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2021 (3) TMI 486 - HC - VAT and Sales TaxIncentive scheme for industries and more particularly the IFST deferral scheme - Benefit of Notification G.O.Ms.No.500 Industries (MIG II) Department dated 14.5.1990 - Whether the Notification issued in G.O.Ms.No.119 Commercial Taxes and Religious Endowments Department dated 13.4.1994, which stipulated a benchmark for enjoying the benefit of IFST deferral scheme can be made applicable to the petitioner? HELD THAT - The industries, which were granted eligibility certificate in terms of G.O.Ms.No.500 dated 14.5.1990 cannot be imposed with the benchmark condition introduced for the first time in G.O.Ms.No.119 dated 13.4.1994. The Assessing Officer as well as the Tribunal appeared to have been guided by the rescheduled date of eligibility as mentioned in the eligibility certificate dated 31.1.1995, by which, the period was rescheduled from 01.12.1994 to 30.11.1999 - Admittedly, this period falls much after the Notification in G.O.Ms.No.119 dated 13.4.1994. What is interesting to note is that in G.O.Ms.No.119 dated 13.4.1994, a specific direction was issued to the State Government and the District Industries Centre to work out BPV and BSV and incorporate the same in the eligibility certificate at the time of issuance by the SIPCOT and the District Industries Centre. The wordings in paragraph 3(v) of the Government Order in G.O.Ms.No. 119 dated 13.4.1994 were that the BPV and the BSV would have to be worked out and incorporated in the eligibility certificates at the time of issue by the SIPCOT and the District Industries Centre. If such is the position and the date of eligibility certificate of the petitioner being 17.6.1993, G.O.Ms.No.119 dated 13.4.1994 could not have been applied to the petitioner. Therefore, even though the rescheduled period was from 01.12.1994 to 30.11.1999, the eligibility for the deferral scheme would date back to the date of the original eligibility certificate dated 17.6.1993, as in that certificate, conditions have been imposed and the reschedulement dated 31.1.1995 was only reschedulement of dates and nothing else - the respondent Department initially understood the position clearly and therefore, they did not amend the eligibility certificate by incorporating the BPV and the BSV in the eligibility certificate. This Court in the case of SULOCHANA COTTON SPINNING MILLS (P) LTD. VERSUS STATE OF TAMIL NADU AND OTHERS (AND OTHER CASES) 1994 (12) TMI 302 - MADHYA PRADESH HIGH COURT wherein the Hon'ble First Bench of this Court framed three questions for consideration, the first of which was with regard to scope and ambit of G.O.Ms.No.500 dated 14.5.1990 and the second question was as to what was the effect of another Government Order in G.O.Ms.No.92 dated 22.2.1991 on G.O.Ms.No.500 dated 14.5.1990, as G.O.Ms.No.92 dated 22.2.1991 brought in certain conditions. Thus, the respondent Department does not dispute the fact that the Inspecting Officer gave a clean chit to the petitioner and in no uncertain terms stated that the IFST deferral availed by the petitioner in 'A' unit was found to be in order and that no deviation or wrong availment was noticed. The Tribunal committed a serious error in not granting relief to the petitioner - Petition allowed.
Issues:
Challenge to assessment order regarding Interest Free Sales Tax (IFST) deferral loan and subsequent rejection of objections by Assessing Officer, Tribunal's dismissal of petitions seeking quashing of order demanding interest, Applicability of Notification G.O.Ms.No.119 dated 13.4.1994 to petitioner's case. Analysis: The petitioner, a registered dealer, challenged the assessment order by the Assessing Officer regarding the IFST deferral loan availed and repaid belatedly. Despite objections, the Assessing Officer confirmed the proposal, leading to a demand for interest under Section 24(3) of the Act. The petitioner approached the Tribunal seeking relief, but the petitions were dismissed, prompting the current writ petitions before the High Court. The central issue revolves around the applicability of Notification G.O.Ms.No.119 dated 13.4.1994 to the petitioner's case. The Government's scheme aimed to encourage industries by providing concessions, including deferral of sales tax for specified periods. The petitioner, having commenced production in 1991 and applied for eligibility, faced delays in receiving the eligibility certificate, leading to continued sales tax payments until 1993 when the certificate was finally issued. A critical aspect is the condition in the eligibility certificate regarding sales tax deferral, subject to specific terms related to production capacity and incremental tax liability. The petitioner sought rescheduling of the deferral period due to delays in obtaining the eligibility certificate. Despite a clean chit from an inspection report, the Assessing Officer issued a show cause notice alleging wrongful availing of the IFST deferral scheme. The High Court's analysis delves into legal precedents, notably a judgment highlighting the prospective application of G.O.Ms.No.119 dated 13.4.1994 and its benchmark conditions for eligibility. The Court emphasized that the petitioner, having received the eligibility certificate before the introduction of the benchmark condition, should not be bound by the subsequent regulation. The Court also referenced past decisions to support its interpretation of the legal framework governing such schemes. Ultimately, the High Court allowed the writ petitions, setting aside the Tribunal's order and quashing the demands made by the Assessing Officer. The Court found the Tribunal's failure to consider crucial findings and legal principles as a serious error, leading to the grant of relief to the petitioner. The judgment underscores the importance of aligning regulatory actions with the specific circumstances and timelines applicable to each case to ensure fair treatment under the law.
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