In Brief
M.K. Agro Tech, a sunflower oil manufacturer, purchased sunflower cake as raw material (paying input VAT) and extracted oil for sale (paying output VAT). The extraction process generated de-oiled cake as a by-product, which the company also sold as an exempt good (no output VAT). The State sought to restrict the company's input tax credit to a partial rebate under Section 17 of the KVAT Act; the company sought full deduction. The High Court favoured the company, treating the by-product as outside Section 17's scope. The Supreme Court reversed, holding that Section 17 applies whenever a dealer sells both taxable and exempt goods, regardless of whether the exempt good is a by-product. The relevant event is 'sale', not 'manufacture'; literal construction applies. Appeals allowed.", <parameter name="cited_cases">[ { "raw_citation": "Commissioner of Central Excise, Jaipur v. Mahavir Aluminum Ltd. (2007) 5 SCC 260", "case_name": "Commissioner of Central Excise, Jaipur v. Mahavir Aluminum Ltd.", "cited_year": "2007", "paragraph": "23", "treatment": "referred", "treatment_by": "this_court" }, { "raw_citation": "Ravi Prakash Refineries Private Ltd. v. State of Karnataka (2016) 12 SCC 193", "case_name": "Ravi Prakash Refineries Private Ltd. v. State of Karnataka", "cited_year": "2016", "paragraph": "24", "treatment": "referred", "treatment_by": "this_court" }, { "raw_citation": "State of Gujarat v. Raipur Manufacturing Co. Ltd. (1967) 19 STC 1; AIR 1967 SC 1066", "case_name": "State of Gujarat v. Raipur Manufacturing Co. Ltd.", "cited_year": "1967", "paragraph": "25", "treatment": "referred", "treatment_by": "this_court" }, { "raw_citation": "Commissioner of Income Tax-III v. Calcutta Knitwears, Ludhiana (2014) 6 SCC 444", "case_name": "Commissioner of Income Tax-III v. Calcutta Knitwears, Ludhiana", "cited_year": "2014", "paragraph": "30", "treatment": "referred", "treatment_by": "this_court" }, { "raw_citation": "State of Madhya Pradesh v. Rakesh Kohli & Anr (2012) 6 SCC 312", "case_name": "State of Madhya Pradesh v. Rakesh Kohli & Anr", "cited_year": "2012", "paragraph": "30", "treatment": "referred", "treatment_by": "this_court" }, { "raw_citation": "V.V.S. Sugars v. Government of Andhra Pradesh & Ors. (1999) 4 SCC 192", "case_name": "V.V.S. Sugars v. Government of Andhra Pradesh & Ors.", "cited_year": "1999", "paragraph": "30", "treatment": "referred", "treatment_by": "this_court" }, { "raw_citation": "Godrej & Boyce Mfg. Co. Pvt. Ltd. & Ors. v. Commissioner of Sales Tax and Others (1992) 3 SCC 624", "case_name": "Godrej & Boyce Mfg. Co. Pvt. Ltd. & Ors. v. Commissioner of Sales Tax and Others", "cited_year": "1992", "paragraph": "31", "treatment": "followed", "treatment_by": "this_court" }, { "raw_citation": "Hotel Balaji & Ors. v. State of Andhra Pradesh & Ors. (1993) Supp 4 SCC 536", "case_name": "Hotel Balaji & Ors. v. State of Andhra Pradesh & Ors.", "cited_year": "1993", "paragraph": "31", "treatment": "referred", "treatment_by": "this_court" }, { "raw_citation": "Jayam and Company v. Assistant Commissioner and Another (2016) 15 SCC 125", "case_name": "Jayam and Company v. Assistant Commissioner and Another", "cited_year": "2016", "paragraph": "31", "treatment": "referred", "treatment_by": "this_court" } ], <parameter name="statutes_cited">["Central Sales Tax Act, 1956, s. 2, s. 5, s. 10, s. 11", "Karnataka Value Added Tax Act, 2003, s. 2(6), s. 2(13), s. 2(15), s. 3, s. 5, s. 10, s. 11(a)(1), s. 17", "Karnataka Value Added Tax Rules, 2005, r. 3, r. 131"], <parameter name="articles_cited">[]
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