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TMI Blog2013 (4) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Taxes, Nazibabad issued a notice dated 3.5.2008 to the petitioner under Section 10-B of the Act and revised the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, to which the petitioner has submitted his reply. Thereafter, an order dated 29.5.2008 was passed by the Joint Commissioner (Executive), Commercial Taxes, excluding the amount of additional fixed capital investment as included by the Deputy Commissioner (Assessment), Trade Tax vide order dated 30.6.2004 to the eligibility certificate. Being aggrieved by the order dated 29.5.2008, the petitioner approached this Court at Allahabad by filing Civil Misc. Writ Petition No. 1265 of 2008, in which, a Division Bench of this Court at Allahabad, vide ad interim order dated 4.7.2008, stayed the order dated 29.5.2008. Counter affidavit was filed on behalf of the State in the above writ petition and the petitioner withdrew the writ petition on 13.11.2009. The petitioner, thereafter, preferred an Appeal, bearing No. 002/2009 before the Trade Tax Tribunal, Moradabad against the order dated 29.5.2008, without disclosing about filing and the pendency of writ petition No. 1265 of 2008. Thereafter, the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India, the petitioner challenges the notice dated 21.11.2008 issued by the Commissioner, Commercial Tax, U.P., Lucknow, under Section 4-A (3) of the U.P. Trade Tax Act, 1948 [hereinafter referred to as the Act ]. Further it has been prayed that the Commissioner, Commercial Taxes, U.P., Lucknow be directed to decide the application dated 20.8.2008 filed by the petitioner under Section 42 of the U.P. Value Added Tax and issue Certificate of Entitlement due to the petitioner. Brief facts, giving rise to the instant writ petition, are that petitioner, namely, M/s Hindustan Coca-cola Beverages Private Limited, is a Private Limited Company registered under Indian Companies Act and is a Dealer within the U.P. Trade Tax (now U.P. Value Added Tax) as well as under Central Sales Tax Act. In order to attract industrial investment within the State of U.P., notifications were issued from time to time under Section 4 (A) of the Act for grant of exemption from payment of Tax. In the year 1995, notification Nos. 780 and 781 dated 31.3.1995 was issued for granting exemption from payment of sales tax to industrial units in respect of fixed capital investment made by them till the commenceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - but subsequently, as the petitioner had invested ₹ 1,02,08,99,877/- upto 26.4.1999, he submitted a revised application on 27.3.2000. According to the petitioner, his established unit at Dasna started production on 19.2.1999 and it made the first sale on 24.3.1999 from the unit established in pursuance of the incentive notification of the State Government and as such, the petitioner submitted a revised application for grant of Eligibility Certificate under Section 4-A of the U.P. Trade Tax Act declaring the fixed capital investment of ₹ 1,02,08,99,877 till 26.4.1999. The original application as well as revised application were processed. During the pendency of both the above applications, State Government issued another two notifications i.e. Notification Nos. 1340 dated 1.7.1999 and 1341 dated 29.9.1999. By the notification dated 1.7.1999, the State Government brought the units manufacturing Cold drinks in the negative list mentioned in the notification Nos. 780 and 781 dated 31.3.1995, whereas vide notification No. 1341 dated 29.9.1999, the State Government by amending the earlier notification Nos. 640 and 641, withdrew the benefit of exemption granted by it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted to the Assessing Authority the details of the additional fixed capital investment made during the assessment year; every year, the cumulative additional fixed capital investment made after 19.2.1999, till the end of each assessment year as contemplated in para 3 (i) (a) (b) of the notification dated 21.2.1997. After the end of five years, the Deputy Commissioner (Assessment) Trade Tax, Nazibabad, Bijnore, vide order dated 30.6.2004, included an amount of ₹ 50,87,89,611.00/- as additional fixed capital investment made by the petitioner and provided tax exemption/rebate amounting to ₹ 76,31,84,417.00 to the petitioner. On 3.5.2008, the Joint Commissioner (Executive), Commercial Taxes, Nazibabad, Bijnore issued a notice to the petitioner under Section 10-B of the U.P. Trade Tax Act, revising the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, Nazibabad, Bijnore. In response to the said notice, the petitioner submitted his reply on 3.5.2008. The Joint Commissioner (Executive), Commercial Taxes, Nazibabad, Bijnore, after considering the matter, has passed an order dated 