2013 (7) TMI 871 - HC - VAT and Sales Tax

Benefit under the Rajasthan Sales Tax New Incentive Scheme, 1989 - Held that - AO has no jurisdiction to sit over the judgment passed by the committee, and the proper course for the AO was to make a representation to the committee in case the petitioner was deviating from the claim originally granted which has not been done in the present case. Therefore, the AO has no jurisdiction to take his own view and going behind the eligibility granted by the committee. In the light of the judgments and the judgment of the apex court in the case of Sonebhadra Fuels 2006 (8) TMI 304 - SUPREME COURT OF INDIA in which the same business was there as in the present case where it has been held to be manufacturing and that was the objection of the AO that the assessee is not a manufacturer now therefore, in the light of the judgment of the apex court where the activity has been held to be manufacturing then even on the merits the claim of the petitioner deserves to be allowed. - Decided in favour of assessee.

Issues:
1. Challenge to assessment order under Rajasthan Sales Tax New Incentive Scheme, 1989.
2. Jurisdiction of assessing officer (A.O.) in granting tax exemption.
3. Alternative remedy available to challenge assessment order.
4. Finality of previous judgments quashing assessment orders.
5. Authority of Screening Committee in granting eligibility certificates.

Analysis:
1. Challenge to assessment order under Rajasthan Sales Tax New Incentive Scheme, 1989:
The petitioner challenged the assessment order before the Rajasthan Taxation Tribunal, which was later transferred to the High Court. The claim was rejected despite the eligibility certificate granted by the District Level Screening Committee under the Rajasthan Sales Tax New Incentive Scheme, 1989. The petitioner relied on previous judgments where similar claims were allowed, emphasizing that the assessing officer was not justified in rejecting the claim.

2. Jurisdiction of assessing officer (A.O.) in granting tax exemption:
The High Court observed that under the Rajasthan Sales Tax Incentive Scheme, 1989, the authority to determine eligibility for sales tax exemption lies with the Screening Committee, not the assessing officer. The court reiterated that the assessing authority cannot cancel an eligibility certificate granted by the screening committee. Previous judgments highlighted that the assessing officer does not have the jurisdiction to go against the exemption certificate granted by the higher authority, such as the committee.

3. Alternative remedy available to challenge assessment order:
The respondent argued that the petitioner should have filed an appeal before the Deputy Commissioner (Appeals) instead of challenging the assessment order through a writ petition. However, the court noted that previous judgments had quashed assessment orders between the same parties, making the challenge through writ petition acceptable. The court emphasized that after such final judgments, there was no justification to send the matter back to the appellate authorities after a significant delay.

4. Finality of previous judgments quashing assessment orders:
The High Court referred to previous judgments quashing assessment orders in similar cases involving the same parties. These judgments highlighted that once an exemption is granted, the taxing authority cannot issue a fresh notice reducing the exemption percentage without modifying the original exemption certificate. The court emphasized that the orders quashing assessment orders had become final, rendering the respondent's claim unacceptable.

5. Authority of Screening Committee in granting eligibility certificates:
The court reiterated that the Screening Committee holds the authority to grant eligibility certificates under the Rajasthan Sales Tax Incentive Scheme, 1989. The assessing officer cannot interfere with the eligibility granted by the committee. The court emphasized that the assessing officer must follow the decisions of the committee and cannot independently decide on the eligibility for exemption.

In conclusion, the High Court allowed the sales tax revision petition, quashing the assessment order passed by the assessing officer. The court emphasized the importance of following the decisions of the Screening Committee in granting eligibility certificates and reiterated that the assessing officer does not have the jurisdiction to go against the exemption certificate granted by the higher authority.

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