MVR GAS Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) THE appellant, a registered dealer under the Karnataka Sales Tax Act, 1957 ("the Act", for short), engaged in the business of sale of LPG (liquid petroleum gas ).

(2.) THE appellant purchases LPG in bulk from M/s. Reliance Industries Limited and fills it in small cylinders of different capacities and sells such gas in cylinders. It is stated that transferring gas from a bulk container into small cylinders is a complicated process involving use of compressors, evacuating systems, filling guns, etc. It is alleged that without the use of such machinery/equipment, it will not be possible to transfer gas which is received by it in bulk to small cylinders. It is submitted that machinery that are used by the appellant for this purpose fall under Entry 1 (iii) (a) of Part M of the Second Schedule to the Act.

(3.) THE Government of Karnataka, by notification dated March 31, 2000 issued under Section 8a of the Act reduced the tax payable by a dealer under Section 5 of the Act in respect of sale of machinery and tools specified in Sl. No. 1 (iii) (a) of Part M of the Second Schedule to an industrial unit located in the State for use by such unit in the manufacture or processing of goods for sale, to four per cent. Appellant wants to purchase some machinery and equipment falling under entry Kiiixa) of Part M of the Second Schedule for being used in its unit, for transferring lpg from bulk container to small cylinders. The appellant contends that its activity of transferring LPG from bulk container to smaller cylinders amounts to "manufacturing or processing of goods for sale" and any machinery used for that purpose will be eligible for the concessional rate of tax under a notification dated March 31, 2000. To get the position clarified, the appellant made an application to the Authority for Clarification and Advance Rulings under section 4 of the Act posing the following question : whether form 37 can be issued for purchase of the following goods required for breaking of bulk gas to fill in cylinders,-1. Bullets, 2. Compressors, 3. Pipeline, 4. Evacuating system, 5. Safety valves, 6. Ball valves, 7. Filling guns, 8. Dip testing system, etc.