29.5.2008, excluding the amount of additional fixed capital in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 42 of the U.P. Value Added Tax Act, the Commissioner, Commercial Taxes on 21.11.2008, initiated the impugned proceedings under Section 4 (A) (3), requiring the petitioner to show cause as to why the entire eligibility certificate granted earlier by the Divisional Level Committee to the petitioner be not cancelled on two grounds viz. (i) failure of Divisional Level Committee to consider the effect of the notification denying the benefit of exemption to Cold Drink units at the time it granted the Eligibility Certificate to the petitioner; (ii) the order dated 29.5.2008 passed by the Joint Commissioner, Commercial Taxes, Bijnore excluding the amount of additional fixed capital investment from the Eligibility Certificate granted to the petitioner. Hence the instant writ petition. Sri Bharat Ji Agarwal, Senior Advocate, appearing on behalf of the petitioner, while assailing the impugned notice dated 21.11.2008, has vehemently contended that out of the above two grounds mentioned in the impugned notice, the ground about the order under Section 10-B dated 29.5.2008 has ceased to exist in view of the order passed by the Trade Tax Tribunal, Moradabad dated 21.8.2009 setting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Phase-I investment and investment in second phase is continued to meet the market demand to ensure commercial viability of entire fixed capital investment. In such cases, usually the revenue coming from investment made in Phase-I of the project is redeployed for making investment in Phase-II of the project. The entire project viability is integrally connected to the successful investment in all the phases. Though the fixed capital investment is conceived at the beginning but making investment in phases in a staggered matter is a business reality, which was very well recognized by the notification Nos. 640 and 641 dated 21.2.1997. In the instant case, the subsequent investment of approximately ₹ 51 Crore made by the petitioner is not to be viewed in isolation from the initial investment made by the petitioner in the unit but has to be taken as integral part of the decision taken earlier to invest in the State of U.P. and is squarely covered by the provisions of para 3(a) of the notification dated 21.2.1997. Elaborating his submission, Sri Agarwal has submitted that if the matter is considered in proper perspective, notifications dated 1.7.199 and 29.9.1999 are restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal Papers, Sikandarabad Versus State of U.P. and others [2008 UPTC 21; Dwarikesh Sugar Industries Ltd. Vs. State of U.P. and another [2009 NTN (Vol.40) 90]; and United Bank of India Vs. Satyawati Tandon and others reported in 2010 (8) SCC 110. As regard to the other pleas raised by the petitioner, Sri Srivastava has contended that Notification dated 21.2.1997 contained in Annexure No. 1 to the writ petition has provided certain facility for exemption or reduction in the rate of tax in additions to the conditions referred in Section 4-A of the U.P. Trade Tax Act. Condition No.3 (a) of the said notification dated 21.2.1997 provides that the Unit will have a fixed capital investment or Rupees Fifty Crore or more as the new unit or making an additional fixed capital investment of Rupees Fifty Crore or more in expansion, modernization, diversification or backward integration. The fixed capital investment which is made during the period of five years commencing from the first day of such investment in the case of expansion, modernization, diversification or backward integration, and from the date of starting production in the case of new units will be included in fixed capital invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case, the petitioner has relied upon the Notification No. 1340/1341 dated 1.7.1999, which are not related in the present case. More so, the aforesaid Notification Nos. 1340/1341 dated 1.7.1999 do not refer to the Notification Nos. 640 and 641 dated 21.2.1997, however, those refer to the Notification Nos. 31.3.1995, as amended from time to time, and in the said notifications, in Annexure-II, after Entry 13 the Entry 14 have been inserted. In the instant matter, the petitioner was asking exemption in view of the Notification Nos. 640 and 641 dated 21.2.1997 during the tenure of consideration of the matter, the Notification Nos. 2008 and 2009 dated 29.9.1999 were issued in partial modification of aforesaid Notification Nos. 640 and 641 dated 21.2.1997. Sri Srivastava has further contended that after the end of five years, the Deputy Commissioner (Assessment) Trade Tax, Nazibabad vide order dated 30.6.2004 included an amount of ₹ 50,87,89,611.00 as additional fixed capital investment made by the petitioner, and provided tax exemption/rebate amounting to ₹ 76,31,84,417.00 to the petitioner. It is submitted that said tax exemption/rebate amounting to ₹ 76,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition No. 1265 of 2008 after filing of the counter affidavit filed the aforesaid appeal No. 002/2009 before the Trade Tax Tribunal, Mordabad against the order dated 29.5.2008 passed by the Joint Commissioner (Executive), Commercial Taxes, Nazibabad, Bijnore under Section 10-B of the Act and after obtaining the order dated 21.8.2009 from the Tribunal through which the Tribunal partly set-aside the order dated 29.5.2008 passed by the Joint Commissioner under Section 10-B of the Act, the petitioner withdrew the writ petition No. 1265 of 2008 thereby the petitioner abused the process of law. Sri Srivastava has further submitted that neither Section 14-A of the Act nor Rule 25 of the Act contemplate the delegation of power to the Assessing Authority, therefore, neither the Divisional Level Committee could have directed the assessing authority to include the additional fixed capital investment between 24.3.1999 to 18.2.2004 in the eligibility certificate nor the assessing authority i.e. Deputy Commissioner (Assessment), Commercial Taxes, Nazibabad, Bijnore could have granted exemption. Under Rule 25 of the U.P. Trade Tax Rules, for claiming the benefits of exemption in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted by the State Legislature and answered the same in the negative by making the following observations : 11. Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the Prescribed Authority under sub-section (1) of Section 23 of the Act. If the petitioners are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub-section (3) of Section 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court under Section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Wate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other; (2010) 4 SCC 772, the Apex Court was dealing with the issue whether the alternative statutory remedy available under the Foreign Exchange Management Act, 1999 can be bypassed and jurisdiction under Article 226 of the Constitution could be invoked. After examining the scheme of the Act, the Court observed: 31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction. 32. No reason could be assigned by the appellant's counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority/Deputy Commissioner (Assessment) Trade Tax, Nazibababd was/is not the competent authority to issue the eligibility certificate under the provisions of 4-A of the U.P. Trade Tax Act, 1948 and further the said authority has no power to amend the eligibility certificate but even then, the Divisional Level Committee had issued the eligibility certificate to the petitioner's unit on 22.1.2001 under Section 4-a of the U.P. Trade Tax Act in utter violation of the Notification No. 2008/2009 dated 29.9.1999. There is no dispute in the fact that on the date of grant of eligibility certificate by the Divisional Level Committee, the Cold Drinks were already placed in the negative list and this very vital fact was not taken into consideration. On coming to the notice of the said facts, the Joint Commissioner (Executive), Commercial Taxes, Nazibabad issued a notice dated 3.5.2008 to the petitioner under Section 10-B of the Act and revised the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, to which the petitioner has submitted his reply. Thereafter, an order dated 29.5.2008 was passed by the Joint Commissioner (Executive), Commercial Taxes, excluding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not entitled to the benefits of exemptions. After hearing the parties' counsel, judgment was reserved. Prior to pronouncement of the order/opinion, the petitioner has preferred an application for stay (C.M.Application No. 107227 of 2012), inter alia on the grounds that the question involved in the instant writ petition is also related to the proceedings to the subsequent Assessment Year and the matter is pending before the Full Bench of Commercial Tax Tribunal, U.P. Accordingly, in order to meet the ends of justice and equity, this Court had stayed further proceedings in Second Appeal Nos. 11 of 2011 and 3 of 2010, till delivery of the judgment. Thus, from the facts averred above, it is crystal clear that the petitioner has not disclosed the above material and full facts while filing the instant writ petition, though the same was already in the knowledge of the petitioner and has approached this Court with unclean hands. Therefore, we feel no hesitation to mention that the instant writ petition has been filed by the petitioner by suppressing and concealing the above vital facts, which go to the core of the matter involve. In Dalip Singh Versus State of Uttar Pradesh a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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