2001 (1) TMI 950 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to orders of District Level Committee and State Level Committee regarding exemption from sales tax for a small-scale industrial unit.

Analysis:
The petitioner sought to quash orders dated August 3, 1991, and June 4, 1992, rejecting their application for exemption from sales tax for a new industrial unit. The petitioner claimed to have commenced production in January 1988 and applied for exemption under relevant notifications. An amendment to the notification in March 1989 allowed dealers to opt for exemption under different notifications. The petitioner applied for exemption under the 1981 notification within the specified period but was rejected by the District Level Committee and State Level Committee.

The petitioner argued that they were entitled to claim exemption under the 1981 notification based on their application within the stipulated period. The State supported the rejection of the application, stating it was legally sound. The court observed that the interpretation of the amendment to the notification was crucial for the case's outcome.

The court analyzed the amendment clause, emphasizing that dealers had the right to choose between notifications for exemption and that once an option was exercised, it was final. The court found no ambiguity in the language or interpretation of the clause. It ruled that the petitioner, by applying within the specified period, was entitled to the benefits under the 1981 notification.

The court highlighted that the amended clause aimed to benefit dealers by providing an additional opportunity to opt for a different form of tax payment. It emphasized interpreting the clause in favor of the dealer to achieve the intended purpose of the amendment. The court concluded that both lower authorities erred in rejecting the petitioner's application and directed a fresh consideration based on the observations made.

In the final decision, the court allowed the petition, quashed the impugned orders, and instructed a reconsideration of the application on merit within three months. The court waived costs and ordered the refund of any security deposit made by the petitioner.