9911796707
TMI Blog2006 (7) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act read with rule 28A of the Haryana General Sales Tax Rules, 1975 (for short the Rules ) was filed on June 26, 1995. After due processing the exemption sought was granted with effect from May 5, 1995 for a period of nine yeas. Subsequently, notice was issued on March 28, 2002 asking the petitioner to show cause as to why eligibility certificate be not withdrawn on the ground of discontinuance of its business since April 13, 1999. The stand of the petitioner was that figures of production were being maintained for the period from April, 1999 to 2003 and 141 employees were engaged in manufacturing process and, therefore, there was no ground for withdrawal of eligibility certificate as the business of the petitioner was continuing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the eligibility certificate is liable to be withdrawn. The committee ordered to withdraw the eligibility certificate granted to the industrial unit. The petitioner preferred an appeal before the Sales Tax Tribunal which has been dismissed by the opinion of the majority of the members. The relevant discussions in the impugned order are: 13. As already discussed above in the present case up till July 14, 1998 the appellant was manufacturing bulk drugs as owner of those drugs and also sold the same, but after the said date when Ranbaxy company had obtained the patent in respect of such drugs the appellant started manufacturing the bulk drugs by way of job-work with the help of raw material supplied by the Ranbaxy Company and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th meeting held by the HLSC to consider this aspect and instead he (i.e., appellant) has been manufacturing bulk drugs after July 14, 1998 only by way of job-work for Ranbaxy Company, finding him no longer eligible for sales tax exemption his eligibility certificate was ordered to be withdrawn. It will not be out of place to mention here that the exemption certificate was never issued on the basis of eligibility certificate initially issued to the dealer. When the above order of the HLSC is viewed from the factual and legal position from the angle discussed above it is found that the finding of the HLSC in its impugned order that the industrial unit has contravened the provision of sub-rule (8)(a)(ii) of 28-A of the Rules having disconti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work there is no transfer of property in goods; and that amounts to production of such goods on job-works as discontinuation of the dealer's business for the purpose of rule 28A(9)(i) which reads as under: 'The exemption/entitlement certificate granted to an eligible industrial unit shall be liable to be cancelled by the Deputy Excise and Taxation Commissioner concerned in the following circumstances after affording an opportunity of being heard to the unit: (i) discontinuance of its business by the unit at any time for a period exceeding six months or closing down of its business during the period of exemption/deferment'. (From the opinion of D. R. Yadav) The main contention raised on behalf of the petitioner is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods manufactured by it. Admittedly, in the present case, the petitioner has not been making any intra-State or inter-State sales since April 13, 1999. The case of the petitioner is that the petitioner unit was manufacturing bulk drugs by way of job-work for Ranbaxy situated in the State of Punjab and since no sale were being made, there was no question of sales being made either local or inter-State. From the facts on record in the form of exemption certificate, it is evident that the unit of the petitioner, which came into production on May 5, 1995 and was entitled to exemption for a sum of Rs. 299.85 lakhs, availed of exemption of Rs. 34,67,035 merely up to June 30, 1995. In the next year up to June 30, 1996 a sum of Rs. 67,29,802 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Rules is to grant exemption from payment or deferment of payment of tax to an eligible industrial unit. That contingency would arise only in case the unit is carrying on its own business on which some tax liability is there. In case a unit is to carry out the business on someone else's behalf, no benefit accrues to such a unit under the Rules as no tax liability is there. In addition to this, sub-rule (11) of rule 28A puts certain conditions on the beneficiary industrial unit even after the exemption/deferment has already been availed of. The same being that the unit will continue its production for at least 5 years and not below the level of average production of the preceding five years after having availed of the benefit. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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