in Special Economic Zones for sale in the course of export out of the territory of India;
(vi) Use as raw material in the manufacture of taxable goods intended for (i) to (v) above or in the packing of the goods so manufactured.
(vii) use as capital goods meant for use in manufacture of taxable goods intended for (i) to (vi) above subject to the condition that such capital goods are purchased after the appointed day Provided that if purchases are used partially for the purposes specified in this subsection, the tax credit shall be allowed proportionate to the extent they are used for the purposes specified in this subsection.
(b) Notwithstanding anything contained in this section, the amount of tax credit in respect of a dealer shall be reduced by the amount of tax calculated at the rate of four per cent. on the taxable turnover of purchases within the State
(i) of taxable goods consigned or dispatched for branch transfer or to his agent outside the state, or
(ii) of taxable goods which are used as raw materials in the manufacture, or in the packing of goods which are dispatched outside the State in the course of branch transfer or consignment or to his agent outside the State.
(iii) of fuels used for the manufacture of goods.
Provided that where the rate of tax, of the taxable goods Page 9 of 20 C/TAXAP/1334/2007 JUDGMENT consigned or dispatched by a dealer for branch transfer or to his agent outside the State is less than four per cent., then the amount of tax credit in respect of such dealer shall be reduced by the amount of tax calculated at the rate of tax set out in the Schedule on such goods on the taxable turnover of purchases within the State.
(4) The tax credit shall not be claimed by the purchasing dealer until the tax period in which he receives from a registered dealer from whom he has purchased taxable goods, a tax invoice (in original) containing particulars as may be prescribed under subsection (1) of section 60 evidencing the amount of tax.
(5) Notwithstanding anything contained in this Act, tax credit shall not be allowed for purchases
(a) made from any person other than a registered dealer under this Act;
(b) made from a dealer who is not liable to pay tax under this Act;
(c) made from a registered dealer who has been permitted under section 14, 14A, 14B, 14C or 14D to pay lump sum amount of tax in lieu of tax;
(d) made prior to the relevant date of liability to pay tax as provided in subsection (3) of section 3;
(dd) made prior to the date of registration;
(e) made in the course of interState trade and commerce;
(f) of the goods (not being taxable goods dispatched outside the State in the course of branch transfer or consignment) which are disposed of otherwise than in sale, resale or manufacture;
(g) of the goods specified in the Schedule I or the goods exempt from whole of tax by a notification under sub section (2) of section 5;
(h) of the goods which are used in manufacture of goods Page 10 of 20 C/TAXAP/1334/2007 JUDGMENT specified in Schedule I or the goods exempt from the whole of the tax by a notification under subsection (2) of section 5 or in the packing of goods so manufactured;
(i) of capital goods used in the manufacture of goods specified in Schedule I or the goods exempt from the whole of the tax by a notification under subsection (2) of section 5 or in generation of electrical energy including captive power;
(j) of vehicles of any type and its equipment, accessories or spare parts (expect when purchasing dealer is engaged in the business of sales of such goods)
(k) of the property or goods not connected with the business of the dealer;
(l) of the goods which are used as fuel in generation of electrical energy meant for captive use or otherwise;
(ll) of petrol, high speed diesel, crude oil and lignite unless such purchase is intended for resale;
(m) of the goods which are used as fuel in motor vehicles;
(mm) of capital goods, used in transfer of property in goods (whether as goods or in some other form) involved in execution of works contract;
(mmm) of the goods for which right to use is transferred for any purpose (whether or not for a specified period), for cash, deferred payment or other valuable considerations;
(mmmm) made from a dealer after the name of such dealer has been published under subsection (11) of section 27 or section 97;
(n) of the goods which remain as unsold stock at the time of closure of business;
(nn) of the goods purchased during the period when the permission granted under clause (a) of subsection (1) of section 14 has remained valid under clause (b) of that sub section;
Page 11 of 20C/TAXAP/1334/2007 JUDGMENT
(o) where original invoice does not contain the details of tax charged separately by the selling dealer from whom purchasing dealer has purchased the goods;
(p) where original tax invoice or duplicate thereof duly authenticated in accordance with the rules made in this behalf is not available with purchasing dealer or there is evidence that the same has not been issued by the selling dealer from whom the goods are purported to have purchased;
(I) Notwithstanding anything contained in clause (a) or (b) in this subsection and subject to conditions as may be prescribed, a registered dealer shall be allowed to claim tax credit in respect of purchase tax paid by him under sub section (1) or (2) of section 9.
