2013 (9) TMI 979 - HC - VAT and Sales Tax

Denial of exemption claim - petitioner was granted an eligibility certificate, dated, March 5, 1990/March 19, 1990, enabling him to claim exemption from payment of sales tax under an industrial policy, notified by the State of Punjab on March 30, 1989 - State of Punjab thereafter amended the Punjab General Sales Tax Act, 1948 by incorporating section 30A to provide for exemption from payment of sales tax, etc. - Section 30A of the Act and Rules, however, did not provide for exemption from sales tax to industrial units that had obtained eligibility certificates before the amendment - Bar of limitation - Held that - Section 30A of the Act as originally enacted, did not deal with units eligible for exemption under the industrial policy of 1989. The petitioner, therefore, had no right to pray for exemption from payment of sales tax under section 30A, as originally enacted. The proviso and Explanation added to section 30A of the Act that came into force on November 14, 1992 clarified that exemptions would be provided to industries which have come into production for the first time on or after the first day of April, 1989. Thus, the right to apply for exemption, under section 30A of the Act, was conferred upon the petitioner, for the first time on November 14, 1992, on which date the petitioner's application was already pending adjudication. - The proviso and the Explanation having been added during pendency of the application filed by the petitioner, there was no question of the application being barred by limitation. The Excise and Taxation Commissioner was, therefore, not empowered to hold that the application was barred by limitation. - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of section 30A of the Punjab General Sales Tax Act, 1948 regarding exemption from sales tax for industrial units.
2. Application of the proviso and Explanation added to section 30A of the Act.
3. Consideration of the timeline for applying for exemption and condonation of delay.

Analysis:

1. The judgment dealt with the interpretation of section 30A of the Punjab General Sales Tax Act, 1948, which empowers the State Government to grant exemption from tax for industrial development. The petitioner had obtained an eligibility certificate before the enactment of section 30A. The State later introduced a proviso to section 30A, specifying that industries coming into production after April 1, 1989, could be exempted from sales tax. The court noted that the petitioner did not have the right to apply for exemption under the original enactment of section 30A, but the proviso and Explanation added later clarified the eligibility criteria for exemption.

2. The proviso and Explanation added to section 30A of the Act clarified that industries coming into production after April 1, 1989, could be exempted from sales tax under certain conditions. The court emphasized that the petitioner's right to apply for exemption was conferred for the first time on November 14, 1992, when the proviso and Explanation were in force. As the petitioner's application was already pending adjudication on that date, it could not be considered barred by limitation. The court held that the Excise and Taxation Commissioner was not authorized to reject the application on the grounds of limitation.

3. The judgment addressed the timeline for applying for exemption and the condonation of delay. The petitioner had applied for exemption on February 19, 1992, after the introduction of the proviso to section 30A. The Excise and Taxation Commissioner rejected the application citing delay, as the proviso was introduced on March 29, 1990. However, the court clarified that the petitioner's right to apply for exemption only arose after the introduction of the proviso and Explanation in November 1992. Therefore, the court allowed the writ petition, set aside the impugned letter, and remitted the matter for reconsideration in accordance with the law.

In conclusion, the judgment clarified the eligibility criteria for exemption from sales tax under section 30A of the Act, emphasizing the importance of considering the timeline for application and the impact of subsequent amendments on the rights of the petitioner.