2013 (5) TMI 820 - HC - VAT and Sales Tax

whether exemption granted to the existing unit could be curtailed by notification issued by the State Government. The extent of exemption and its percentage, provided in section 4A of the Act as amended by Ordinance No. 18 of 1999, is subject to issuance of notification,

Summary

Issues:
1. Whether exemption granted to an existing unit on investment of Rs. 5 crores for 15 years could be curtailed by a notification issued by the State Government.

Analysis:
1. The petitioner sought to quash an order passed by the Greater Noida Divisional Level Industrial Development Authority Committee and prevent further proceedings based on the order. The petitioner relied on past judgments indicating that once an exemption is granted, the Divisional Level Committee lacks the authority to curtail the period of exemption.

2. The crux of the matter revolved around the authority responsible for amending exemption certificates. The petitioner argued that only the Commissioner of Trade Tax had the power to carry out such amendments, and the Divisional Level Committee lacked the authority to modify eligibility certificates.

3. The State's position, as per the counter-affidavit, was based on the non-issuance of a necessary notification. The exemption, as per Ordinance No. 18 of 1999, was contingent upon the issuance of a notification, which was never realized. The State contended that benefits could not be extended to units with fixed capital investments exceeding Rs. 5 crores due to the absence of the required notification.

4. Reference was made to a Supreme Court judgment highlighting the importance of notifications issued by the State Government in line with industrial policies. The Supreme Court emphasized that the State Government cannot deny benefits available under industrial incentive policies through notifications issued under relevant legal provisions.

5. The High Court's analysis focused on the legislative framework, particularly section 4A of the Act as amended by Ordinance No. 18 of 1999. It was emphasized that the grant of exemption and its percentage were subject to the issuance of a notification, which was not issued in this case. The Court disagreed with the petitioner's argument that notification was unnecessary for availing benefits under the relevant provision.

6. Although the State had granted relief on the quantum of exemption to the petitioner, the Court clarified that the primary issue for consideration was the petitioner's entitlement to the claimed exemption in the absence of the required notification. Consequently, the writ petition was dismissed based on the absence of the essential notification required for the grant of exemption.