(II) Notwithstanding anything contained in clause (d) or (dd) in this subsection and subject to such conditions and in such manner as may be prescribed, a registered dealer shall be allowed to claim tax credit for the taxable goods held in stock on the date of registration which are purchased after 1st April, 2008 and during the period of one year ending on the date of registration.
(III) Notwithstanding anything contained in clause (nn) in this subsection and subject to such conditions and in such manner as may be prescribed, a registered dealer, whose permission to pay lump sum tax under section 14, -
(a) is no longer valid on account of total turnover exceeding rupees fifty lakhs, or
(b) is cancelled on request by such dealer, and becomes liable to pay tax under section 7, shall be allowed to claim tax credit for the taxable goods held in stock which are purchased after 1st April, 2008 and during the period of one year ending on the date of liability to pay tax under section 7.
(6) The State Government may, by notification in the Official Gazette, specify any goods or the class of dealers Page 12 of 20 C/TAXAP/1334/2007 JUDGMENT that shall not be entitled to whole or partial tax credit.
(7) Where a registered dealer without entering into a transaction of sale, issues to another registered dealer tax invoice, retail invoice, bill or cash memorandum with the intention to defraud the Government revenue or with the intention that the Government may be defrauded of its revenue, the Commissioner may, after making such inquiry as he thinks fit and giving a reasonable opportunity of being heard, deny the benefit of tax credit, in respect of such transaction, to such registered dealers issuing or accepting such tax invoice, retail invoice, bill cash memorandum either prospectively or retrospectively from such date as the Commissioner may, having regard to the circumstances of the case, fix.
(7A) Notwithstanding anything contained in this section, in no case the amount of tax credit on any purchase of goods shall exceed the amount of tax in respect of the same goods, actually paid, if any, under this Act or any earlier law into Government treasury;
Provided that where purchase tax is shown as payable in the return by the claimant dealer on the purchase of the said goods effected by him, it shall be deemed to have been paid into Government treasury for the purpose of this sub section Provided further that, where the tax levied or leviable under this Act or any earlier law is remitted or to be remitted or, deferred or is deferrable under any tax, incentive scheme granted by the Government of Gujarat then the tax shall be deemed to have been paid into the Government treasury for the purpose of this subsection (8)(a) If the goods purchased were intended for the purposes specified under subsection (3) and are subsequently used fully or partly for purposes other than those specified under the said subsection or are used fully or partly in the circumstances described in subsection (5), the tax credit, if availed of, shall be reduced on account of such use, from the tax credit being claimed for the tax period during which such use has taken place; and such reduction shall be done in the manner as may be Page 13 of 20 C/TAXAP/1334/2007 JUDGMENT prescribed.
(b) Where the capital goods referred to in subclause (vii) of clause (a) of subsection (3) are not used continuously for a full period of five years, in the State, the amount of tax credit shall be reduced proportionately having regard to the period falling short of the period of five years (9) The registered dealer may claim the amount of net tax credit, which shall be determined in the manner as may be prescribed.
(10) Where any purchaser, begin a registered dealer, has been issued with a credit note or debit note in terms of section 61 or if he returns or rejects goods purchased, as a consequence of which the tax credit availed by him in any period in respect of which the purchase of goods relates, becomes either short or excess, he shall compensate such sort or excess by adjusting the amount of tax credit allowed to him in respect of the tax period in which the credit note or debit note has been issued or goods are returned, subject to such conditions as may be prescribed.
