2010 (11) TMI 891 - HC - VAT and Sales Tax

Petitioner has sought for issuance of a writ of certiorarified mandamus to quash the proceedings of the second respondent dated May 14, 2008 and to direct the first and second respondents, namely, the Government and the SIPCOT, to amend the eligibility certificate issued for Interest Free Sales Tax Deferral Scheme by fixing the base production volume and base sales volume as per the petitioner s representation dated January 10, 2008. Held that - Taking note of the course adopted by the second respondent to the similarly placed assessee, who had sought for an amendment in the eligibility certificate and in the context of the representation made by the petitioner before the Government, I have no hesitation in setting aside the order passed by the second respondent. Accordingly, the order passed by the second respondent stands set aside and the first respondent is hereby directed to place the matter before the High Level Joint Committee consisting the Industries Department, Commercial Taxes Department, Finance Department, SIPCOT and the second respondent and afford an opportunity of personal hearing to the petitioner to state its case before the Committee, which shall consider the same and pass orders in accordance with law within a period of twelve weeks from the date of receipt of a copy of the order

Summary

Issues:
1. Amendment of eligibility certificate under Interest Free Sales Tax Deferral Scheme.
2. Rejection of petitioner's request for amendment of base production volume.
3. Exclusion of export turnover and consignment turnover from sales turnover.
4. Jurisdiction of the High Level Joint Committee in decision-making.

Analysis:
1. The petitioner sought a writ to quash proceedings and amend the eligibility certificate under the Interest Free Sales Tax Deferral Scheme. The certificate granted deferral of sales tax based on production/sale volume. The petitioner requested a change in base production and sales volume, which was initially rejected by the second respondent. Subsequent representations were also denied, leading to the filing of the writ petition.

2. The petitioner's representations aimed to exclude export and consignment turnover from sales turnover for accurate tax calculation. Despite multiple pleas for amendment, the second respondent refused to consider the requests, citing inability to amend the base production volume based on previous government orders.

3. The second respondent argued that the petitioner's request had already been partially granted concerning base sales and production volume for domestic sales in a specific year. However, the petitioner contended that the decision should have been referred to the High Level Joint Committee for proper consideration, as done in a similar case with another entity.

4. The court agreed with the petitioner, stating that the second respondent lacked authority to make a unilateral decision without proper justification. The court directed the matter to be placed before the High Level Joint Committee for a comprehensive review and ordered a decision within twelve weeks. The petitioner was instructed to submit a fresh representation with all necessary documents to the first respondent for further consideration.

This judgment highlights the importance of procedural fairness and proper authority in decision-making processes under government schemes, emphasizing the need for thorough review and justification for any denial of requests for amendment or modification of eligibility criteria.