1999 (8) TMI 925 - HC - VAT and Sales Tax

Summary

Issues:
- Eligibility for exemption from payment of sales tax under State and Central Sales Tax Act
- Retrospective effect of notifications dated October 16, 1986, and October 11, 1990

Eligibility for Exemption from Sales Tax:
The petitioner, a partnership firm engaged in the manufacture and sale of stone metal, sought an eligibility certificate for exemption from sales tax under the State and Central Sales Tax Act for seven years from the commencement of commercial production. The petitioner established a new industrial unit in a backward district, Jhabua, and commenced production on April 30, 1988. The dispute arose when the State Government, through a notification dated October 11, 1990, excluded stone crushing industries from the list of exempted industries, leading to the denial of the eligibility certificate to the petitioner. The petitioner contended that the exemption granted under the earlier notification dated October 16, 1986 should apply as the unit was set up during the enforcement of the unamended notification. The court analyzed the legal position and held that the notification of 1990 did not have a retrospective effect. Therefore, the petitioner was entitled to the benefit of exemption under the notification dated October 16, 1986, provided all conditions were met.

Retrospective Effect of Notifications:
The court examined the notifications dated October 16, 1986, and October 11, 1990, to determine their retrospective application. It was established that the notification of 1990 did not specify any retrospective effect and was published on October 11, 1990, indicating prospective operation from that date. The court emphasized the general rule that laws and notifications apply from their publication unless explicitly stated otherwise. As the stone crushing industry was excluded from the exemption list only after the 1990 amendment, units established before that date were eligible for exemption under the earlier notification. The judgment clarified that units set up post-October 11, 1990, would not be entitled to the same benefits. Consequently, the court directed the respondents to grant the eligibility certificate to the petitioner in line with the 1986 notification within three months, provided all conditions were satisfied. The previous orders denying the certificate were set aside, and a fresh assessment was ordered by the Sales Tax Officer.

This detailed analysis of the judgment highlights the key issues of eligibility for sales tax exemption and the retrospective effect of notifications, providing a comprehensive understanding of the court's decision and legal reasoning.