STATE OF GUJARAT Vs. RAJASHREE POLYFIL

JUDGEMENT

(1.) BY these appeals under Section 78 of the Gujarat Value Added Tax Act, 2003 (hereinafter to be referred as "the Act"), the appellant -State of Gujarat has challenged the order dated 09.06.2014 passed by the Gujarat Value Added Tax Tribunal, Ahmedabad (hereinafter to be referred as "the Tribunal") in Second Appeals No. 786 and 785 of 2011 by proposing the following question stated to be a substantial question of law: - -

(2.) THE facts stated briefly are that the respondent -assessee is engaged in the business of manufacturing Polyester Filament Yarns, Polyester Chips, Nylon Type Cord, Fabrics, etc. and is duly registered under the provisions of the Act as well as the Central Sales Tax Act. Under Section 11 of the Act, a registered dealer, who has purchased taxable goods (purchasing dealer), is entitled to claim tax credit equal to the amount stated thereunder. However, the amount of tax credit is to be reduced by the amount of tax calculated at the rate 4% on the taxable turnover of purchases within the State which fall within the three categories enumerated under Clause -(b) of sub -section (3) of Section 11 of the Act. In the present case, the Assessing Officer reduced the tax input credit by 4% of the branch transfer under sub -clause (ii) of Clause -(b) of Section 11(3) and thereafter again reduced 4% under sub -clause (iii) of Clause -(b) of Section 11(3). The assessee carried the matter in appeal before the Joint Commissioner (Appeals), who upheld the order passed by the Assessing Officer. The assessee carried the matter in further appeal before the Tribunal on various grounds. On the question of input tax credit, the Tribunal observed that the Assessing Officer had already reduced the input tax credit by 4% of branch transfer and again reduced the same on purchase of the fuels, and hence, the issue was squarely covered by the decision of this High Court in the case of State of Gujarat v. Reliance Industries Ltd., rendered on 18.01.2013 in Tax Appeals No. 934 and 935 of 2012 and reversed the order passed by the authorities below on the said issue.

(3.) ON the other hand, Mr. Jeevan Vasava, learned Advocate for the respondent -assessee invited the attention of the Court to the decision of this Court in the case of State of Gujarat v. Reliance Industries Ltd. (supra) as well as the findings recorded by the Tribunal, to point out that the Tribunal has recorded a finding of fact that the Assessing Officer had already reduced the input tax credit by 4% of branch transfer and again reduced the same on purchase of fuels. It was submitted that this Court, in the above decision, has specifically held that reduction of amount of tax at the rate of 4% is to be done for the taxable goods which fall in any of the three categories contained in sub -clauses (i) to (iii) of Clause -(b) of sub -section (3) of Section 11 and not every time a particular class of goods specified fall in more than one categories. It was submitted that under the circumstances, the Tribunal has merely applied the decision of this Court to the facts of the case and hence, there is no legal infirmity in the order passed by the Tribunal so as to call for interference by this Court.