2026-VIL-868-GUJ
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VAT High Court Cases

Gujarat VAT Act, 2003 - Exemption of seeds used for sowing purposes under Government Notification dated 29.04.2006 - Levying of purchase tax under Section 9(1) of the VAT Act on certified seeds prepared under research and development program – Petitioner-Revenue sought to levy purchase tax on seeds procured, processed and used for sowing purposes by the Respondent-assessee through a research and development program wherein the Respondent provided basic seeds to farmers for cultivation, supervised the process through Agriculture Supervisors, conducted quality tests including germination test, grow out test and genetic test, and repurchased the certified seeds - Whether certified seeds so prepared fall within the exemption notification dated 29.04.2006 which exempts seeds of all types other than imported seeds used for sowing purpose from tax - HELD - The Government Notification dated 29.04.2006 clearly exempts seeds of all types other than imported seeds used for sowing purpose from tax - The Respondent is not importing any seeds and the seeds in question are used only for sowing purposes - The certified seeds are prepared under the research and development program of the Respondent wherein the Respondent remains present in the farms and undertakes proper research such as germination test, grow out test and genetic test to produce certified seeds which are packed and sold with compensation paid on kilo rate basis - Such seeds which are prepared through research and development program cannot be said to be seeds of business and purchase warranting levy of purchase tax under Section 9(1) of the Act - The subsequent determination order in case of M/s. King and Queen Seeds Corporation wherein the determining authority held that seeds prepared under research and development program cannot be said to be of business and purchase is applicable to the case of the Respondent - The earlier determination order in case of M/s. Green India Farm Biotech is distinguishable as no one remained present before the determining authority in that case and hence the decision taken was that purchase tax was leviable - The Revision Application filed by the Respondent challenging the revisional order which sought to levy purchase tax is allowed and the revisional order is set aside - The writ petition challenging the Tribunal's order is dismissed
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