2006 (11) TMI 567 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to sales tax exemption under the notification read with section 3B of the State Act and section 8(2A) of the Central Act.
2. Circumstances under which the power of revision under section 31(1) of the State Act can be exercised.
3. Validity of the judgment of the learned single Judge.

Issue-Wise Detailed Analysis:

1. Entitlement to Sales Tax Exemption:
The petitioner, M/s. Mahavir Coke Industries, claimed entitlement to sales tax exemption for goods produced under the Assam Finance (Sales Tax) Act, 1956, and the Central Sales Tax Act, 1956, based on section 3B of the State Act and section 8(2A) of the Central Act. The State Government's notification dated October 12, 1982, provided exemptions from sales tax for newly established industries for five years. The petitioner submitted its return for the assessment period 1986-88, which was assessed as nil by the A.O. However, the Assistant Commissioner of Taxes later revised this assessment, cancelling the exemption.

2. Power of Revision under Section 31(1) of the State Act:
The Assistant Commissioner of Taxes exercised suo motu revision under section 31(1) of the State Act, arguing that the exemption provided by the A.O. was erroneous as the notification was conditional, not general. The petitioner contended that the Assistant Commissioner wrongly exercised his jurisdiction as there was no error in the A.O.'s decision, and the assessment order was not prejudicial to the Revenue. The court noted that the conditions in the notification were statutory and did not alter the general nature of the exemption.

3. Validity of the Judgment of the Learned Single Judge:
The learned single Judge quashed the orders of the Assistant Commissioner and the A.O.'s notice, supporting the petitioner's claim for exemption. The appellants argued that the judgment failed to consider relevant case law and the law prevailing at the time of assessment. The court, however, agreed with the petitioner, stating that the law at the time of assessment was as per Pine Chemicals Ltd. v. Assessing Authority and Muli Bash Hasta Silpa Samabaya Society Ltd. The court held that the Assistant Commissioner wrongly exercised his power under section 31(1) of the State Act, as the law at the time supported the petitioner's exemption claim.

Conclusion:
The court affirmed the judgment of the learned single Judge, dismissing the writ appeal. The court concluded that the Assistant Commissioner wrongly exercised his revisionary power, and the petitioner was rightfully entitled to the sales tax exemption under the prevailing law at the time of assessment. The conditions in the notification did not negate the general nature of the exemption provided by section 3B of the State Act.