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TMI Blog2008 (7) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (3) of section 80 of the VAT Act, the rebate granted to the petitioners vide Government notification dated December 26, 2000 under section 5 of the Act shall be deemed to be continuing even after enforcement of the VAT Act till the date of publication of notification dated October 12, 2006.For the reasons and discussion aforesaid, all the three writ petitions deserve to be partly allowed. Respondent No. 3 is restrained by a writ of mandamus from imposing any tax upon the petitioners in pursuance of the circular dated January 13, 2006 issued by respondent No. 2 acting upon the circular dated January 4, 2006 issued by respondent No. 1. - Writ Petition Nos. 1654,1683,1709 of 2007 - - - Dated:- 18-7-2008 - VEA B.S. RM , J. B.S. VERMA J. Since the controversy including the legal issue involved in these writ petitions is similar, therefore, for the sake of convenience, all the three writ petitions are being decided by this common judgment. The writ petition No. 1683 of 2007 (M/S) has been filed for the following reliefs: (a) a suitable writ, order or direction in the nature of certiorari be issued quashing the circular dated January 13, 2006 issued by the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 31, 2000 and had started its production with effect from March 27, 1998 by making huge investment of about Rs. 300 crores, exemption was granted to the petitioner as referred to in the notification dated February 21, 1997. After creation of new State of Uttaranchal (now Uttarakhand), the State Government has adopted the Act and the word Uttaranchal has been substituted in place of Uttar Pradesh therein. According to the petitioner, no amendment has been made in the Notification dated February 21, 1997. The grievance of the petitioner is that after enforcement of the VAT Act on October 1, 2005, the Principal Secretary Finance, Uttaranchal, sent a letter No. 01/XXVII(8)/VAT/2005 dated January 4, 2006 thereby the exemption under section 4A of the Act has been discontinued in the State of Uttaranchal. Consequently, the Commissioner of Taxes, Dehradun, issued a circular to all the authorities concerned to take action with the result the Deputy Commissioner (Assessment), Commercial Taxes, Roorkee issued notice dated January 20, 2006 for the months of October and November 2005 directing the petitioner to deposit the tax at 12.5 per cent. The letter of the Principal Secretary, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the petitioner was enjoying the exemption under eligibility certificate for a period of 15 years, the petitioner is entitled for exemption for the remaining period of exemption in accordance with the provisions of section 76(6)(b)(i) of the VAT Act. It was further stated that in view of the provisions of section 80(15) read with section 76(6)(b) of the VAT Act it is absolutely clear that after the enactment of VAT Act in Uttaranchal, exemption under section 4A of the Act to the existing units holding eligibility certificate which were granted exemption prior to November 9, 2000 shall be entitled to exemption for the remaining period of eligibility certificate. It has also been stated in the rejoinder affidavit that the rebate of tax was granted by the Uttaranchal State by notification dated December 26, 2000 on the sale of goods by any dealer having his place of business in the State of Uttaranchal to the extent of exemption from or reduction in the rate of tax available to the manufacturing dealer having his place of business in the State of Uttar Pradesh on the sale of such goods. Relevant extract of paragraph 9(iii) of the rejoinder affidavit reads as under: (iii) Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er established the unit for manufacturing of dry cell batteries, battery intermediates and plastic moulded components in pursuance of the notification dated February 21, 1997 issued under section 4A of the Act. An eligibility certificate was granted by the prescribed authority on December 20, 1999 under section 4A of the Act and addenda to this certificate was also granted on August 21, 2000 for a period of 15 years with effect from November 8, 1998 to November 7, 2013 or to the extent of 150 per cent of the fixed capital investment fixing the monetary limit on Rs. 53,17,79,316 which was made by the petitioner within the specified period as provided in clause 3(a) of the notification dated February 21, 1997. According to the petitioner, when the State of U.P. announced its Industrial Policy of 1994 for grant of exemption under section 4A, thereby granting exemption to the units making investment of more than 50 crores from payment of tax be they new units or units undertaking expansion, modernisation and diversification after December 1, 1994 and before March 31, 2000 as detailed in the Notification published in the official Gazette on March 21, 1997. It has been stated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition. Consequently, the Deputy Commissioners (Assessment), Commercial Taxes, Rishikesh issued notice dated March 6, 2006 for the month of October, 2005 to January, 2006 directing the petitioner to deposit the tax at 12.5 per cent. In this writ petition, the letter dated January 4, 2006 and the circular dated January 13, 2006 are under challenge. In Writ Petition No. 1709 of 2007 (M/S), the petitioner has prayed for quashing of circular dated January 13, 2006 issued by respondent No. 2 as well as the circular dated January 4, 2006 issued by respondent No. 1. The petitioner has also