(11) A registered dealer shall apply fair and reasonable method to determine, for the purpose of this section, the extent to which the goods are sold, used, consumed or supplied, or intended to be sold, used, consumed or supplied. The Commissioner may, after giving the dealer am opportunity of being heard and for the reasons to be recorded in writing, reject the method adopted by the dealer and calculate the amount of tax credit as he deems fit.
(12) Subject to the exceptions as may be prescribed by the rules, any dealer including the Commission agent shall not be permitted to transfer his tax credit to any other dealer or as the case may be, the principal.
Explanation. For the purpose of this section, the amount of tax credit on any purchase of goods shall not exceed the amount of tax actually paid or payable under this Act in respect of the same goods."
Page 14 of 20C/TAXAP/1334/2007 JUDGMENT
9. A quick glance at this section would show that under sub section(1) of section 11, a registered dealer who has purchased the taxable goods is entitled to claim tax credit of the amount specified therein. Such tax credit will be subject to the provisions of subsections(2) to (12) therein. Clause(a) of subsection(3) of section 11 would enable a purchasing dealer to claim tax credit on his purchase of taxable goods which are intended for seven different purposes specified therein. Subclauses(i) to (v) pertain to sale or resale by him in the State, sale in the course of interState trade and commerce, branch transfer or consignment of taxable goods to other States, sales in the course of export and sales to export oriented units or units in the Special Economic Zones. Clause(vi) pertains to use as raw material in the manufacture of taxable goods intended for (i) to (v) or in the packing of the goods so manufactured. Clearly the assessee's case was covered by this clause since he purchased raw material intending it to be used in manufacturing of taxable goods which in turn were intended for sale within the State or interState trade. As noted earlier, for the restrictions of clause(b) to apply, case of the assessee must fall in any one of the three sub clauses contained therein. Since subclause(iii) pertains to fuels used for the manufacture of goods, is clearly inapplicable. We may therefore, focus our attention to remaining two subclauses. Subclause(i) takes within its fold taxable goods consigned or dispatched for branch transfer or to the assessee's agent outside the State. Sub clause(ii) covers a situation where taxable goods which are Page 15 of 20 C/TAXAP/1334/2007 JUDGMENT used as raw materials in the manufacture or in the packing of goods which are dispatched outside the State in the course of branch transfer or consignment or to the agent of assessee outside the State. Neither the term 'branch transfer' nor 'consignment to an agent' is defined under the Act. However, concepts of branch transfer or consignment to an agent are fairly well understood in the trade. An assessee may have a manufacturing unit or a principal place from where the goods in the process of its dealing business would be sent outside the State to its own branch or to an agent, if the assessee is operating through such an agent. At that point of time, there would be no event of sale of goods. The goods would be sold either to a predecided buyer or in some cases would be stored at such a place of transfer awaiting orders from ultimate buyers. It is at this point of time the actual sale of goods would take place. In the context of sales tax or VAT tax therefore, these concepts of branch transfer or transfer to consignment agents outside the State have special connotation.
10. In case of Hyderabad Engineering Industries v. State of Andhra Pradesh reported in (2011) 4 Supreme Court Cases 705, the Supreme Court in the context of collecting VAT on interState sales, observed as under :
"23. It is an accepted position in law that a mere transfer of goods from a head office to a branch office or an inter branch transfer of goods, which are broadly brought under the phrase "branch transfers" cannot be regarded as sales in the course of interState trade, for the simple reason Page 16 of 20 C/TAXAP/1334/2007 JUDGMENT that a head office or branch cannot be treated as having traded with itself or sold articles to itself by means of these stock transfers."
