2005 (7) TMI 635 - HC - VAT and Sales Tax

Summary

Issues involved:
Challenge to sales tax orders and demand for assessment year 1990-91 regarding set-off on purchases made by a manufacturer holding a recognition certificate under section 16-C of the M. P. General Sales Tax Act, 1958.

Analysis:
The petitioner filed a writ challenging orders by the Additional Commissioner of Sales Tax and the consequential demand for sales tax payment for the assessment year 1990-91. The central issue was whether the petitioner, engaged in manufacturing and sale of light structural, with a recognition certificate under section 16-C, was entitled to claim set-off on certain purchases made during the relevant period. The taxing authorities and appellate authority denied the set-off, leading to a demand of Rs. 74,704. The petitioner relied on a previous court decision in Associated Cement Co. Ltd. v. State of M. P., arguing in favor of quashing the impugned orders and demand. After hearing both parties, the court agreed with the petitioner's submission, leading to the allowance of the petition and quashing of the demands, remanding the case for fresh examination based on the law established in the Associated Cement Co. Ltd. case.

Regarding the legal question of set-off under section 8(2) of the Act in connection with section 16-C and section 6(2) of the M. P. General Sales Tax Act, the court referred to the decision of a division bench. The court emphasized that if an assessee had already availed the concession under section 6(2), the benefit of section 8(1) for set-off would not be available. However, if the assessee had not availed the concession despite holding a recognition certificate under section 16-C, they could claim the benefit under section 8(1) subject to verification. The court directed the authorities to re-examine the matter in light of the observations made, similar to the decision in the Associated Cement Co. Ltd. case, and dispose of the petition accordingly.

In conclusion, the court upheld the petitioner's claim, quashed the impugned orders, and remanded the case to the assessing officer for re-examination based on the legal principles established in the Associated Cement Co. Ltd. case. The assessing officer was directed to pass a fresh assessment order within six months, ensuring a fair opportunity of hearing to the petitioner. The court's decision was in line with the legal precedents cited and aimed at ensuring proper application of the law in the assessment process.