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2015 (9) TMI 370 - SC - VAT and Sales TaxRate of CST @2% or 1% - Industrial Policy of the State of Himachal Pradesh - period 01.04.2009 to 17.06.2009 - The whole thrust of the contention advanced by the State is that since the notification under the Act providing for tax concession was issued only on 18.06.2009 wherein it was specifically mentioned that the notification would have immediate effect and would operate for the period ending on 31.03.2013, the appellant is not entitled to the CST concession @ 1% for the intervening period between 01.04.2009 to 18.06.2009. The Government shall speak only in one voice. It has only one policy. The departments are to implement the Government policy and not their own policy. Once the Council of Ministers has taken a decision to extend the 2004 Industrial Policy and extend tax concession beyond 31.03.2009, merely because the Excise and Taxation Department took some time to issue the notification, it cannot be held that the eligible units are not entitled to the concession till the Department issued the notification. No doubt, the statutory notification issued by the Excise and Taxation Department under Section 8(5)(b) of the Act on 18.06.2009 has stated that the eligible units will be entitled to the concession with immediate effect. Merely because such an expression has been used, it cannot be held that the State Government can levy the tax against its own policy. As we have already clarified, it is not the introduction of a new policy but an extension of the benefits under the extended policy. - appellant shall be entitled to the concessional rate of CST @ 1 per cent with effect from 01.04.2009 till 31.03.2013 until it is duly varied by the State Government. - Decided in favor of assessee.
Issues:
1. Whether the appellant is liable to pay Central Sales Tax (CST) @ 2 per cent or @ 1 per cent on inter-State sales for the period 01.04.2009 to 17.06.2009. 2. Interpretation of the Notification dated 18.06.2009 issued by the Excise and Taxation Department regarding the concessional rate of CST. 3. The impact of the Cabinet decision to extend the concession period up to 31.03.2013 or until the CST is phased out. 4. The validity of the notification issued by the State Government and the Excise and Taxation Department regarding the CST concession. Analysis: 1. The dispute in this case revolves around the appellant's liability to pay CST at either 2 per cent or 1 per cent on inter-State sales during the period from 01.04.2009 to 17.06.2009. The Industrial Policy of the State of Himachal Pradesh provided a concessional rate of CST at 1 per cent until 31.03.2009, with a policy decision to extend this concession until 31.03.2013 or until the CST is phased out. The High Court held that the appellant was not entitled to the concession post 31.03.2009 until the Notification dated 18.06.2009 was issued by the Excise and Taxation Department, which stated immediate effect for the period ending 31.03.2013. 2. The Notification dated 18.06.2009 by the Excise and Taxation Department played a crucial role in determining the appellant's entitlement to the concessional rate of CST. The State contended that the immediate effect mentioned in the notification precluded the appellant from claiming the concession for the period between 01.04.2009 to 18.06.2009. However, the appellant argued that the State Government's policy decision to extend the concession until 31.03.2013 bound all departments, including the Excise and Taxation Department. The Supreme Court emphasized that the government must maintain a consistent policy stance, and the departments should implement the government's decisions without contradiction. 3. The Council of Ministers' decision to extend the Industrial Policy and CST concession beyond 31.03.2009 was a pivotal factor in the judgment. The Court highlighted that once a policy decision is taken by the government, all departments must align their actions accordingly. The Finance Department's agreement and the Council of Ministers' approval to extend the concession until 31.03.2013 reinforced the appellant's entitlement to the CST concession. The Court emphasized that the government could not levy taxes contrary to its policy decisions, and the departments must adhere to the government's directives. 4. The Court scrutinized the Notification dated 18.06.2009 issued by the Excise and Taxation Department, emphasizing that it was an extension of the existing concession rather than a new policy introduction. The High Court's misinterpretation of the notification as initiating a new policy was rectified, clarifying that the appellant was entitled to the concessional rate of CST at 1 per cent from 01.04.2009 to 31.03.2013, in line with the government's decision. The appeal was allowed, setting aside the impugned judgment, and declaring the appellant's entitlement to the concessional rate of CST until 31.03.2013, subject to any variations by the State Government.
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