2011 (2) TMI 1243 - HC - VAT and Sales Tax

Writ petition - eligibility certificate - section 12 of the Madhya Pradesh General Sales Tax Act, 1958 - petitioner is claiming exemption under Notification No. A-3-24-94-STV (108) dated October 6, 1994 providing exemption scheme for new units Held that - clause 3(i) specifically deals with different situations where the dealer who establishes a new industrial unit on or after 6th May, 1994 or who undertakes expansion in the existing industrial unit on or after such date shall have the option to avail of the facility of deferment of payment of tax under the Madhya Pradesh Deferment of Payment of Tax Rules, 1994 in lieu of the facility of exemption from payment of tax under this notification. It is not the case here. The petitioner never claimed for deferment of the payment of tax, so the sub-clause is not applicable in the present case. Sub-clause (ii) applies where effective steps were taken for establishing a new industrial unit before May 6, 1994, but who commences commercial production in such industrial unit on or after the said date, such dealer was having an option to avail of the facility of exemption from payment of tax under any scheme, to a new industrial units in force before May 6, 1994. But in the present case, the aforesaid position is not in existence and the said clause (ii) is also not available, matter is remanded to the State Level Committee to consider the case of the petitioner for grant of eligibility certificate

Issues Involved:
1. Eligibility for exemption under the Madhya Pradesh General Sales Tax Act, 1958.
2. Compliance with previous court directions.
3. Applicability of cut-off dates for exemption.
4. Alternative remedy of appeal.
5. Effective steps taken before cut-off dates.

Issue-wise Detailed Analysis:

1. Eligibility for exemption under the Madhya Pradesh General Sales Tax Act, 1958:
The petitioner, a private limited company engaged in manufacturing various containers, claimed exemption under Notification No. A-3-24-94-STV (108) dated October 6, 1994. The petitioner registered with the District Industries Centre, Mandla, and commenced commercial production on December 21, 2000. Despite these steps, the petitioner was denied the eligibility certificate, prompting the legal challenge.

2. Compliance with previous court directions:
The petitioner had previously approached the court in W. P. No. 4868 of 2002, resulting in a directive for the State to consider the petitioner's case as a special case under the notification dated October 6, 1994. However, the petitioner's application was again denied, leading to the current petition. The court reiterated that the case should be decided based on the earlier notification and the specific directions given in the prior judgment.

3. Applicability of cut-off dates for exemption:
The respondent argued that the petitioner was not entitled to the exemption due to cut-off dates specified in the notification. The court examined clause 3 of the notification, which detailed conditions under which exemptions could be granted. The court found that the specific sub-clauses cited by the respondents were not applicable to the petitioner's case, as the petitioner did not seek deferment of tax payment and was a small-scale industry, not medium or large scale.

4. Alternative remedy of appeal:
The respondent contended that the petitioner should have pursued an appeal before the State Level Committee as per the scheme's clauses 9 and 10. However, the court found that the specific directions given in the previous court order took precedence, and the matter should be reconsidered by the State Level Committee as per the notification dated October 6, 1994.

5. Effective steps taken before cut-off dates:
The petitioner argued that effective steps were taken before the issuance of the notification on June 9, 2000, including the purchase of land and machinery and registration with relevant authorities. The court acknowledged these steps and emphasized that the petitioner's case should be evaluated based on the notification dated October 6, 1994, as directed in the previous court order.

Conclusion:
The court quashed the decision of the District Level Committee dated February 1, 2010, and remanded the matter to the State Level Committee for reconsideration. The State Level Committee was directed to evaluate the petitioner's eligibility for the exemption certificate in light of the notification dated October 6, 1994, and the court's previous directions. The petitioner was allowed to submit additional facts within 30 days, and the State Level Committee was instructed to decide the matter within four months, providing an opportunity for a hearing if deemed necessary. The interim order preventing coercive action for tax recovery would remain in effect until the State Level Committee's decision. No costs were awarded.

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