2016 (8) TMI 716 - HC - VAT and Sales Tax

Issuance of eligibility certificate for availing the benefit of exemption from payment of tax - Extension of eligibility period Held that - The exemption certificate was issued in favour of the petitioner on 3.1.2001. At that stage, the petitioner did not raise any plea regarding extending the period of eligibility from the date of issuance of eligibility or exemption certificates, rather, the conduct of the petitioner shows that it was not interested in availing the benefits. As is evident from the fact that exemption certificate was issued in favour of the petitioner on 3.1.2001, but for the reasons best known to the petitioner, it started availing the benefit only from 1.4.2003, after a gap of more than two years. Though the issue regarding provisional eligibility and exemption certificates was sought to be raised, but the fact remains that the petitioner made no effort for issuance thereof. The case of M/s Godrej & Boyce Mfg. Co. Ltd. cannot be compared as for granting the benefit to that company, there is a provision made in the Rules. This court in exercise of extra-ordinary jurisdiction cannot direct the authorities to frame the Rules. - Writ petition dismissed.

Summary

Issues:
1. Extension of period of benefit for exemption from payment of sales tax.

Analysis:
1. The petitioner, a public limited company engaged in manufacturing, sought extension of the period of benefit for exemption from sales tax under the 1996 Policy and Punjab General Sales Tax Rules. The petitioner's capacity expansion was completed in 1998, and it started availing the benefit from 2003. The petitioner applied for an eligibility certificate in 1999, which was granted in 2000. Despite delays, the petitioner only started availing the benefit in 2003, leading to the expiration of the eligibility period in 2008.

2. The petitioner argued that the delay in issuing the eligibility certificate entitled them to an extension. However, the State contended that the petitioner's conduct showed a lack of interest in availing the benefit promptly. The State highlighted that the petitioner did not raise extension concerns earlier and delayed seeking remedies. The State emphasized the absence of provisions for extending the eligibility period under the Rules and pointed out the petitioner's failure to invoke provisional certificates.

3. The court noted the undisputed facts of the case, including the issuance of certificates and the petitioner's delayed benefit availing. The court highlighted the petitioner's belated representations and the rejection of extension requests due to clear Rules provisions. The court dismissed the petitioner's arguments regarding delays in certificate issuance and lack of provisions for extensions. The court differentiated the case from precedents like M/s Godrej & Boyce Mfg. Co. Ltd., where specific provisions allowed for extensions.

4. Ultimately, the court found no merit in the petitioner's claims and dismissed the petition, emphasizing the lack of grounds for extension based on the Rules and the petitioner's delayed actions in seeking remedies or invoking provisional certificates.