2009 (11) TMI 833 - HC - VAT and Sales Tax

Condonation of delay Held that - The Himachal Pradesh General Sales Tax Act, 1968 being a specific Act or statute since has prescribed limitation period under section 33(1) for making statement of case to the High Court by the Financial Commissioner. Such statutory prescribed period is a requirement under law which could override the provision of section 5 of the Limitation Act as legislative intent carries importance which requires that the condonation of delay could only be granted up to 60 days for making statement of case to the High Court. We have noticed that the grounds and explanation for condonation of delay are vague and insufficient, however we are not going to examine sufficiency of cause for condonation of delay but we are of the considered view that the sales tax reference should not have been made beyond the period prescribed under section 33(1) of the Act. Thus sales tax reference dismissed.

Summary

Issues Involved:
1. Condonation of delay in filing the reference application under Section 33 of the H.P. General Sales Tax Act, 1968.
2. Tax exemption status of by-products/residue of a main commodity exempted from tax.
3. Requirement of statutory form C for claiming tax exemption on inter-State sales of exempted products.

Detailed Analysis:

1. Condonation of Delay:
The primary issue was whether the Financial Commissioner (Appeals) was justified in condoning the delay in filing the reference application under Section 33(1) of the H.P. General Sales Tax Act, 1968. The Financial Commissioner condoned the delay, emphasizing the substantial public revenue involved and the wider public policy implications. The court examined the statutory provisions, particularly Section 33, which prescribes a 60-day limitation period for filing such references. The court noted that the Act does not allow for condonation beyond this period, aligning with precedents from the Supreme Court, such as Union of India v. Popular Construction Co. and Singh Enterprises v. Commissioner of Central Excise, which emphasize strict adherence to statutory limitation periods. Consequently, the court found the condonation of delay unjustified and dismissed the Sales Tax Reference No. 1 of 2007.

2. Tax Exemption for By-products/Residue:
The court addressed whether by-products or residue of a main commodity, which is exempted from tax, also qualify for tax exemption when the government notification does not specifically provide for such exemption. The Tribunal had previously ruled that the SS unit, enjoying tax exemption for manufacturing vegetable ghee and refined oil, should not be liable for sales tax on its by-products/residue, as these are resultant products of the manufacturing process. The court's analysis upheld this interpretation, emphasizing the comprehensive nature of the tax exemption granted to the main products and their by-products.

3. Requirement of Form C for Inter-State Sales:
The third issue involved whether the submission of statutory form C is necessary for claiming tax exemption on inter-State sales of exempted products. The Tribunal had ruled that the industrial unit was not required to produce form C for claiming sales tax concession on inter-State transactions of the main product. The court supported this view, indicating that the exemption for the main product extends to inter-State sales without the need for additional documentation like form C.

Conclusion:
The court concluded that the delay in filing the reference application was unjustifiable and beyond the permissible period under Section 33(1) of the H.P. General Sales Tax Act, 1968. Consequently, Sales Tax Reference No. 1 of 2007 was dismissed. Following this, the writ petition challenging the condonation of delay was allowed, setting aside the Financial Commissioner (Appeals)'s order dated July 6, 2007. The court upheld the Tribunal's interpretations regarding tax exemptions for by-products and the non-requirement of form C for inter-State sales of exempted products.