2005 (1) TMI 639 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Applicability of clause (g) to Notification No. FD 239 CSL 90(I) dated June 19, 1991 for understanding Notification No. FD 11 CET 1993(III) dated March 31, 1993.
2. Lawfulness of the assessment order for the purchase of raw materials for levy of entry tax.
3. Entitlement of the petitioner to benefit of entry tax exemption under Notification No. FD 11 CET 93(III) dated March 31, 1993.
4. Legality of the Tribunal's order.

Issue-wise Detailed Analysis:

I. Applicability of Clause (g) to Notification No. FD 239 CSL 90(I) dated June 19, 1991:
The primary question was whether the insertion of clause (g) to the Notification No. FD 239 CSL 90(I) dated June 19, 1991, applies to Notification No. FD 11 CET 1993(III) dated March 31, 1993. The court assessed whether this was a case of legislation by incorporation or by reference. It was concluded that the notification dated March 31, 1993, adopted by reference the conditions and procedures from the notification dated June 19, 1991. Therefore, any subsequent amendments to the earlier notification, including the insertion of clause (g), would apply to the later notification. The court held that the Tribunal was justified in rejecting the petitioner-company's claim for exemption under the March 31, 1993 notification because it had not opted for availing concessions before September 30, 1993.

II. Lawfulness of the Assessment Order:
The petitioner challenged the reassessment orders passed by the assessing authority, which levied entry tax on raw materials and components on the grounds that the petitioner did not fulfill the investment condition stipulated in the notification dated June 25, 1997. The court upheld the reassessment orders, noting that the petitioner was ineligible for the tax exemption due to non-compliance with the investment condition.

III. Entitlement to Entry Tax Exemption:
The petitioner contended that they were entitled to the benefit of the entry tax exemption under Notification No. FD 11 CET 93(III) dated March 31, 1993. The court, however, concluded that the petitioner was not entitled to this benefit because the conditions for exemption were not met. Specifically, the petitioner did not make the required investment of Rs. 111 crores, which was a prerequisite for claiming the exemption.

IV. Legality of the Tribunal's Order:
The petitioner argued that the Tribunal's order was opposed to law. The court examined the Tribunal's decision and found it to be in accordance with the legal provisions and the facts of the case. The Tribunal had correctly applied the law by considering the amendments to the earlier notification and denying the exemption to the petitioner.

Conclusion:
The court dismissed the petitions, affirming the Tribunal's decision and the reassessment orders. The petitioner was found ineligible for the entry tax exemption due to non-compliance with the investment condition and the applicability of clause (g) to the notification. The court also rejected the argument that a beneficial view should be adopted for the assessee, as only one view was possible in this case. The petitions were dismissed, and each party was directed to bear its own costs.