2010 (4) TMI 990 - HC - VAT and Sales Tax

Amendment to the eligibility certificate by incorporating the sales tax liability as part of the deferral seeked - Held that - Going by G.O.Ms. No. 104, Industries Department dated November 12, 2001, read along with G.O.Ms. No. 376 dated October 27, 1992, no hesitation in granting the prayer to the petitioner, thereby directing the third respondent to amend the eligibility certificate incorporating the benefit of G.O.Ms. No. 376 dated October 27, 1992 and granting the deferral in respect of Central sales tax liability also within a period of six weeks from the date of receipt of a copy of this order. Having regard to the orders passed above directing the third respondent to amend the eligibility certificate, the tax recovered as regards the liability in the Central sales tax relevant to the abovesaid period for the assessment years 2002-03 and 2004-05 shall be taken note of while rescheduling the repayment.

Issues Involved:
1. Eligibility for deferral of Central Sales Tax (CST) liability for an expanded unit.
2. Amendment of eligibility certificate to include CST liability.
3. Restoration of CST remitted during the deferral period.

Detailed Analysis:

1. Eligibility for Deferral of Central Sales Tax (CST) Liability for an Expanded Unit:

The petitioner established a new unit for manufacturing catalytic converters and parts, receiving a deferral of sales tax for nine years starting from September 1, 1998. Subsequently, the petitioner expanded the unit, receiving another deferral for the expanded unit from April 1, 2000, to March 31, 2009. The petitioner's grievance was that the eligibility certificate for the expanded unit did not include the CST liability, only covering general sales tax, additional sales tax, surcharge, and additional surcharge.

2. Amendment of Eligibility Certificate to Include CST Liability:

The petitioner applied to SIPCOT on March 3, 2003, to amend the eligibility certificate to include CST liability, referencing G.O. Ms. No. 376 dated October 27, 1992. The petitioner argued that the deferral should include CST based on the notifications issued under section 9(2) of the Central Sales Tax Act, 1956, read with section 17A(1) of the Tamil Nadu General Sales Tax Act, 1959. Despite the petitioner's request, the Commissioner rejected the application on January 31, 2003.

The court reviewed various government orders and notifications, including G.O. Ms. No. 376, G.O. Ms. No. 12, G.O. Ms. No. 13, and G.O. Ms. No. 104. The court concluded that the deferral of CST liability should be granted to the expanded unit based on the eligibility criteria for expansion/diversification units being on par with new units as per G.O. Ms. No. 104. The court directed the third respondent to amend the eligibility certificate to include CST liability within six weeks.

3. Restoration of CST Remitted During the Deferral Period:

In W.P. No. 26437 of 2004, the petitioner sought a writ of mandamus to restore Rs. 48,94,636 remitted as CST for the assessment year 2002-03 and subsequent amounts recovered during the deferral period. The petitioner argued that the recovery was contrary to the government orders granting deferral of CST. The court, in light of the orders passed in W.P. No. 26436 of 2004, directed the restoration of the CST remitted and rescheduling of the repayment.

Conclusion:

The court allowed both writ petitions, directing the amendment of the eligibility certificate to include CST liability and the restoration of CST remitted during the deferral period. The connected W.P.M.P. No. 32192 of 2004 was closed.

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