2011 (2) TMI 1316 - HC - VAT and Sales Tax

Whether in the facts of the present case the writ petitioner is entitled to get benefit of section 39 of the 1994 Act? Held that - In order to get the benefit of tax holiday registration with the Directorate of Cottage and Small Scale Industries is mandatory. It appears that the order dated April 4 2003 rejecting registration under the 1994 Act has not been challenged by the writ petitioner and thus has attained the finality. in order to get the benefit under the provisions of section 39 of the 1994 Act the writ petitioner must comply with the requirement of the said Act and the Rules framed thereunder. The learned Tribunal below rightly concluded that no exemption could be granted ignoring the provisions of the 1994 Act or the Rules framed thereunder. Appeal dismissed.

Summary

Issues:
1. Eligibility for tax holiday under section 39 of the West Bengal Sales Tax Act, 1994.

Analysis:
The case involved a manufacturer challenging the rejection of their application for an eligibility certificate (E.C.) under section 39 of the West Bengal Sales Tax Act, 1994. The manufacturer had shifted their factory location, leading to disputes regarding registration and compliance with the Act's provisions. The central argument was whether the manufacturer was entitled to the tax holiday benefit under section 39.

The manufacturer contended that under the Micro, Small and Medium Enterprises Development Act, 2006, they were not required to obtain a permanent registration certificate from the Directorate of Cottage and Small Scale Industries, West Bengal. They argued that the rejection of their application for the eligibility certificate and denial of exemption from sales tax payment violated the doctrine of promissory estoppel. They claimed to have relied on promises of exemption from the state government to set up their industrial unit.

However, the court found that registration with the Directorate of Cottage and Small Scale Industries was mandatory to avail the tax holiday benefit under section 39. The court emphasized that the State Government had promised the tax holiday subject to prescribed conditions and restrictions, including registration requirements. The rejection of the application was upheld based on non-compliance with the Act's provisions and rules.

Regarding the argument related to the Micro, Small and Medium Enterprises Development Act, 2006, the court clarified that the case was considered based on the provisions of the 1994 Act. Compliance with the requirements of the specific Act and Rules was necessary to qualify for the tax holiday benefit. The court affirmed that no exemption could be granted by disregarding the statutory provisions.

Ultimately, the court dismissed the application, finding no merit in the manufacturer's arguments. The judges, Bhaskar Bhattacharya and Sambuddha Chakrabarti, agreed on the decision, upholding the rejection of the eligibility certificate application and denying the tax holiday benefit under section 39 of the West Bengal Sales Tax Act, 1994.