2000 (12) TMI 877 - HC - VAT and Sales Tax

Summary

Issues:
Claim for extension in the period of exemption from payment of sales tax for 278 days after December 15, 1989.

Analysis:
The petitioner, a small-scale industry engaged in wire manufacturing, sought an extension in the exemption period from sales tax for 278 days post-December 15, 1989. The petitioner had been granted a three-year exemption period from December 15, 1986, to December 14, 1989. The application for extension was based on the unit's closure due to various reasons beyond their control, such as curfew, power cuts, non-supply of raw materials, and lack of working capital. The State rejected the application, stating that the causes cited were not beyond the petitioner's control, hence not eligible for extension.

The State contended that the reasons for closure were within the petitioner's control, and the rejection of the application was proper and reasonable. The petitioner argued that the closure due to curfew was beyond their control and should entitle them to an extension. The court analyzed an amendment to the exemption notification, which allowed for an extension if the closure was due to reasons beyond the dealer's control, such as fire, accidents, strikes, floods, or earthquakes.

The court held that the imposition of curfew was beyond the petitioner's control, entitling them to an extension for the period of curfew. However, other reasons like non-availability of raw materials, working capital, and power cuts were not considered beyond the petitioner's control. Therefore, the court partially allowed the petition, granting an extension for only the 11 days of curfew from October 14, 1989, to October 24, 1989. The respondents were directed to extend the benefit of sales tax exemption for those 11 days within four months from the date of the order. No costs were awarded, and any security amount deposited by the petitioner was to be refunded.