2021 (9) TMI 710 - HC - VAT and Sales Tax

Incentives were provided to the new industries established in the State of Assam on or after 01.10.2008 - benefit for the Industrial Policy of Assam 2008 - manufacture of fireclays - process amounting to manufacture or not - HELD THAT - The Additional Chief Secretary to the Government of Assam in the Industries and Commerce Department had perused the order dated 09.12.2016 passed in WP(C)No.7228/2015, the representation of the petitioner dated 03.12.2013 was also perused. Apart from the above, the letter dated 06.10.2012 of the Commissioner of Taxes, Assam as well as another letter dated 27.10.2014 also of the Commissioner of Taxes Assam as well as the minutes of the State Level Committee meeting dated 05.11.2015 were perused by the Additional Chief Secretary to the Government of Assam in the Industries and Commerce Department while passing the order dated 08.03.2017. By referring to the aforesaid materials, and without stating as to what the materials contain, the Additional Chief Secretary to the Government of Assam in the Industries and Commerce Department arrives at his conclusion that he agrees with the views of the Taxation Department and accordingly concluded that fireclays do not amount to a manufacture. The manner in which the order dated 08.03.2017 was passed by the Additional Chief Secretary to the Government of Assam in the Industries and Commerce Department, the requirement of the earlier order dated 09.12.2016 in WP(C)No.7228/2015 to pass a speaking order in accordance with law had not been duly complied with. The requirement of passing the speaking order be done within a period of one month from the date of receipt of a certified copy of this order - Petition disposed off.

Summary

Issues:
1. Interpretation of the Assam Value Added Tax Act 2003 and the Assam Industrial Policy of 2008.
2. Eligibility of the petitioner for sales tax exemptions under the Policy of 2008.
3. Compliance with the court's order for a speaking order in accordance with law.
4. Evaluation of the manufacturing process of fireclay by the authorities.
5. Corrective actions required for the order dated 08.03.2017.

Analysis:

1. The petitioner, engaged in fireclay manufacturing, sought benefits under the Assam Industrial Policy of 2008, providing sales tax exemptions for industries involved in manufacturing processes. The question arose whether the process of manufacturing fireclay aligns with the legal definition of manufacturing under the Policy of 2008 to warrant tax exemptions.

2. The petitioner applied for an eligibility certificate under the Policy of 2008, but the authorities did not respond adequately. The court directed a speaking order to determine if the fireclay manufacturing process qualifies as manufacturing under the law. The subsequent order dated 08.03.2017 concluded that fireclays do not amount to a manufacture without a detailed analysis, leading to a challenge by the petitioner.

3. The court found the order lacking in compliance with the requirement for a speaking order in accordance with law, emphasizing the need for a thorough examination of the manufacturing process. The Additional Chief Secretary was directed to reassess the matter, ensuring a proper evaluation and adherence to legal standards.

4. The court set aside the order dated 08.03.2017 and remanded the case for a fresh consideration, instructing the authorities to review the manufacturing process of fireclay diligently. The Additional Chief Secretary was tasked with examining the procedure and determining its conformity with recognized manufacturing standards.

5. The Additional Chief Secretary was directed to refer to relevant legal provisions, seek advice from relevant departments, and ensure a comprehensive review of the petitioner's case. The court mandated a prompt decision within one month, with any entitled benefits to be granted accordingly, underscoring the importance of a fair and lawful assessment in line with the Assam Industrial Policy of 2008.