1. Seizure – Release order in Part

Under Section 48 of the up Vat Act, there is no embargo of releasing the Seized goods in part. In the absence of any provisions, it is the discretion of the authority to release the goods either upon receiving the entire amount as demanded or release a part of goods upon furnishing security to that extent.

(Source: Yuvraj Trading Co. v. State of UP and Others, ST Rev. No. 496 of 2015, dated 23rd November, 2015, 2016 NTN (Vol
– 61) 6, (AIl)).

2. Classification of goods – Aluminium grills
– Not integral part of air conditioning or air cooling plant

Aluminium grills can be used at any place in a house or even in an industrial accommodation. One cannot confine its use for air conditioning or cooling equipment alone. Therefore it cannot be classified to be an integral part of the Air conditioning or cooling plant and therefore cannot be taxed @15% applicable to Parts of Air Conditioning or Cooling Plant.

(Source: CCT, UP v. Vikalp Construction Co., ST Rev. No. 565 of 2008, dated 26th February, 2016, (Vol- 61)
– 14 (All)).

3. Manufacture – Polishing and rubbing of silver articles
– Not manufacture

The work of cleaning and polishing of Silver articles will not fall within the definition of word manufacture as contemplated under Section 2 (e-1) of The UP Trade Tax Act, as the purpose of cleaning does not entail a change in the original commodity so that a new and distinct article can be said to have emerged.

(Source: CCT v. M/s. Hari Prasad Gopal Krishna Jewellers Pvt. Ltd., Trade Tax Rev. No. 778 of 2011, dated 18th January, 2016, 2016 NTN (Vol.-61 ) -23 (All)).

4. Input tax credit cannot be denied – for failure to pay tax by selling dealer

Sections 19(16) of The TNVAT Act does not empower the authority to revoke input tax credit availed on a plea that the selling dealer has not paid tax.

(Source M/s. TVI Sri Laxmi Textiles v. CCT, Chennai, WP (MD) No. 17266 of 2015, dated 25th September, 2015, 2016 NTN (Vol 61)
– 32 (Mad)).

5. Input tax credit cannot be denied merely because name of purchasing dealer and tin not mentioned in tax invoice

Under Rule 54(3) of The Haryana Vat Rules, the buyer is required to produce the tax invoice, its name and TIN number entered on it. However, question would be whether the purchaser can be penalized where the seller does not comply with the same. Answer is No. The non-mentioning of buyer’s name or TIN number in tax invoice as it is issued by the seller cannot be taken to be fatal against the buyer and the benefit of input tax credit cannot be declined to the buyer on that basis alone. In that event heavy onus is cast on the buyer to produce material to discharge the said onus by producing other evidences to show that the transaction was genuine.

(Source: M/s. New Devi Grit Udyog v. State of Haryana, VAT APP NO. 37 of 2014, dated 8th September, 2015, 2016 NTN (Vol.-61)
– 35 (P& H)).

5. Deduction of trade discount – not shown in tax invoice

The claim for deduction of the trade discount and performance discount cannot be disallowed solely on the ground that it were not shown in the sale invoices.

(Source: M/s. Titan Industrial Ltd. v. CCT, MP, WP No. 3387 of 2005, dated 4th April, 2016, (2016) 28 STJ 612 (MP)).

6. Production of documents after case closed for order
– needs to be considered

The revisional authority discarded certain documents only on the basis that the same was not produced at the time of hearing of case. It is not the case that the document was produced after the delivery of judgment. In the interest of justice, the order was set aside and matter was remanded for considering the matter afresh after taking into consideration the documents filed by the petitioner.

(Source: M/s. Savera Traders v. STO, Misc. Petition No 2392 of 1988, dated 17th April, 1998, (2016) 28 STJ 629 (MP)).

7. Turnover – Subsidy – Does not form part of turnover

Any payment that does not have any nexus with the sale transaction cannot be included in the definition of turnover. The subsidy granted is not in discharge of any liability or obligation by the Government towards the purchase of the fertiliser. It is a payment made to compensate the importers and manufacturers of fertilisers for the difference between actual cost of production of the fertilisers and the realised price. Such a payment cannot be seen as a payment made to petitioners, on behalf of the purchasers of fertilisers so as to form part of turnover for levy of tax.

(Source: M/s. Indian Potash Ltd. v. State of Kerala & Ors, WP(C) No.
– 8444 & 12320 of 2011, 2741, 6674 & 228 90 of 2012 and 8835, 11732, 13661 & 30884 of 2013, dated 1st December, 2015, (2016) 24 KTR 242 (Ker)).

8. Classification of goods "emami, boroline,
bonphoal oil, aspoline & navratna oil"  – Are drugs & medicine
– Although can be used as cosmetics

Drugs and Medicines are covered by Entry 21 of Fourth Schedule of The Assam Vat Act, 2003 and under Explanation to it, the expression "Drugs and Medicine" shall not include products capable of being used as cosmetics, toilet preparations etc. The said explanation, however, lays emphasis on the term
"shall not include"  and the same is designed to exclude the goods which are primarily cosmetics in use but have a subsidiary use as drugs and medicines. However, when goods which are drugs and medicines in their primary use but have cosmetic use as well cannot be treated as product covered by residual Entry 1 of the Fifth Schedule of the Act. The products involved in proceedings are basically treated as drugs and medicines although they have ancillary use as cosmetics are drugs and medicines covered by Entry 21 of Fourth Schedule of the Act.

(Source: M/s. Emami Ltd & Anr. v. State of Assam & Anr., W. P. (C) No. 3023, 3510, 3593, 4330 and 5622 of 2008, dated 20th March, 2015, (2016) 24 KTR 259 (Guwahati)).

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