1997 (12) TMI 631 - AT - VAT and Sales Tax

Summary

Issues:
(i) Competency of respondent No. 3 to dispose of an application for assistance under the Scheme and the correctness of not considering "phenyle" a drug.
(ii) Entitlement of relief prayed for in the application.
(iii) Jurisdiction of the Tribunal to entertain the application.

Analysis:

Competency of Respondent No. 3:
The applicant sought financial assistance under the Industrial Promotion Scheme for manufacturing "phenyle," claiming it to be a drug eligible for assistance. However, respondent No. 3 rejected the claim, stating that he lacked the authority to grant or deny assistance, and only the State Government could make such decisions. The contention was that the Scheme did not fall under the purview of any specific tax laws and was processed by the State Government. The key issue was whether respondent No. 3 erred in his decision regarding the eligibility of "phenyle" as a drug under the Scheme.

Entitlement of Relief:
The applicant filed for a refund of 90% of the sales tax paid, citing the manufacturing of a drug as grounds for assistance under the Scheme. The dispute arose when respondent No. 3 rejected the application, leading to the question of whether the relief prayed for in the application could be considered valid. The central concern was whether the applicant was entitled to the industrial promotion assistance based on the nature of the manufactured product and the compliance with the Scheme's requirements.

Jurisdiction of the Tribunal:
The Tribunal deliberated on its jurisdiction to entertain the application under the Scheme. It was established that the Scheme was not framed under any specific tax laws but was an administrative measure by the State Government to provide financial assistance to certain industries facing financial challenges. The Tribunal concluded that since the Scheme did not originate from any taxing statute and the financial assistance was disbursed by the State Government, the Tribunal lacked jurisdiction to adjudicate on matters related to the Scheme. Therefore, the Tribunal dismissed the application based on the absence of jurisdiction.

Conclusion:
The Tribunal ruled that it did not have the authority to entertain the application under the Scheme due to its administrative nature and the disbursement of financial assistance by the State Government. As a result, the application was dismissed, and no costs were awarded. The decision was unanimous among the members of the Tribunal, leading to the rejection of the applicant's plea for financial assistance under the Industrial Promotion Scheme.