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2022 (5) TMI 1193 - HC - VAT and Sales TaxJurisdiction - whether D.I.C. has authority in law to issue the eligibility certificate for expansion and or modernization with retrospective effect - HELD THAT - The period in question is the same i.e. 1994- 95 but the gross turnover (GTO) is noted in the said order of suo moto revision order dated 6th December, 2006 is different. In the order dated 30th May, 2002 of the STO, Dhenkanal Circle the GTO was noted as Rs.11,25,000/- which had escaped turnover and the Petitioner's exemption was disallowed insofar As it pertained to the excess production. On the other hand, the order dated 6th December, 2006 of the CTO appears to deal with supplies made to the Railways - it is plain that the Assessee claimed exemption on the strength of an earlier DIC certificate which did not authorise production beyond 2,70,187 cft. There is no power in the DIC to issue a certificate granting exemption retrospectively from an earlier date. Therefore, the certificate dated 2nd September, 1997 could not have possibly been used for calming exemption from payment of sales tax on the excess production year in the year in question i.e. 1994- 95. The Court is not satisfied that the concurrent findings of the STO, the ACST and the Tribunal on this aspect suffer from any legal infirmity that warrants interference. The question framed by this Court is answered in the affirmative i.e. in favour of the Department and against Assessee by holding that the Tribunal in the impugned order was justified in holding that the DIC had no authority in law to issue the eligibility certificate for exemption for expansion on modernisation with retrospective effect. The Revision Petition is dismissed.
Issues Involved:
Validity of eligibility certificate for expansion and modernization with retrospective effect. Analysis: 1. The petition arises from an order passed by the Odisha Sales Tax Tribunal, affirming the dismissal of the Assessee's Sales Tax Appeal but deleting the penalty imposed under Section 12(8) of the Orissa Sales Tax Act, 1947. 2. The main question of law framed by the Court for consideration was whether the DIC had the authority to issue the eligibility certificate for expansion and modernization with retrospective effect. 3. The Petitioner, a small-scale industrial unit, obtained a certificate from the DIC in 1992 for manufacturing stone chips and metal. Exemption from sales tax was availed for 7 years starting from 1991. 4. The Petitioner applied for an enhancement of manufacturing capacity in 1997, which was granted by the DIC. However, during 1994-95, excess production was detected, leading to a tax demand and penalty. 5. The Assessee appealed the assessment order, claiming that the DIC certificate authorized the enhanced capacity. The ACST noted that the certificate was issued retrospectively, which was not authorized by law. 6. The Tribunal affirmed the ACST's decision, leading to the present petition before the High Court. 7. The Court heard arguments from both parties. The Petitioner argued that the DIC certificate should be valid, regardless of the retrospective issuance. 8. However, the Court found that the DIC exceeded its authority by granting exemption retrospectively. The Assessee's claim for exemption based on the retrospective certificate was rejected. 9. The Court upheld the concurrent findings of the lower authorities, dismissing the revision petition in favor of the Department. 10. The Court concluded that the Tribunal was justified in holding that the DIC had no legal authority to issue the eligibility certificate for expansion or modernization with retrospective effect. 11. The revision petition was dismissed with no order as to costs.
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