2005 (8) TMI 620 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to set-off of sales tax under the Jharkhand Industrial Policy, 2001.
2. Interpretation of relevant clauses of the Jharkhand Industrial Policy, 2001 and related notifications.
3. Impact of prior availed benefits under the Bihar Industrial Policy, 1995 on the entitlement to set-off.

Issue-wise Detailed Analysis:

1. Entitlement to Set-Off of Sales Tax:
The primary issue is whether the petitioner, Tata Cummins Ltd., is entitled to avail the benefit of set-off of sales tax effective from January 1, 2004, under the Jharkhand Industrial Policy, 2001. The petitioner contends that under clause 28.1 of the Jharkhand Industrial Policy, 2001, they are entitled to set-off sales tax paid on raw materials against sales tax payable on finished products.

2. Interpretation of Relevant Clauses:
The court examined the relevant clauses of the Jharkhand Industrial Policy, 2001, particularly clause 28.1, which states: "New Industrial Units as well as existing units which are not availing any facility of tax deferment or tax-free purchases or tax-free sales under any notification announced earlier, shall be allowed to opt for set-off." The policy defines "Existing Industrial Unit" as those which started production before the effective date (November 15, 2000) and "New Industrial Unit" as those commencing production between November 15, 2000, and March 31, 2005.

The court emphasized that the language of the statute is clear and unambiguous, meaning that only units not availing any tax deferment or tax-free benefits as of the effective date are eligible for set-off. This interpretation aligns with the principle that when statutory language is plain and unambiguous, courts must give effect to that meaning.

3. Impact of Prior Availed Benefits:
The petitioner had previously availed of tax deferment benefits under the Bihar Industrial Policy, 1995, which was confirmed by a Division Bench of the court in a prior judgment. The court noted that the petitioner cannot claim the set-off benefit under the Jharkhand Industrial Policy, 2001, while simultaneously availing benefits under the earlier Bihar policy. The court referenced the Supreme Court's decision in Suprabhat Steel Ltd., which held that notifications must align with the industrial policy and cannot deviate from it.

Conclusion:
The court concluded that the petitioner, having availed of tax deferment benefits under the Bihar Industrial Policy, 1995, is not entitled to the set-off benefit under the Jharkhand Industrial Policy, 2001. The writ petition was dismissed, but the court allowed the petitioner to renew its prayer for set-off if the Supreme Court's pending decision in Civil Appeal No. 10272 of 2003 overturns the prior judgment in favor of the petitioner.