2017 (6) TMI 838 - HC - VAT and Sales Tax

Interpretation of statute - Denial of deferral scheme - Revenue case is that the guidelines issued by the Government, vide G.O.Ms.No.119 of Commercial Taxes and Religious Endowments Department, dated 13.04.1994, states that the Company has to achieve its production volume and base sales volume in order to avail itself of the interest free sales tax deferral facilities - Held that - due to divergent views taken by the High Court and Supreme Court in the matter, in the case of India Cements Limited, the impugned order has to be set aside and the matter requires fresh consideration - petition allowed by way of remand.

Summary

Issues:
Challenge to assessment order denying deferral scheme benefits under CST Act 1956 for assessment year 2001-2002.

Analysis:
The petitioner, a company, challenged an assessment order denying their claim for availing the deferral scheme under the Central Sales Tax Act, 1956. The petitioner argued that a previous decision by the Hon'ble Division Bench of the High Court, upheld by the Supreme Court, supported their eligibility for the deferral scheme. The respondents, on the other hand, justified the denial based on government guidelines requiring the company to meet production and sales volume criteria to avail the deferral facilities.

The High Court noted that the issue in the present case was covered by previous decisions. The court referred to the earlier judgment which stated that a dealer would be eligible for sales tax deferral if production exceeded the base production volume for sales made in a financial year. The Supreme Court also concurred with this view, emphasizing the importance of circulars issued by the revenue department, which are binding on departmental authorities.

Based on the principles established by the Supreme Court and the High Court's Division Bench in previous cases, the High Court set aside the impugned order and remitted the matter back to the first respondent for fresh consideration. The court directed the respondent to reconsider the case in light of the judgments referred to and pass appropriate orders within twelve weeks.

In conclusion, the High Court allowed the Writ Petition, quashed the impugned order, and instructed a fresh consideration by the first respondent, emphasizing adherence to the legal principles established in previous judgments.