Plant and Machinery

Petitioner assailed show cause notice, whereby claim of Rs.1.020 million was refused to be allowed as input adjustment under notification S.R.O. No.578(I)/98, dated 12-6-1998

Validity

Generators in question were imported, installed and made to use in manufacturing process by petitioner and the same were considered as 'plant and machinery' and had come within the definition of term 'stock-in-trade' and fell outside the mischief of excluding provision provided under notification S.R.O. No.578(I)/98, dated 12-6-1998

Show-cause notice, whereby claim of Rs.1.020 million was refused to be allowed as input adjustment under notification S.R.O. No.578(I)/98, dated 12-6-1998, was not legally correct

Generator in question was in fact a 'stock-in-trade' and could not be excluded from the goods which could not avail input adjustment as provided under Show cause notice, whereby claim of Rs.1.020 million was refused to be allowed as input adjustment under notification S.R.O. No.578(I)/98, dated 12-6-1998

Authorities failed to consider such crucial legal issue

Input tax adjustment on generator which was used for manufacturing purpose could be adjusted in output tax of petitioner, as it did not fall within mischief of show cause notice, whereby claim of Rs.1.020 million was refused to be allowed as input adjustment under notification S.R.O. No.578(I)98, dated 12-6-1998

High Court directed the authorities to revisit claim of input adjustment of Rs.1.020 million made by petitioner, in view of 1st proviso to S. 66 read with 74 of Sales Tax Act, 1990, and guidelines provided under STGO No.2 and notification S.R.O. 978(I)/99, dated 30-8-1999

Reference was disposed of accordingly.

" Plant and machinery" are not two different entities because a plant cannot be functional without machinery and machinery being integral part of the plant, both "plant and machinery" can be considered interchangeable and synonymous keeping in view a little difference between the two and their dependence upon each 'other because they are not separable and a plant cannot be made functional without a machine

Principles.