Hon'ble BHANSALI, J.—These revision petitions are directed against judgment dated 23.11.2011 passed by the Rajasthan Tax Board, Ajmer (`the Board'), whereby, the appeals filed by the petitioner against the orders of Dy. Commissioner (Appeals), Commercial Taxes, Udaipur (`DC (Appeals)') dated 16.4.2009 upholding the assessment orders passed by the Commercial Taxes Officer, (Special Circle), Bhilwara (`the Assessing Authority') dated 20.5.2008 and 25.8.2008 for various quarters of the year 2006-07, 2007-08 and 2008-09 disallowing the claim of Input Tax Credit (`ITC') and charging interest under Sections 22, 18 and 55(4) of the Rajasthan Value Added Tax, 2003 (`the Act'), were dismissed.

2. The facts in brief may be noticed thus: the petitioner Company is engaged in the business of manufacturing Asbestos Cement Pressure Pipe and Asbestos Cement Sheets (`A.C. Pressure Pipe and A.C. Sheets'); the petitioner availed ITC on the purchase of raw material used in the manufacture of A.C. Sheets; the Assessing Authority issued notices to the petitioner for disallowing ITC on purchase of raw material used in manufacturing A.C. Sheets for the period under reference; the petitioner filed its detailed reply to the notice; however, not accepting the reply, the Assessing Authority while passing orders under Section 2 of the Act disallowed the ITC and charged interest.

3. The petitioner filed appeals before the DC (Appeals), however, the appellate authority also rejected the appeals by common judgment dated 16.4.2009.

4. Aggrieved, the petitioner filed second appeals before the Board, however, the Board after hearing the parties, while relying on the judgment of this Court in ACTO vs. M/s. Sun city Trade Agency: (2006) 147 STC 405, also dismissed the appeals observing and holding thus:-

"This bench confirms the finding of DC (Appeals) that the appellant company, a manufacture of A.C. Sheets, which has not charged VAT on their sales is exempt from tax on sale of its manufacture product, as per notification, meaning thereby that not the unit/institution is exempt from tax but the sales of its goods are exempt from tax, which squarely fall under the definition of exempted goods. Therefore the A.C. Sheets manufactured and sold by the appellate company are exempted goods and thus not eligible for availing ITC. We agree with the view taken by the appellate authority on the issues of the case and find no cause to interfere in his order."

5. It is contended by learned counsel for the petitioner that the Board fell in error in affirming the judgment passed by the DC (Appeals); the Board failed to take into consideration the real purpose and purport of the provisions of the Act, the notifications issued thereunder as applicable to the petitioner and the basic principles of interpretation of statutes. Learned counsel made submissions on the scheme of Section 8 of the Act, which deals with exemption of tax, the history of exemption notifications issued under the Rajasthan Sales Tax Act, 1994 and various notifications issued under the Act from time to time dealing with A.C. Sheets; further, principally submitting that in terms of notification dated 9.3.2007 issued under Sub-section (3A) of Section 8, it is the `manufactures of Asbestos Cement Sheets and Bricks' who have been exempted and, therefore, it cannot be said that the `A.C. Sheets' manufactured by the petitioner are `exempted goods', which is a prerequisite for denying ITC under Section 18 of the Act.

6. Reliance was placed on the judgment of this Court in ACTO vs. Abhishek Granites Ltd.: 23 Tax-World 285 in support of the contention that exemption to unit is different from exemption to the transaction of sale of the commodity and (1970) 2 SCC 192: CIT vs. Kulu Valley Transport Co. (P) Ltd. to support the contention that if two views are possible, view in favour of assessee should be accepted.

7. Reliance was also placed on certain notifications issued under the Act in relation to Self Help Groups and Inst

Click Here to Read the rest of this document