2001 (11) TMI 1004 - HC - VAT and Sales Tax

Issues Involved:
1. Misrepresentation of facts in obtaining an amendment to the eligibility certificate.
2. Jurisdiction of the Tribunal in granting remission.
3. Finality of the order reducing the exemption period.
4. Legality of remission granted by the assessing authority.
5. Dealer's compliance with tax realization and deposition.

Issue-wise Detailed Analysis:

1. Misrepresentation of Facts:
The department argued that the dealer obtained an amendment to the eligibility certificate, enhancing the exemption period from five to six years, by misrepresenting facts and using a false certificate issued by the Tahsildar. The Tribunal found no evidence of fraud or "Jalsaji" (fraud) by the dealer. The dealer had acted bona fidely based on the certificate from Tahsildar-Dadari, believing their unit was within the local limits of Tahsil-Dadari. The Tribunal's finding was that there was no fraud, and this was supported by the fact that other units in the same industrial area had also received similar exemptions.

2. Jurisdiction of the Tribunal in Granting Remission:
The department contended that the Tribunal had no jurisdiction to decide on the remission of tax and that this should be the purview of the assessing authority. However, the Tribunal directed the assessing authority to pass an appropriate order on remission. The Tribunal did not directly grant remission but held that the dealer was entitled to it, thus directing the assessing authority to make the final decision.

3. Finality of the Order Reducing the Exemption Period:
The order dated November 10, 1997, which reduced the exemption period from six to five years, was not challenged and hence became final. The dealer was not entitled to an exemption for more than five years. However, the remission granted by the assessing authority was based on a Government Order, and the department did not argue that this remission was in violation of the said order.

4. Legality of Remission Granted by the Assessing Authority:
The assessing authority had granted remission for Rs. 5,25,91,650 but did not grant remission for Rs. 99,25,725. The Tribunal found that the assessing authority had implicitly refused to grant remission for the remaining amount. The Tribunal's direction to the assessing authority to pass a fresh order was deemed appropriate, as the question of remission had already been considered by the assessing authority.

5. Dealer's Compliance with Tax Realization and Deposition:
The department argued that the dealer should have realized and deposited tax after the survey conducted on March 29, 1995. The dealer contended that the eligibility certificate was still effective at that time, and they believed they were exempt from tax collection. The Tribunal agreed with the dealer, noting that the eligibility certificate was operative until February 6, 1996, and the dealer could not have realized tax due to the penal provisions under section 15-A of the Act. The dealer's statement that tax would be realized in accordance with the law was found to be consistent with the legal requirements at that time.

Conclusion:
The High Court dismissed the revision petition filed by the department, upholding the Tribunal's decision. The Tribunal's findings that there was no fraud or misrepresentation by the dealer, and that the dealer was entitled to remission, were supported by the evidence on record. The Tribunal's direction to the assessing authority to pass a fresh order on remission was found to be legally sound. The petition was dismissed, and the Tribunal's order was upheld.

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