9911796707
TMI Blog1996 (10) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate dated May 26, 1990 whereby the firm was not required to pay sales tax for a period of 7 years from June 20, 1989 to June 19, 1996. The total amount of benefit under the said exemption certificate was fixed at Rs. 3,08,102. The petitioner-firm had to seek renewal of the exemption from year to year under the relevant rules. Rule 28-A was incorporated in the Haryana General Sales Tax Rules, 1975 (for short, the Rules ), in the year 1989. The said rule contained detailed provisions as to how a new industrial unit could avail of the benefit of deferment or the exemption for a fixed period under the Haryana General Sales Tax Act, 1973. Procedure had been laid down for first obtaining an eligibility certificate and then an exemption ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, the total notional tax liability was worked out at Rs. 4,48,890 as against total benefit allowed under the exemption certificate to the tune of Rs. 3,08,102 only. It was for this reason that the exemption certificate was not renewed for the 5th year. 4. The petitioner-firm went in appeal against the refusal of the renewal of the exemption certificate but the appeal was rejected by the Commissioner, vide order dated January 31, 1995, upholding the view taken by the Deputy Commissioner. 5. The petitioner has raised two-fold pleas in the present petition. First, the tax liability was rightly determined in the earlier years adopting the rate of tax at 4 per cent inasmuch as the petitioner-firm, being an exempted industrial unit, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of tax on the sales of finished products under the local sales tax law shall be computed at the maximum rates. The amount of tax under the Central Sales Tax Act, 1956, is to be calculated on the inter-State sales at such rate which is applicable to the sales made against the certificates in form C. Sub-clause (ii) of clause (n) makes it clear that the inter-State sales made by the industrial unit shall be treated to be such sales as if those sales were made against C forms. This sub-clause incorporates a presumption to the effect that the sales of finished products of the eligible industrial unit shall be assumed to be sales made against C forms. Such a presumption has been engrafted in sub-clause (ii) for the reasons that an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the earlier years simply on an assumption that the inter-State sales had been made by the petitioner-firm to unregistered dealers without obtaining C forms. As has been seen in the relevant rule, that rate of tax is to be adopted which is applicable to the sales made against C forms. Therefore, there was no justification to treat the sales as having been made to unregistered buyers/ dealers. If the petitioner-firm was not required to pay tax, it was then indeed not required to collect C forms from the purchasing dealers also. If that was so, the presumption raised by the Deputy Commissioner is found to be totally unjustified. If the petitioner-firm was not required to collect C forms, no presumption can be raised that the sales we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time, he may reject the application after giving the applicant an opportunity of being heard. 11.. The aforesaid rule empowers the Deputy Commissioner to reject an application for renewal of exemption of any of the four grounds. First, an application could be rejected if it was not in order or if the particulars were not correct and complete. Secondly, it could be rejected if the applicant was not a bona fide industrial unit. Thirdly, renewal can be refused if exemption has been misused. Fourthly, exemption can be refused if the industrial unit had not complied with any of the directions given to it by the Deputy Commissioner within the specified time. 12.. The petitioner-firm has not been charged with any of the violations as have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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