1999 (11) TMI 851 - AT - VAT and Sales Tax

Summary

Issues:
Challenge to rejection of extension of validity of eligibility certificate for tax remission under section 10G of the Bengal Finance (Sales Tax) Act, 1941.

Analysis:
The case involved an application under section 8 of the West Bengal Taxation Tribunal Act, 1987, where the applicants, a company and one of its directors, contested the rejection of their request for extending the validity of the eligibility certificate (E.C.) for tax remission. The company, engaged in manufacturing stoneware products, argued that it was entitled to the benefit of an amended provision that extended the period for tax remission to 9 years with 100% remission of fixed capital assets. The company contended that since the amendment came into force during the validity of its E.C., it should be allowed to benefit from the revised provisions. However, the revenue authorities rejected the company's plea based on the substantive right fixed at the time of initial eligibility.

During the hearing, the company's advocate argued that if a statutory provision undergoes an amendment extending the period for a benefit while a dealer is still enjoying the initial benefit, the dealer should be allowed to avail of the extended period. The advocate cited a decision to support this argument, emphasizing that the principle applies to procedural laws. However, the tribunal clarified that the principle applies to procedural laws, and in this case, the dispute was related to a substantive right rather than procedural law. The tribunal highlighted that the company's substantive right to tax remission was determined based on the law applicable when it became eligible, and subsequent amendments would not affect this right unless the amended provision explicitly states otherwise.

Furthermore, the tribunal noted that the amendment to rule 48G specified that it would apply to industrial units established after a certain date, excluding units set up before that date. Since the company's unit was established and incurred tax liability before the specified date, it did not fall under the amended provision's scope. Consequently, the tribunal dismissed the application, stating that the amended rule could not be applied to the company's unit.

In conclusion, the tribunal found no grounds to uphold the application for extending the validity of the eligibility certificate, and the application was dismissed without costs. The technical member of the tribunal agreed with the decision to dismiss the application.