11. The present is not a case either of branch transfer or transfer to a consignment agent. Undoubtedly, the raw material was transported to the assessee's branch situated outside the State but it can still not be treated as a branch transfer. It was transfer of the goods for manufacturing activity and the goods were returned back to the assessee's principal place of business in the form of finished product. It is this finished product which was eventually sold by the assessee either within the State or by way of interState sale and prescribed duty at the prescribed rates was paid. In our opinion, therefore, clause(b) of subsection(3) of section 11 did not apply so as to allow the department to reduce the assessee's tax credit by prescribed percentage.
12. We are conscious that subclause (iii) of clause(a) of subsection(3) of section 11 is made specifically subject to the provision of subclause(b). Correspondingly sub clause(b) starts with a nonobstante clause providing, that notwithstanding anything contained in the said section, the amount of tax credit would be reduced in the manner provided therein. However, this would not change our opinion on the correct interpretation of the said provision. Firstly, it is only subclause(iii) which is made specifically subject to the provision of subclause(b). Subclause(iii) refers to branch transfer or consignment of taxable goods outside the State. Subclauses (i) and (ii) of clause (b) have Page 17 of 20 C/TAXAP/1334/2007 JUDGMENT direct relation to these instances. For example, sub clause(i) pertains to taxable goods consigned or dispatched for branch transfer or to an agent outside the State where as subclause(ii) refers to taxable goods which are used as raw materials which in turn are dispatched outside the State in the course of branch transfer or on consignment basis. We are conscious that subclauses (i), (ii) and (iii) of clause(b) has no such direct corelation with subclause(iii) of clause(a). However, we may notice that in the original form clause(b) of subsection(3) of section 11 only contained two subclauses. Subclause(iii) was inserted by the Gujarat Value Added Tax (Amendment) Act, 6 of 2006.
13. Judgment of the Supreme Court in case of Reliance Industries (supra), was rendered in a very different background. The assessee therein was engaged in manufacturing and selling of polymers and chemicals. Such goods were manufactured by the assessee in a factory situated in the State of Gujarat. Such manufactured goods were transferred by the assessee to its various branches located outside the State. For manufacturing such goods, the assessee would purchase furnace oil, natural gas and light diesel oil from registered dealers. The fuel would be used for the manufacturing activity. In view of the fact that the goods were sent outside the State by way of branch transfer, the tax credit on purchase of raw material including the fuel would be restricted by virtue of applicability of clause(b) of sub section(3) of section 11. The assessee was willing to suffer Page 18 of 20 C/TAXAP/1334/2007 JUDGMENT such reduction only once. However, the Revenue argued that being fuel, the same would fall within subclause(iii) of clause(b) of subsection(3) of section 11 as well and that therefore, the reduction should be applied twice. The High Court had held that reduction under clause(b) of sub section(3) can be applied only once. Even if the goods were covered in more situations than one, the reduction cannot be applied more than once. The Supreme Court reversed the judgment of the High Court and accepted the viewpoint of the Revenue.
14. In view of discussion above, the question is answered in favour of the assessees and against the department. Tax appeal No. 1334/2007 is allowed. Judgment of the Tribunal is reversed. Tax Appeal No.731/2017 is dismissed. Judgment of the Tribunal is upheld. In Tax Appeal No.730/2017, as noted at the outset, appeal before the Tribunal was filed by the assessee challenging the judgment of the appellate Commissioner who had dismissed the appeal for want of satisfying the predeposit requirement. That being the sole question, it was not correct on part of the Tribunal to examine the merits of the assessee's claim and the department's opposition. Ordinarily, we would have placed the matter before the Tribunal to consider this limited question alone. However, the facts in the present case are extremely peculiar. We have given finality to the law point involved in the case of this very assessee concerning another assessment year. Remanding the proceedings before the Tribunal therefore, Page 19 of 20 C/TAXAP/1334/2007 JUDGMENT would be wholly unnecessary. As an exceptional case, therefore, we do not disturb the Tribunal's judgment. Such tax appeal is also dismissed.
(AKIL KURESHI, J.) (B.N. KARIA, J.) raghu Page 20 of 20