prayed for writ of certiorari to quash the notice dated February 2, 2006 issued by respondent No. 3. The petitioner has further prayed for writ of mandamus restraining respondent No. 3 from imposing any tax for the assessment years 2005-2006 and 2006-2007 on the sales made by the petitioner within the State of Uttaranchal of the goods manufactured in its new unit for which the eligibility certificate had been granted on August 22, 2001. According to the petitioner, the petitioner is a public limited company incorporated in the Indian Companies Act registered under the Uttaranchal (U.P. Trade Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed in the State of Uttar Pradesh having eligibility certificate (validity commencing prior to November 9, 2000) issued under section 4A of the Uttar Pradesh Trade Tax Act, 1948 for the manufacture of such goods . It is also an undisputed fact that the Commissioner of Taxes, Uttaranchal, has issued a letter dated November 25, 2003 to all the Deputy Commissioners (Tax Assessment), Trade Tax, Uttaranchal, wherein directions relating to exemption under section 4A of the Act granted to the units on the basis of eligibility certificate were issued. It is also an undisputed fact that the State of Uttaranchal has adopted the enactments at the time of creation of this State, as applicable in the State of Uttar Pradesh in view of the provisions of section 86 of the Uttar Pradesh Reorganization Act, 2000. The State of Uttaranchal had also issued notification No. 1214 dated March 23, 2002 whereby Uttaranchal (Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002 came into force and all the provisions of the Act were made applicable to the State of Uttaranchal as they were applicable in the erstwhile State of Uttar Pradesh as is evident from annexure No. 1 of the main writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Uttar Pradesh for the stipulated period as stated in the memo of writ petition as provided in clause 3(a) of the notification dated February 21, 1997. It is thus evident that the petitioners had been enjoying exemption from payment of tax under section 4A of the Act under notification dated February 21, 1997 in the erstwhile State of Uttar Pradesh and thereafter by the impugned circular dated January 4, 2006, the facility of exemption was allegedly discontinued by the State Government in view of the provisions of sub-section (13) of section 80 of the VAT Act. Again, the State of Uttarakhand issued another notification dated October 12, 2006 thereby granting rebate of tax on the sale of goods by any dealer having his business in the State of Uttaranchal and possessing eligibility certificate (validity commencing prior to November 9, 2000) issued under section 4A of the Act. Thus, according to the respondents, the tax was payable by the petitioners for the period October 1, 2005 to October 11, 2006. Learned counsel for the petitioners has vehemently contended that the provisions of section 5 of the Act is analogous to section 4(6) of the VAT Act, 2005. Therefore, in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e specified in the said notification. (2) The rebate under sub-section (1) may be allowed with effect from a date prior to the date of the notification. Learned counsel for the petitioners further contended that the provisions of sub-section (13) of section 80 of the VAT Act are to be read with the provisions of sub-sections (14) and (15) thereof. Learned counsel has pressed into service that as per provisions of sub-sections (13) and (15) of section 80 read with section 76(6)(b) of the VAT Act, the petitioners cannot be denied exemption from tax for the remaining period under the eligibility certificate. Sub-sections (13) and (15) of the VAT Act read as under: (13) Subject to the provisions of sub-section (14) and sub-section (15) of this section, any exemption from payment of tax or any concession in payment of tax or concession or reduction in rate of tax or any rebate or reimbursement in respect of any sale or purchase of any goods granted under any provisions of the Repealed Act or, as the case may be, the Repealed Ordinance or Rules made or notifications issued thereunder, shall not be admissible in respect of purchase or sale of any goods on or after the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State of Uttaranchal only. It was also argued that the petitioners are not entitled for tax exemption with effect from October 1, 2005 to October 12, 2006. The argument of the learned Additional C.S.C. is misconceived for the simple reason that the notification dated December 26, 2000 was issued by the State of Uttaranchal, as referred to above, whereby rebate on tax was available to the petitioners and as per provision of sub-section (3) of section 80 of the VAT Act it has been provided that the notifications under the repealed Act/Ordinance continuing to be in force on the day immediately before the date of commencement of this Act shall continue to be in force on or after such date in so far as they are not inconsistent with the provisions of this Act. Since the notification dated December 26, 2000 was issued under section 5 of the Act and since the provisions of section 4(6) of the VAT Act and that of section 5 of the Act are analogous and not inconsistent with each other, the petitioners shall be deemed to be enjoying the rebate of tax throughout, i.e., between October 1, 2005 to October 11, 2006. The State Government by Notification dated October 12, 2006 issued under sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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