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TMI Blog1999 (11) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... st free Sales Tax Deferral Benefit (for short, "IFST"). Under the scheme, after getting the eligibility certificate an agreement has to be entered into with the Sales Tax Department for availing of the benefit of deferral on stated conditions. The eligibility certificate was issued on February 4, 1998. Some of the essential terms of the eligibility certificate could be noticed for the purpose of these two petitions. (1) The petitioner was eligible for deferral of sales tax up to a limit of Rs. 237.54 crores, interest-free for a period of twelve years. (2) The benefit was available for the period of commercial production, i.e., from May 1, 1997 to April 30, 2009. (3) The certificate is subject to the various Government orders, including G.O. Ms. No. 119/C.T. & R.E. Department dated April 13, 1994. (4) The benefit of deferral was available only on the increased volume of production/sale. 2.. Till reaching the volume of production/sale as specified the company would continue to pay tax and any liability in excess of the production/sale alone will be eligible for deferment. The highest production was fixed on the basis of the highest production during the preceding year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited v. State Industries Promotion Corporation of Tamil Nadu Ltd.) without fixing any base limits. 4.. The prayer in O.P. No. 1348 of 1999 is to quash the proceedings of the third respondent dated September 27, 1999 and September 29, 1999 and forbear the third and fourth respondent from taking any consequential action and enable the petitioner to avail of the deferment of sales tax by paying the sales tax up to the base value of Rs. 2,373.74 lakhs in 12 monthly instalments of Rs. 197.81 lakhs per month. 5.. We have heard Mr. Mohan Parasaran, the learned counsel for the petitioner who also emphasised the fact that the third respondent is demanding a revised agreement relating to the date on which the company's right to get the deferral benefit arises, namely, whether on reaching the volume of production or on reaching the base sale value. According to the learned counsel, this is totally illegal and neither the Government orders nor the eligibility certificate warrant the interpretation placed by the third respondent that the benefit accrues only after the industry reaches both the base sale volume and base production volume as per the eligibility certificate and agreement. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking order or that it is illegal and contrary to the view taken by the Madras High Court in [1999] 112 STC 30 (Thiru Arooran Sugars Limited v. State Industries Promotion Corporation of Tamil Nadu Ltd.). Such Government orders have to be looked at from the point of view of the materials gathered by them before passing the order and it cannot be straightaway characterised as a non-speaking order. Further, the request of the petitioner in their letter dated November 16, 1998 is so obviously untenable that we are not inclined to consider the prayer in O.P. No. 1347 of 1999. Every Government Order is only prospective and it is not possible for the petitioner at this stage to turn around and claim that they are entitled to the deferral benefit without fixation of any base volume of production/sale. Further, this issue has also been discussed by the third respondent in his proceedings dated September 27, 1999. We have therefore no hesitation in dismissing the O.P. No. 1347 of 1999. 8.. Coming now to the prayer in O.P. No. 1348 of 1999, the main dispute is on the question of the date on which the right to get deferral, commences in any assessment year, namely, whether on the date of rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be reached before the petitioner could claim deferral of sales tax. In the alternative it means that if the base sale volume had been reached earlier, but the base production volume had not been reached, the petitioner will not be entitled to get the deferral facility. It is only after the base production volume is reached that the right of deferral accrues. Vice versa if the base production volume had been reached later, it is only after the base sale volume is reached that the petitioner will be entitled to get the deferral facility. This in effect means whichever condition is reached later then alone the petitioner gets the right to defer the payment of sales tax. This is what is sought to be conveyed in the proceedings dated September 27, 1999 and September 29, 1999 which are impugned in this original petition. Therefore, when the third respondent in his proceedings dated September 29, 1999 asks the petitioner-company to enter into a revised deed of agreement, it only relates to this issue which is already apparent on the basis of G.O. Ms. No. 119/dated April 13, 1994. In other words, even if the petitioner does not enter into a revised agreement, the legal position is very c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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