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2013 (9) TMI 36 - HC - VAT and Sales TaxDeferral of Sales Tax - Revenue denied deferral of sales tax at turnover relating to sale of steel scrap made by the assesse from their unit Held that - When once the eligibility certificate is given, the petitioner is bound by the same. The Sales Tax authorities are merely acting on the terms of the eligibility certificate. Thereafter, when the petitioner moved the authorities for reconsidering their stand, impliedly they have said that the earlier eligibility certificate did not include the scrap produced during the manufacturing of goods. Having sought for clarification and failed in their attempt, they cannot now make use of this court to seek to expand the scope of the eligibility certificate. The eligibility certificate once granted cannot be reviewed by this court under any circumstances as it is only the beneficial scheme for deferral. It is not the case of the petitioner that tax is levied on a different basis. On the other hand, the liability to pay the tax was accepted. It was only the deferral of tax payment as concession that was obtained by the petitioner is now sought to be revised. The eligibility certificate followed by an agreement reached between the parties cannot be reopened at the instance of the petitioner that too sitting under Article 226 of the Constitution. In different circumstances, the common sense meaning of certain products can mean different things and difference places especially in the context of deferral scheme. ITC Batrachalam Vs. State of A.P. 2001 (3) TMI 873 - SUPREME COURT OF INDIA - When matters are interconnected, it is the duty of the counsel to bring it to the notice of the court the pendency of other matters in relation to the same subject - Even otherwise the court merely directed the respondents to reconsider the question as to whether the steel scrap produced by the petitioner industry will qualify to be the product so as to enjoy the eligibility certificate. Under Section 4-A of the U.P. Trade Tax Act, a soft drink company claimed eligibility certificate for deferral payment. The eligibility certificate defined the financial limit for fixed capital investment for availing deferrals. The question arose whether bottles and crates which hold them will also be eligible to come under the fixed capital came to be considered by the Supreme Court in Commissioner of Trade Tax, Uttar Pradesh Vs. Varun Beverages Limited 2011 (4) TMI 592 - SUPREME COURT OF INDIA and agreed that bottles for which investments were made were eligible to be counted for fixed capital investment, but at the same time, crates were excluded. Decided against assesse.
Issues Involved:
1. Denial of deferral of sales tax on the turnover relating to the sale of steel scrap. 2. Interpretation of eligibility certificate and whether it includes by-products like steel scrap. 3. Applicability of previous judgments and government orders to the current case. Issue-wise Detailed Analysis: 1. Denial of Deferral of Sales Tax on Steel Scrap: The petitioner challenged the orders dated 31.3.2006 denying deferral of sales tax on the turnover from the sale of steel scrap. The petitioner argued that steel scrap, which emerges as a marketable by-product during the manufacturing of automobile parts, should be eligible for sales tax deferral as per the eligibility certificate issued by SIPCOT. The eligibility certificate allowed deferral of sales tax not exceeding Rs. 1521.17 lakhs for nine years from the commencement of commercial production. 2. Interpretation of Eligibility Certificate: The eligibility certificate issued by SIPCOT specified that the deferral scheme applies to the unit/company as long as it manufactures products for which the certificate was issued. The petitioner sought clarification from SIPCOT on whether the sale of steel scrap qualifies for the deferral scheme. SIPCOT, however, refused to include steel scrap in the eligibility certificate, stating that products not indicated in the application for IFST deferral would not qualify for the concession. 3. Applicability of Previous Judgments and Government Orders: The petitioner relied on the judgment in Commercial Tax Officer, Thirupparangundram Assessment Circle vs. Thiagarajar Mills Ltd. and ITC Bhadrachalam Paper Boards Ltd. vs. State of A.P., which interpreted similar government orders to include by-products like scrap under the deferral scheme. The petitioner argued that the term "products manufactured" should include by-products like steel scrap, as recognized in these judgments. However, the court noted that the petitioner, having sought and failed to obtain clarification from SIPCOT, cannot now use the court to expand the scope of the eligibility certificate. Common Order and Conclusion: The court dismissed all three writ petitions, stating that the eligibility certificate and the subsequent agreement between the parties did not include steel scrap under the deferral scheme. The court emphasized that the eligibility certificate, once granted, cannot be reviewed or expanded by the court under Article 226 of the Constitution. The court also highlighted that the petitioner had accepted the liability to pay tax and was only seeking deferral as a concession. The court found no grounds to interfere with the impugned assessment orders and closed the connected miscellaneous petitions. Final Judgment: All three writ petitions were dismissed, and no costs were awarded. The court concluded that the eligibility certificate did not cover steel scrap, and the petitioner could not seek to expand its scope through judicial intervention.
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