2012 (3) TMI 374 - HC - VAT and Sales Tax

Extension of exemption from the Kerala General Sales Tax Act and the concessional rate of Central sales turned down - Held that - During the course of hearing, it is brought to the notice of this court that, pursuant to exhibits P11 to P16 notices, the proceedings have been finalised and final assessment orders have been passed by the concerned authority, fixing the liability . The learned counsel for the petitioner submits that the petitioner is pursuing further steps to have the same challenged by resorting to appropriate remedy. In the above circumstance, this court finds that the present writ petition does not deserve to be considered at all. It is also to be noted that, the question whether the claim for exemption as sought for could be granted, had come up for consideration before this court earlier and as per the judgment rendered by a Division Bench of this court reported in Prima Industries Ltd. v. State of Kerala 2005 (8) TMI 650 - KERALA HIGH COURT the same stands answered against the persons like the petitioner. The writ petition fails and the same is dismissed accordingly.

Summary

Issues:
1. Extension of exemption from Kerala General Sales Tax Act and concessional rate of Central sales tax.
2. Validity of notices issued for assessment under Kerala General Sales Tax Act and CST (Kerala) Rules.

Analysis:
1. The petitioner, a medium scale industrial undertaking, sought an extension of exemption from the Kerala General Sales Tax Act and concessional rate of Central sales tax till March 31, 2006, without any ceiling. The petitioner was initially granted exemption for seven years from the date of commercial production, but due to adverse circumstances, the company became sick and was referred to the BIFR for revival. The BIFR issued a scheme for rehabilitation, including the extension of sales tax exemption and concessional CST till March 31, 2006 without any ceiling. However, subsequent modifications and orders limited the benefit period to March 31, 2005. The Government rejected the petitioner's request for further extension, leading to legal proceedings challenging the decision. The court noted that the BIFR scheme did not confer an absolute right to exemption and upheld the Government's decision to deny the extension, citing past judgments against similar claims.

2. The petitioner also challenged the validity of notices issued for assessment under the Kerala General Sales Tax Act and CST (Kerala) Rules. The respondents argued that the petitioner had already received the eligible benefits under the relevant notifications and was not entitled to further extensions. The court considered the counter-affidavit filed by the respondents, highlighting the history of the petitioner's sick industrial status, failed revival schemes, and the Government's previous communications denying further exemptions. The court found that the petitioner's claim for exemption had been duly considered and rejected by the Government, and the challenge against the assessment notices was unsustainable under the law. The court dismissed the writ petition, stating that the petitioner had delayed the challenge and that final assessment orders had already been passed, leaving the petitioner to pursue appropriate remedies for further relief.

In conclusion, the court ruled against the petitioner's claims for extension of tax exemptions and concessional rates, upholding the Government's decision and dismissing the writ petition challenging the assessment notices. The judgment emphasized the importance of timely legal challenges and clarified the limits of entitlement to tax benefits under relevant schemes and notifications.