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2019 (4) TMI 529 - HC - VAT and Sales TaxValidity of assessment - Pondicherry General Sales Tax Act - benefit of exemption notification in G.O.Ms.No.35/99/F.2 dated 30.03.1999 - completion of infrastructure before cut-off date - Held that - The provisional certificate issued by the Directorate of Industries, Government of Pondicherry is a provisional registration certificate registering the appellant as a small scale undertaking unit. This certificate is to enable the appellant to obtain all clearances/facilities for its setting. The certificate clearly states that no production should be started before obtaining necessary clearances and it is granted without any guarantee for availability of any raw material and such other matters. Therefore, to term such a certificate as a license as required to be obtained in terms of the Proviso in G.O.Ms.No.35/99/F.2 dated 30.03.1999 is an argument which is stated to be rejected - The learned Single Bench was fully right in rejecting the contentions raised by the appellant by arguing that they qualify for exemption in terms of the Proviso. Whether G.O.Ms.No.36/2000/F.2 dated 21.07.2000 would come to the aid and assistance of the appellant? - Held that - The Government Order in G.O.Ms.No.36/2000/F.2 dated 21.07.2000 explicitly states that the Government discontinued the exemption made in G.O.Ms.15/74/Fin.(CT) dated 25.06.1974 and G.O.Ms.164/86/F.6 dated 29.09.1986 which was in terms of G.O.Ms.No.35/99/F.2 dated 30.03.1999 - What is important to note is that G.O.Ms.No.36/2000/f.2 dated 21.07.2000 is not in supersession of G.O.Ms.No.35/99/F.2 dated 30.03.1999 and consequently, the correct manner to interpret the exemption notification is to hold that with effect from 01.04.1999 a new industry commencing production of Indian Made Foreign Liquor is not entitled for any exemption from payment of sales tax. Even assuming G.O.Ms.No.36/2000/F.2 dated 21.07.2000 is made applicable, the appellant having not started production within two years from 21.07.2000 is not entitled to any benefit. The appellant has not made out any case for interference with the orders passed in the writ petitions or against the assessment orders - Appeal dismissed.
Issues Involved:
1. Legality and validity of the second condition in the First Proviso to G.O.Ms.No.35/99/F.2 dated 30.03.1999. 2. Eligibility for tax exemption under the Pondicherry General Sales Tax Act (PGST Act) and Pondicherry Value Added Tax Act (PVAT Act). 3. Applicability of G.O.Ms.No.36/2000/F.2 dated 21.07.2000 to the appellant's case. 4. Procedural propriety of the assessment orders and show cause notices issued by the Assessing Officer. Detailed Analysis: 1. Legality and Validity of the Second Condition in the First Proviso to G.O.Ms.No.35/99/F.2 dated 30.03.1999: The appellant challenged the second condition in the First Proviso to G.O.Ms.No.35/99/F.2 dated 30.03.1999, which excluded certain industries from tax exemption. The court examined the condition and found that the appellant did not meet the criteria for exemption as they did not obtain the necessary licenses before the cut-off date of 01.04.1999. The provisional certificate from the Directorate of Industries was deemed insufficient as it was not a license but merely a provisional registration. The court upheld the validity of the condition, emphasizing strict interpretation of exemption notifications in favor of revenue. 2. Eligibility for Tax Exemption under PGST Act and PVAT Act: The appellant claimed exemption from sales tax under the PGST Act for the turnover from the sales of goods manufactured in their industry located in Pondicherry. The court noted that the appellant's industry commenced production only on 04.09.2003, which was beyond the stipulated period for exemption. The court held that the appellant was not entitled to the claimed exemption as they did not meet the necessary conditions, including timely commencement of production. 3. Applicability of G.O.Ms.No.36/2000/F.2 dated 21.07.2000: The appellant argued that they should be granted exemption under G.O.Ms.No.36/2000/F.2 dated 21.07.2000, which provided relief to industries in the pipeline. The court analyzed this notification and found that it did not supersede G.O.Ms.No.35/99/F.2 dated 30.03.1999. The court emphasized that new industries commencing production of Indian Made Foreign Liquor after 01.04.1999 were not eligible for exemption. Furthermore, the appellant did not start production within two years from the date of the notification (21.07.2000), thus failing to meet the conditions for exemption. 4. Procedural Propriety of the Assessment Orders and Show Cause Notices: The appellant challenged the show cause notices and assessment orders issued by the Assessing Officer. The court observed that the appellant had not filed objections to the show cause notices, leading to the confirmation of the proposed assessments. The court dismissed the writ petitions challenging these orders, granting the appellant 15 days to submit replies to the show cause notices and 30 days to file an appeal against the assessment orders. Conclusion: The court dismissed the writ appeals and writ petitions, upholding the legality of the second condition in G.O.Ms.No.35/99/F.2 dated 30.03.1999, and rejecting the appellant's claims for tax exemption under both the PGST Act and PVAT Act. The court ruled that G.O.Ms.No.36/2000/F.2 dated 21.07.2000 did not apply to the appellant's case and affirmed the procedural propriety of the assessment orders and show cause notices. The appellant was granted limited time to respond to the show cause notices and file appeals against the assessment orders.
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