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2019 (4) TMI 1139 - HC - VAT and Sales TaxValidity of Revised entitlement certificate dated 02.04.2018 - constitutional validity of Clause 13 of the Rajasthan Invest Promotion Scheme-2013 - Time limitation for rectification of Mistake - HELD THAT - Clause 9(B)(viii) of the RIPS-2003 inter alia provides that with a view to rectify mistake apparent on the record, subsidy sanctioned by the assessing authority of the Commercial Taxes Department, under this scheme may be rectified suo motu or otherwise any order passed by the assessing officer as per the provision of Section 33 of the Rajasthan Value Added Tax Act-2003. This is thus clear that this provision has been intended to be applied by the assessing officer of the Commercial Taxes Department. Meaning thereby, had the assessing officer initiated the action to rectify the mistake, he could do so only within a period of limitation of four years prescribed under Section 33 of the Rajasthan Value Added Tax Act, 2003. This provision cannot therefore create any impediment for the State to invoke Clause 13 of the RIPS-2003. Clause 7 of the RIPS-2003 is the relevant provision relating to Capital Investment Subsidy with which we are concerned in the present matter. Clause 7(i)(a) of the RIPS-2003 provides that in case of new investments made, the sum total of Capital Investment Subsidy (Interest component) and Capital Investment Subsidy (wage component) would be subject to a maximum limit of fifty percent of the tax payable and deposited under the Rajasthan Sales Tax Act, 1994, the Central Sales Tax Act, 1956 and Rajasthan Value Added Tax Act, 2003. Clause 7(i) (b) of the RIPS-2003 inter alia provides that in case of investment made in the Modernization/Expansion, the amount of Capital Investment Subsidy shall be subject to a maximum of fifty percent of the amount of the Central Sales Tax and VAT payable or deposited by the unit on its additional capacity, so created over and above the installed capacity before Expansion/Modernization. Undeniably, the cement package was inserted into the RIPS-2003 as sub-clauses (vi) and (vii) vide notification dated 05.12.2005 which empowered the SLSC to grant tax incentive upto 75% to the entrepreneurs on fulfillment of the conditions contained therein, but these two sub-clauses were soon thereafter deleted on 28.04.2006. The SLSC was therefore left with no authority whatsoever to decide in its meeting dated 17.03.2011 to grant 75% tax subsidy to the petitioner-company. Thus clearly, it is basically decision of the SLSC which has been revised by the Principal Secretary, Finance Department on behalf of the State Government and not the decision of the BIDI. In case of ambiguity in charging provisions, the benefit must necessarily go in favour of assessee, but the same is not true for an exemption notification or exemption clause wherein the benefit of ambiguity must be strictly interpreted in favour of the Revenue/State. Furthermore, the burden of proving applicability of exemption would be on the assessee to show that his case comes squarely within the parameters of the exemption notification or exemption clause - In the present matter, case of the petitioners has not even been considered by the BIDI which merely relegated it to SLSC, as such the provisions of the RIPS-2003 are to be strictly adhered to. Unlike the exemption schemes where the assessee is not collecting the taxes from the customer/purchaser, here in the present case of subsidy, the tax is collected from the customers/purchasers and after depositing the same with the department, the amount to the extent of 50% or 75%, as per the entitlement certificate, is refunded to the assessee. The petitioner-company was very much aware about Clause 13 of the RIPS-2003 while submitting the application and availing the benefits. Therefore, the petitioner-company will be deemed to have waived all objections with regard to any clauses of the RIPS-2003. The RIPS-2003 is a composite scheme whereunder the benefits are conferred conditionally and therefore the argument of unreasonableness and arbitrariness is wholly misconceived. The argument that exercise of power of revision within five years after the expiry of seven years during which benefit was availed by the petitioner-company, makes the said provision as unreasonable, arbitrary, oppressive and violative of fundamental rights of the petitioners, has no merit. Petition dismissed.
Issues Involved:
1. Challenge to the order dated 12.03.2018 passed by the Additional Chief Secretary, Finance Department, Government of Rajasthan. 2. Constitutional validity of Clause 13 of the Rajasthan Invest Promotion Scheme-2013 (RIPS-2003). 3. Entitlement to investment subsidy of 75% as per the State Level Screening Committee (SLSC) decisions dated 17.03.2011 and 17.10.2011. 4. Legality of the show cause notice and subsequent revisional order demanding repayment of subsidy. Detailed Analysis: 1. Challenge to the Order Dated 12.03.2018: The petitioners challenged the order dated 12.03.2018, which revised the investment subsidy entitlement from 75% to 50%. The court examined the original entitlement certificates dated 29.04.2011 and 24.11.2011, which were issued based on SLSC meetings. The court found that the SLSC's decision to grant 75% subsidy was based on an incorrect interpretation of the BIDI's order dated 01.04.2006, which merely stated that the recently announced cement package and RIPS-2003 would apply to the company. The court concluded that the SLSC did not have the authority to grant a 75% subsidy after the relevant clauses (vi) and (vii) were deleted on 28.04.2006. 2. Constitutional Validity of Clause 13 of RIPS-2003: The petitioners argued that Clause 13 of RIPS-2003 was arbitrary, unconstitutional, and violative of Articles 14, 19(1)(g), and 265 of the Constitution of India. The court upheld the validity of Clause 13, stating that it provided the State Government with the power to revise erroneous orders prejudicial to the state's revenue. The court emphasized that the petitioners were aware of this clause when they applied for and availed the benefits, and thus, they waived any objections to it. The court found no violation of fundamental rights or any provision of the Constitution. 3. Entitlement to Investment Subsidy of 75%: The court analyzed the provisions of Clause 7 of RIPS-2003, which allowed a maximum subsidy of 50%, with the possibility of increasing it to 75% by the BIDI for investments exceeding ?200 crores. The court noted that the BIDI did not specifically grant a 75% subsidy but only stated that the cement package and RIPS-2003 would apply. The SLSC's decision to grant 75% subsidy was based on an incorrect interpretation of the BIDI's order. The court held that the SLSC could not grant more than 50% subsidy without a specific direction from the BIDI, which was disbanded in 2009. 4. Legality of the Show Cause Notice and Subsequent Revisional Order: The petitioners contended that the revisional order was based on grounds not mentioned in the show cause notice. The court rejected this argument, stating that the notice clearly mentioned the lack of a specific order from the BIDI granting 75% subsidy. The court also dismissed the argument that the revisional order was retrospective, as the benefits already granted were not taken away, but the differential amount was demanded back. The court found that the revisional order was within the period specified in Clause 13(b) of RIPS-2003 and was not arbitrary or unreasonable. Conclusion: The court dismissed the writ petition, upholding the revisional order dated 12.03.2018, which revised the investment subsidy entitlement from 75% to 50%. The court also upheld the constitutional validity of Clause 13 of RIPS-2003, finding no violation of fundamental rights or any provision of the Constitution. The court concluded that the SLSC's decision to grant 75% subsidy was based on an erroneous interpretation of the BIDI's order, and the revisional order demanding repayment of the differential amount was legal and justified.
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