1994 (11) TMI 386 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of Rajasthan Sales Tax Incentive Scheme for Industries, 1987 regarding the entitlement of a new industrial unit to exemption benefits based on the date of application or a later date.

In this case, the main issue before the Rajasthan High Court was to determine whether a new industrial unit, as defined in the Rajasthan Sales Tax Incentive Scheme for Industries, 1987, should be entitled to exemption benefits from the date of application to the sales tax authorities or from a later date. The petitioner argued that they fulfilled all conditions for exemption and applied for an eligibility certificate on July 8, 1988. Despite delays in the issuance of the certificate, the petitioner believed they were exempt from sales tax from the application date, citing previous court judgments supporting this view.

The petitioner's counsel relied on the judgment in Om Shiv Shakti Cement Pvt. Ltd. v. State of Rajasthan, where it was held that the eligibility certificate should be operative from the date of application, not issuance. Additionally, reference was made to Assessing Authority v. Patiala Biscuits Manufacturers Pvt. Ltd., where the Supreme Court emphasized the importance of the application date for eligibility certificates. The counsel also mentioned a Supreme Court judgment in Devshree Cement Ltd. v. State of Rajasthan, which struck down a clause similar to the one in question.

After considering the legal arguments and precedents cited, the Court, presided over by Justice Arun Madan, concluded that the petitioner was entitled to the benefits of the Incentive Scheme from the date of their application on July 8, 1988. The Court directed that no recovery should be made based on previous assessment orders or demand notices. The writ petition was allowed, and no costs were awarded to either party.