2014 (7) TMI 818 - HC - VAT and Sales Tax

Denial of benefit under the Sales Tax Incentive Scheme - Held that - initially operation of the judgment of the Division Bench was stayed and that stay was granted by the honourable apex court on April 4, 1994, by mentioning this fact, came to the conclusion that the respondents (traders) cannot be discriminated against and, there fore, a cut-off date was fixed as April 4, 1994 and it was directed that the respondents will be allowed to retain the benefit, if any, enjoyed at least up to April 4, 1994, just as the other oil industries have been allowed to retain benefits up to April 4, 1994 and it was clarified that the benefit cannot be extended beyond April 4, 1994 or up to April 20, 1999. Therefore, by the aforesaid two judgments of the honourable apex court, it was directed that the bene fits flowing from issuance of certificate or/and incentive scheme was not correct and ultimately the notification of May 7, 1990 was upheld as valid. It is apparent that the explanation answers the present controversy which makes it very clear that any mistake apparent from the record by a judgment of the Supreme Court, Rajasthan High Court or the Rajasthan Tax Board, therefore, in my view, in the light of the judgment of the honourable apex court, the rectification, insofar as the present facts and circumstances, are concerned, have been correctly made by the assessing officer. It is a matter of fact that when benefit has been extended by the honourable apex court, considering the hardship faced by the similarly situated traders, up to the period when the operation of the judgment of this court was stayed, i.e., April 4, 1994 and when benefit has been denied to all such assessees, who were before the honourable apex court, then by no stretch of imagination, such a benefit beyond April 4, 1994 can be extended to the present respondents. The benefit for all assessees or for all similarly situated assessees would be extended only up to April 4, 1994 as upheld by honourable the apex court and, therefore, in my view, both, i.e., the Tax Board as well as the DC (A) have erred in holding it otherwise. - Decided in favour of Revenue.

Summary

Issues:
1. Interpretation of Sales Tax Incentive Scheme under the Rajasthan Sales Tax Act, 1954.
2. Rectification of mistakes apparent on the face of the record under section 37 of the Rajasthan Sales Tax Act, 1994.

Issue 1: Interpretation of Sales Tax Incentive Scheme under the Rajasthan Sales Tax Act, 1954:
The High Court dealt with the sales tax revision petitions challenging orders passed by the Rajasthan Tax Board and Deputy Commissioner (Appeals) regarding tax exemption under the Sales Tax Incentive Scheme, 1989. The petitioner-Department contended that the respondent-assessee was only entitled to benefit up to April 4, 1994, based on judgments of the apex court. The court referred to precedents like Lokendra Industries and State of Rajasthan v. Gopal Oil Mills to establish that benefits could not extend beyond the specified date. The court analyzed the legal position set by the apex court and upheld the rectificatory actions taken by the assessing officer to correct the mistakenly extended benefits post-April 4, 1994. The court emphasized that benefits granted based on judicial pronouncements cannot be extended beyond the specified period, as per the law laid down by the apex court.

Issue 2: Rectification of mistakes apparent on the face of the record under section 37 of the Rajasthan Sales Tax Act, 1994:
The court examined the provisions of section 37 of the Rajasthan Sales Tax Act, 1994, which allow rectification of mistakes apparent from the record by the assessing authority or Tax Board. The court highlighted that rectification can be made based on judgments of the Supreme Court or High Court, as explained in the statute. By applying the legal principles enunciated by the apex court in various cases, including Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works, the court emphasized the importance of adhering to settled legal positions and avoiding judicial adventurism. The court concluded that the orders of the Tax Board and Deputy Commissioner (Appeals) were erroneous in not aligning with the legal precedents established by the apex court, and thus, the sales tax revision petitions were allowed, quashing the impugned orders and upholding the decision of the assessing officer.

This comprehensive analysis of the judgment by the High Court of Rajasthan provides a detailed insight into the interpretation of the Sales Tax Incentive Scheme and the rectification of mistakes under the relevant provisions of the law, emphasizing the significance of adhering to established legal principles and judicial pronouncements.