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TMI Blog2005 (3) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... KST Act ) and Central Sales Tax Act, 1956 (for short, the CST Act ) and is borne on the file of the Deputy Commissioner of Commercial Taxes (Assessments), Udupi. 3.. The State Government has sanctioned revised package of incentives and concessions for new industrial investment in the State by Government Order No. CI 138/SPC/90(P) dated September 27, 1990 with effect from October 1, 1990. The scheme was made with a view to achieve accelerated industrial development in all sectors, namely, tiny, small, medium and large-scale industries. The new industrial policy while highlighting the strategy and approach for development of industries in future years provides the package of incentives and concessions for industrial development, with a vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its commercial production is old/used/second-hand, with the exception of imported second-hand machinery. 5.. The petitioner has set up its new small-scale industry at Sy. No. 321/3C of Kukkundoor, Karkala for the manufacture of cashew kernels, cashew shell liquid and tin containers. It made an application for grant of certificate of exemption from payment of tax to second respondent in terms of the above Government Orders. The second respondent issued a certificate of exemption dated April 10, 1996 (annexure A) granting 100 per cent tax exemption for a period of five years from May 4, 1995, i.e., the date of going into production. 6.. It is the case of the petitioner that for the assessment year 1996-97, it had claimed 100 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P. No. 8198 of 2002. This Court by its order dated September 4, 2003 quashed the amended certificate referred above with a direction to the authority concerned to consider the material placed by it, hear the petitioner and pass appropriate orders. Thereafter, the petitioner has filed a detailed reply on October 3, 2003 stating therein, amongst others, that the period of exemption has expired long back, i.e., on May 4, 2000 and the exemption certificate issued on April 10, 1996 cannot be modified retrospectively. However, the third respondent by its order dated October 29, 2003, while rejecting the claim of the petitioner has held that sales tax exemption is limited to investments made on fixed assets. Feeling aggrieved by the said order, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les tax has always been for encouraging capital investments and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industries in the State particularly in backward areas. The apex Court in the case of Commissioner of Sales Tax v. Industrial Coal Enterprises [1999] 114 STC 365 has held as follows: A provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision. The object of granting exemption from payment of sales tax has always been for encouraging capital in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cancellation of the certificate with retrospective effect was not permissible. 12.. In Commissioner, Commercial Taxes, Rajasthan v. Kandhari Kandhari Private Limited [1999] 113 STC 361 (RTT), it has been held that even if a unit was ineligible for tax exemption, if a certificate of exemption was granted by the competent authority and the dealer was not at fault for issue of the certificate of exemption and the benefits had been fully availed of, the certificate of exemption cannot be withdrawn with retrospective effect. 13.. In Birla Jute and Industries Ltd. v. State of M.P. [2000] 119 STC 14, the honourable Supreme Court has held that the District Industries Centre was not justified in reviewing the certificate of exemption long ..... X X X X Extracts X X X X X X X X Extracts X X X X
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