Assessee was entitled to full deduction of input tax paid on purchases of sunflower oil cake

CST & VAT : Where assessee was engaged in manufacture of refined sunflower oil from sunflower oil cake by employing solvent extraction process and in extraction process it also obtained de-oiled cake, which was exempted from tax, assessee was entitled to full deduction of input tax paid on purchases of sunflower oil cake
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[2014] 51 taxmann.com 6 (Karnataka)
HIGH COURT OF KARNATAKA
M.K. Agro Tech (P.) Ltd.
v.
State of Karnataka*
N. KUMAR AND B. MANOHAR, JJ.
STRP NOS. 774-974 OF 2013†
JULY  17, 2014
Section 10, read with sections 11 and 17, of the Karnataka Value Added Tax Act, 2003 and rule 131 of the Karnataka Value Added Tax Rules, 2005 - Output tax, input tax and net tax - Deduction of input tax - Period July, 2005 to March, 2007 - Assessee was engaged in business of manufacture of refined sunflower oil from sunflower oil cake by employing solvent extraction process - In extraction process, assessee also obtained de-oiled cake - It claimed deduction of input tax paid on purchases of sunflower oil cake - Assessing Authority viewed that assessee manufactured sunflower oil and also obtained de-oiled cake, which was exempted from tax, therefore, it was eligible only for partial input tax rebate as per section 17 read with rule 131(3) - Whether since assessee had purchased sunflower oil cake for purpose of extracting oil and it had not put up a separate industry for purpose of manufacture of de-oiled cake, it was entitled to deduction of full input tax paid - Held, yes [Paras 11 and 12] [In favour of assessee]
Circulars and Notifications : Notification No. FD 197 CSL 2005(1), dated 30-4-2005