1989 (10) TMI 217 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to refusal of exemption certificate or deferment certificate under Sales Tax Incentive Schemes for Industries, 1987 and 1989 in Rajasthan.

Analysis:
The petitioner challenged the non-petitioners' action of refusing to grant an exemption certificate or deferment certificate under the Sales Tax Incentive Schemes for Industries, 1987 and 1989 in Rajasthan. The Government of Rajasthan issued notifications for these schemes in exercise of powers conferred by the Rajasthan Sales Tax Act, 1954. The petitioner applied for deferment of sales tax and eligibility certificate under the schemes but faced rejections based on reasons like total investment not exceeding Rs. 10 lacs and application submitted beyond the prescribed period of 150 days. The petitioner filed a writ petition before the High Court, arguing that the schemes should be liberally construed in favor of the assessees to encourage industries in Rajasthan. The petitioner relied on the case law of Fertilizer Corporation of India Ltd. v. State of Bihar [1988] 68 STC 158 (SC); [1988] Supp SCC 73 to support the argument.

The High Court noted the intention of the State Government to encourage industries in Rajasthan through the incentive schemes. It highlighted that a new scheme in 1989 allowed applications to be entertained even after the prescribed period of limitation. Citing the Supreme Court's observations in Fertilizer Corporation of India Ltd.'s case, the High Court decided to allow the writ petition. The court directed the non-petitioners to consider the petitioner's application for the eligibility certificate or deferment certificate under the sales tax incentive schemes on merits. The parties were left to bear their own costs.

In conclusion, the High Court partially allowed the writ petition, emphasizing the need to interpret the incentive schemes liberally to promote industrial growth in Rajasthan. The judgment underscored the importance of considering applications on their merits and in line with the objective of encouraging industries in the state.