2016 (5) TMI 596 - HC - VAT and Sales Tax

Seeking direction to decide the application for exemption from payment of advanced tax to 0% - Engaged in manufacturing of tax-free commodities - Advance tax paid on wheat on import is being accumulated as excess Input Tax Credit (ITC) as it is not having any tax liability on the sale of tax free goods - Held that - the present petition is being disposed of by directing the respondent no. 3 to decide the application dated 31.3.2016, in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioner within a period of three weeks from the date of receipt of certified copy of the order. - Petition disposed of

Summary

Issues:
1. Petitioner's application for exemption from payment of advance tax.
2. Delay in deciding the application by respondent No.3.

Analysis:
1. The petitioner, engaged in manufacturing tax-free commodities, filed a writ petition seeking a mandamus to direct respondent No.3 to decide its application for exemption from payment of advance tax at 0%. The petitioner accumulates excess Input Tax Credit due to no tax liability on the sale of tax-free goods. The State of Punjab introduced various tax regulations, including entry tax, which was later amended and levied on goods entering local areas. The petitioner applied for exemption from advance tax payment, but previous applications were not successful. The High Court directed respondent No.3 to decide the latest application within three weeks, affording the petitioner an opportunity of hearing.

2. The petitioner's counsel highlighted the delay in action on the application dated 31.3.2016 before respondent No.3. The High Court, without expressing an opinion on the case's merits, disposed of the petition by instructing respondent No.3 to decide the application within three weeks of receiving the court's order. The decision should be made in accordance with the law, accompanied by a speaking order and after providing the petitioner with a hearing opportunity.