COMMERCIAL ENGINEERS & BODY BUILDING COMPANY LTD. Vs. DIVISIONAL DEPUTY COMMISSIONER, COMMERCIAL TAX OFFICE AND ORS.

JUDGEMENT

(1.) Challenge in this petition under Article 226 and 227 of the Constitution is made to an order dated 28.2.2015 passed by the Divisional Deputy Commissioner, Commercial Tax, Jabalpur, imposing tax liability on the petitioner's establishment in accordance to the provisions of Madhya Pradesh Value Added Tax (hereinafter referred to as 'the VAT' ). The legal question canvassed by the petitioner in this petition is as to whether the petitioner is entitled to Input tax credit while determining their liability under the VAT Act ? And as to what is the exact meaning of certain provisions contained in Section 14 of the M.P. VAT Act providing for Input tax credit? The issue is as to whether the petitioner is entitled to Input Tax credit in respect of tax paid Input purchased from a registered dealer used by the assessee in manufacturing of the final product ?

(2.) Petitioner has its manufacturing units in various places as are indicated in para 5.1 of the writ petition and its principal commercial place of business is situated in Napier Town, Jabalpur. They carry out manufacturing of the bodies for motor vehicles, their components, railway components and E.S.P. Components like filters to be used in power plants etc. Apart from manufacturing and sale of these articles job work on behalf of the railway administration is also carried out in the business premises of the petitioner.

(3.) It is a case of the petitioner that for the purpose of manufacturing bodies of motor vehicle, petitioner had purchased certain components for a total amount of Rs.97,99,69,327/- from a registered dealer M/s Vijay Steel Yard. The components so purchased are ultimately used in the manufacturing of the final product. Infact, the components purchased was used for fabricating plant and machinery which is then used for manufacturing of the final manufacturing product i.e. the motor vehicle body. It is a case of the petitioner that the material purchased from M/s Vijay Steel Yard were tax paid and are converted into components which is used for creating the final product, therefore, the benefit of rebate on input tax as provided under Section 14 of the VAT Act is to be granted to the petitioner. However, as the revenue has held in the impugned assessment order that the material so purchased from M/s Vijay Steel Yard are consumed by the petitioner and not sold, the benefit of Section 14 or rebate on the input tax cannot be granted.