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TMI Blog2003 (3) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... t Free Sales-tax deferral scheme (for short IFST Deferral Scheme) framed by the State Government of Tamilnadu. Both parties were heard with regard to the issue raised by the assessee and its legal implications extensively. 2. The admitted facts of the case that are necessary for adjudication of the appeal are that regular assessments for both the assessment years were finalised by issuing orders under section 143(3). But later on it was found by the Assessing Officer that the claim of the assessee with regard to sales-tax payable to the State Government of Tamilnadu under IFST Deferral Scheme was erroneously allowed as it was found that the claim made by the assessee is over and above the quantum mentioned in the relevant notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s certificate shows that the assessee was issued an Eligibility Certificate under the Sales Tax Deferral Scheme. In paragraph 3 of the said certificate it was mentioned that the assessee will be the eligible for deferral of sales tax not exceeding Rs. 56.21 lakhs interest free for nine years from the month in which the assessee s unit commenced its commercial production i.e., from 1-5-1994 to 30‑4‑2003. The learned representative of the assessee has also filed eligibility certificate issued by the Government of Tamilnadu dated 26‑3‑1992. In the said certificate in paragraph 3 it was made clear that the assessee is eligible for deferral of sales tax not exceeding Rs. 82,72,145 interest free for nine years from the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the deferral scheme may be allowed as a deduction in the assessment for the previous year in which such conversion has been permitted by or under the Government orders. The interpretation made by the department for this fact is that the assessee is not entitled to claim the exemption unless this is paid by the assessee in the previous year in which such conversion has been permitted by it. This is a technical flaw involved in the said circular as it was, issued and its effect is nullifying the benefit that was made, available to the assessee under the scheme. Actually the intention of the State Government is to deem the payment of sales-tax by the assessee on the due date concerned along with return filed monthly and accordingly assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the present case. Therefore the opinion of the departmental authorities is to be upheld as it is in accordance with the Circular issued by the Board ( supra ). In support of his contentions the learned Departmental Representative has relied on the obiter dicta made by the Judicature of Madras High Court in the case of Kalpana Lamps Components Ltd. v. Dy. CIT [2002] 125 Taxman 1045 . He also relied on another decision of the High Court of Gujarat rendered in the case of CIT v. Bhagwati Autocast Ltd. [2002] 124 Taxman 452 . On the other hand the learned representative of the assessee has relied on the decision of the M.P. High Court rendered in the case of CIT v. K.N. Oil Industries [1997] 226 ITR 547 1 . It was held by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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