2001 (6) TMI 807 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Adjustment of sales tax paid during the interim period against future dues.
2. Prospective or retrospective application of G.O. Ms. No. 18, dated January 30, 1997.
3. Basis for claiming deferment of sales tax.
4. Validity of the circular dated May 12, 1997 and the notice dated June 20, 1997.

Issue-wise Detailed Analysis:

1. Adjustment of Sales Tax Paid During the Interim Period Against Future Dues:
The petitioner-company argued that the sales tax paid during the period from February 15, 1996, to April 30, 1996, should be adjusted against the tax payable for April 1997 and subsequent periods. The court found that the tax paid during the interim period could only be adjusted against future dues payable after the expiry of the eligibility period as per G.O. Ms. No. 18. The court held that the provisions of G.O. Ms. No. 18 were clear, plain, and unambiguous, and thus, the petitioner's claim was untenable.

2. Prospective or Retrospective Application of G.O. Ms. No. 18, Dated January 30, 1997:
The petitioner contended that G.O. Ms. No. 18 should be applied prospectively and not retrospectively. The court, however, noted that G.O. Ms. No. 18 was issued in response to representations from industrial units regarding the delay in issuing the final eligibility certificate and the subsequent payment of sales tax during the interim period. The court concluded that the G.O. applied to the petitioner's case and that the petitioner had no vested right to claim adjustment of the tax paid before the expiry of the eligibility period.

3. Basis for Claiming Deferment of Sales Tax:
The petitioner argued that the deferment could be claimed based on monthly average production rather than annual production. The court rejected this contention, stating that the final eligibility certificate and G.O. Ms. No. 386 mandated deferment based on annual production. Accepting the petitioner's argument would alter the terms and conditions of the eligibility certificate, which was not permissible.

4. Validity of the Circular Dated May 12, 1997, and the Notice Dated June 20, 1997:
The court upheld the validity of the circular and the notice, stating that they were in conformity with the final eligibility certificate and G.O. Ms. No. 386. The circular clarified that deferment was eligible only when production exceeded the base production with reference to local sales. The court found no merit in the petitioner's contention that the base turnover should be calculated based on monthly production.

Conclusion:
The court dismissed the writ petition, affirming the validity of G.O. Ms. No. 18, the circular dated May 12, 1997, and the notice dated June 20, 1997. The petitioner was not entitled to adjust the sales tax paid during the interim period against future dues before the expiry of the eligibility period. The deferment of sales tax had to be claimed based on annual production, and the base turnover calculation by the respondents was upheld.