2005 (8) TMI 646 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to revisionary order granting set-off on taxpaid goods purchased during a specific period when holding a recognition certificate under section 16-C of the Act.

Analysis:
The petitioner challenged a revisionary order passed by the Commissioner, Commercial Tax, which arose from an assessment order passed by the Assistant Commissioner, Commercial Tax, regarding the entitlement to claim set-off on taxpaid goods purchased during a specific period while holding a recognition certificate under section 16-C of the Madhya Pradesh General Sales Tax Act. The petitioner, engaged in the business of manufacturing and selling aluminium utensils/circles, had been granted a recognition certificate as per section 16-C of the Act effective from December 11, 1990. The petitioner claimed set-off on tax-paid goods purchased during April 1, 1991, to March 31, 1992, amounting to Rs. 2,79,493. Initially granted, the set-off benefit was later withdrawn in re-assessment proceedings as the recognition certificate disentitled the petitioner from enjoying the set-off benefit during the mentioned period.

The petitioner contended that since the recognition certificate was granted after the period in question, they were eligible to claim set-off during that period. Conversely, the State argued that since the certificate was in force during the relevant period, the petitioner was not entitled to claim any set-off benefit. The court observed that the petitioner cannot enjoy benefits from the recognition certificate issued with effect from December 11, 1990, and simultaneously claim the set-off benefit not available to certificate holders during the specified period. The court emphasized that the petitioner did not assert the right to claim set-off independent of the certificate. Therefore, the court held that the petitioner was disentitled to the set-off benefit during the period when the recognition certificate was in force.

Consequently, the court dismissed the writ, emphasizing that the period mentioned in the recognition certificate was crucial, and if set-off was claimed during the certificate's validity period, it had to be withdrawn. The court found no merit in the petitioner's argument and ruled in favor of upholding the withdrawal of the set-off benefit. The judgment highlighted the importance of the period specified in the recognition certificate and the petitioner's obligation to forgo benefits not available to certificate holders during the certificate's validity period.