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TMI Blog1995 (2) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... hat one of the incentives given under the said G.Os. to the small-scale industries is "sales tax holiday" for a period of five years. It is their contention that under the sales tax holiday incentive they are entitled to collect the sales tax exigible on the goods produced and sold by them during that period of five years up to a maximum limit of Rs. 35,00,000. On their application, they were issued temporary eligibility certificates "for availment of sales tax exemption". They are aggrieved by the clause in those certificates issued to them which imposes the following condition for availing tentative eligibility: "1. The SSI unit is not entitled to collect sales tax from the consumers and further they would be liable to remit the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking into account the nature of industries would be issued separately. 2. Fixed capital investment is the investment made on land, buildings and machinery of the new industrial unit. Small-scale industries-Sales tax holiday All districts in the State 5 years sales tax holiday subject to a ceiling of Rs. 35 lakhs on sales tax during the entire holiday period." From this it is clear that in the case of medium and large scale industries, the incentive is "sales tax deferment" and under the scheme applicable to the said industries up to a maximum period of 10 years, the said industries are entitled to collect sales tax, but they need not pay sales tax collected immediately to the State. This scheme provides for deferment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "sales tax exemption". The form for temporary eligibility certificate fixing limits for availing deferment of sales tax/sales tax exemption given in the said manual also does not use the expression "sales tax holiday". The learned counsel for the petitioners draws our attention to the pro forma application form prescribed in that manual "for claiming incentives under liberalised State Incentives Scheme vide G.O. Ms. No. 498, Industries and Commerce (I.A.) Department dated October 16, 1989". Item No. 21 of the said application provides, inter alia, as follows: "21(a).................... (b) I/we hereby assure that the incentives under the scheme if sanctioned to my/our unit, will be utilised for the development of my/our industry only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Taxable turnover for the month of........90. Rs............ (b) Assessable tax sought to be exempted. Rs............" What is meant by "sales tax holiday" is "sales tax exemption" is placed beyond controversy by G.O. Ms. No. 117, Industries and Commerce (IFR) Department dated March 17, 1993, which extended the general incentives scheme in G.O. Ms. No. 498 dated October 16, 1989 and also the special scheme of State incentives for Scheduled Castes and Scheduled Tribes entrepreneurs till the end of 8th Plan period, i.e., up to March 31, 1997. Under the heading "Deferment/ Tax holiday on sales tax", this G.O. describes the sales tax incentive given to tiny and small-scale industries as sales tax (holiday) exemption and places t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised. Sub-sections (1) and (2) of section 30-B of that Act provides that "no dealer shall collect any sum by way of tax, in respect of sale or purchase of any goods, on which tax is not payable under this Act" and that "no dealer, shall collect any amount by way of tax in excess of the amount of tax payable by him under the provisions of this Act ". Therefore, the petitioners cannot collect sales tax that has been exempted. The petitioners rely on sales tax holiday benefits allowed to some third parties, namely, (i) Srinivasa Conductors, (ii) Kranti Conductors, and (iii) Rajam Aluminium Metal Products Pvt. Ltd. and on the final eligibility certificate dated August 4, 1993, issued to M/s. Sri Srinivasa Conductors-the petitioners have not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby having the benefit of interest-free credit for a number of years. According to the learned counsel for the petitioners, the real incentive that is intended under the G.Os. is cash subsidy of the sales tax amount which they could collect during the tax holiday period without any condition for payment, thus placing them in a better position than the large scale and medium scale industries. According to the learned counsel, "tax holiday" should and can mean only that. We are unable to agree with this submission. There is no doubt that if they are allowed to collect sales tax and appropriate the same without paying it to the State, they would be much better off, but we do not understand the G.Os. as giving them that gift. The G.Os. have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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