Orissa High Court rules VAT exemption for Wheat Bran sale without conditionality
The Orissa High Court has ruled that the sale of wheat bran, commonly known as 'chokad,' is exempt from value-added tax
Orissa High Court rules VAT exemption for Wheat Bran sale without conditionality
The Orissa High Court has ruled that the sale of wheat bran, commonly known as 'chokad,' is exempt from value-added tax (VAT), regardless of the purpose for which it is purchased by the buyer. The ruling was issued in a dealer's case where a 4 per cent tax was imposed on the supply of chokad to Nalco by treating it as an industrial input under the Odisha Value Added Tax Act, 2004.
The bench, consisting of Chief Justice S Muralidhar and Justice MS Raman, stated that the Act should have explicitly mentioned any conditions that needed to be fulfilled for granting exemption from VAT on the sale of chokad.
The bench ruled that since there are no specific conditions mentioned in the statute, it can be concluded that the sales of 'chokad', regardless of the purpose for which it is purchased by the buyer, are exempt from VAT.
The bench noted that for the sale of chokad to Nalco to be taxed at 4 per cent, there needed to be a notification issued by the state government identifying it as an 'industrial input'. Since there was no such notification, the court concluded that the sales tax officer, joint commissioner of sales tax, and the Sales Tax Tribunal were mistaken in treating the sale of chokad to Nalco as an 'industrial input' subject to VAT at 4 per cent.