COMMERCIAL TAXES OFFICER Vs. A INFRASTRUCTURE LTD.

JUDGEMENT

(1.) This batch of appeals, by special leave, calls in question the legal acceptability of the common order dated 19th December, 2013 passed by the learned Single Judge of the High Court of Judicature for Rajasthan, at Jodhpur in a batch of revision petitions filed by the assessee -respondent assailing the judgment dated 23.11.2011 passed by the Rajasthan Tax Board, Ajmer (for short 'the Board ') in Appeal No. 680 of 2009 and other connected appeals whereby it had affirmed the decision rendered in appeals by the Deputy Commissioner (Appeals) who had upheld the assessment orders passed by the Commercial Taxes Officer in respect of various quarters of the years 2006 -2007, 2007 -2008 and 2008 -2009 disallowing the claim of Input Tax Credit (ITC) and charging interest under Sections 18, 22 and 55(4) of the Rajasthan Value Added Tax Act, 2003 (for brevity ''the 2003Act '').

(2.) The facts giving rise to this batch of appeals are that the assessee - company is engaged in the business of manufacturing Asbestos Cement Pressure Pipe and Asbestos Cement Sheets and it had availed ITC on the purchase of raw material used in the manufacture of A.C. Sheets. The assessing authority issued notice to the assessee for the purpose of disallowing ITC on purchase of raw material used in manufacturing A.C. Sheets for the period mentioned hereinabove and pursuant to the show cause notice the assessee filed a detailed reply and eventually the assessing authority passed orders under Section 22 of the Act disallowing the ITC and charged interest. The said orders were assailed before the Appellate Authority which declined to interfere with the orders appealed against, compelling the assessee to file second appeals before the Board which placed reliance on ACTO v. M/s. Suncity Trade Agency[1] and dismissed the appeals. The Board while dismissing the appeals opined that the assessee - Company, a manufacturing unit, had not been charged on the sales of its product, as per the notification which squarely fall under the definition of exempted goods and hence, the final product was exempted, but it was not entitled to avail ITC as the notification clearly postulated that the units/institution was not exempted from the tax but the sales of its goods were exempted from tax as per the definition of ''Exempted Goods ''.

(3.) The grievance of dismissal constrained the assessee to file the revision petitions before the High Court, and seeking interference in the revision petition it was contended that the scheme of Section 8 of the Act which deals with exemption of tax and the notification issued under the Rajasthan Sales Tax Act, 1994 (for short, 'the 1994 Act ') and the various notifications issued under the said Act from time to time deal with A.C. Sheets and in view of the postulates laid down in the notification dated 09.03.2007, issued under sub -section (3A) of Section 8 wherein the manufacturer of asbestos cement sheets and bricks have been exempted and, therefore, it could not be said that A.C. Sheets manufactured by the assessee were exempted goods which is the pre -requisite for denying ITC under Section 18 of the Act. Reliance was placed on the judgment of ACTO v. Abishek Granites Ltd.[2] to buttress the proposition that exemption to unit is different from the exemption to the transaction of sale of the commodity. It was also highlighted before the High Court that when two views are possible, the view in favour of the assessee should be accepted and for the said purpose reliance was placed on CIT v. Kulu Valley Transport Co. (P) Ltd[3]. The background of the issue of notification dated 09.03.2007 and the communication issued by the Commissioner, Commercial Taxes, Rajasthan, Jodhpur were stressed upon to bolster the plea that assessee was exempted from tax and not the A.C. Sheets manufactured by it.