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TMI Blog2009 (4) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2002-03, the petitioner sold wire rods worth Rs. 31,58,39,028.51 to M/s. REPL against the statutory declaration form No. 1D(96) issued by it claiming sales tax exemption on purchase of raw materials under the Industrial Policy Resolution, 1996. At the time of assessment, the petitioner produced the statutory declaration forms in support of its claim of deduction for sale of wire rods to REPL. But, the assessing officer did not accept the said declaration forms and added Rs. 31,58,39,028.51 to the taxable turnover of the petitioner and levied tax and surcharge on the said amount which resulted in an extra tax demand of Rs. 1,38,96,917. The assessing officer rejected the declaration forms on the ground that REPL was not entitled to sales tax exemption for the year 2002-03 under the IPR 1996, as it has exceeded the maximum limit of tax exemption prior to the said year. Hence the writ petition. Mr. B.K. Sharma, learned counsel for the petitioner, submits that REPL had been given a certificate of eligibility for sales tax concession on purchase of raw materials, machineries, spare parts, packing materials and finished products under the IPR, 1996 vide letter dated September 24, 1998 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for availing of tax concession had been exceeded or not by a particular date. The only duty of the petitioner is to verify whether the goods purchased have been specified in the registration certificate of the buying dealer and declaration form No. 1D(96) issued by the competent authority is furnished for availing of exemption. If these two conditions are satisfied, the petitioner has no option but to sell the materials to REPL. Therefore, the order of the assessment passed by the assessing officer imposing tax on sale of wire rods to REPL against form No. 1D(96) is not legally sustainable. Mr. S.C. Lal, learned Senior Counsel appearing for opposite party No. 5 submits that during the period under consideration, REPL is entitled to avail of sales tax exemption on purchase of raw materials, etc., in terms of entry 43A of the tax-free List. It had not exceeded the maximum limit of exemption prior to the year 2002-03 as alleged by the assessing officer. It is further argued that this court in the case of opposite party No. 5 (W.P. (C) No. 2976 of 2003) disposed of on December 21, 2007 (Rishabh Electricals Pvt. Ltd. v. State of Orissa [2008] 14 VST 391) and HI-TEK Powercon Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Zone-B and is entitled to sales tax concession for a period of six years initially and not for eight years as certified in the eligibility certificate dated September 24, 1998. The question of extending tax exemption for two additional years will arise only after completion of the original period of tax exemption, i.e., after six years from the date of commercial production. Therefore, extension of tax exemption period by two additional years in the original eligibility certificate dated September 24, 1998 was premature. Since in the present case, the petitioner had exceeded the limit of tax exemption in the year 1998-99, the petitioner unit thereafter was not eligible to avail of any sales tax concession under IPR 1996. It is also argued that NALCO has sold wire rods to M/s. Rishab Electricals and collected declaration in form 1D(96). This declaration provides that the industry has been granted eligibility certificate bearing No. 11124 dated September 24, 1998 by Director of Industries. This declaration is intimately connected with the eligibility certificate issued by the Director of Industry. The Director of Industries vide para 7 of the eligibility certificate, has certified th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectively. In serial No. 43A under item No. (ii) of the third proviso in column (3), it was originally provided as follows: "(ii) for priority industries the period of exemption shall be extended by two additional years and the maximum limit for exemption of sales tax shall be 200 per cent of the fixed capital investment and in case of electronic/telecommunication (hardware and software) industrial units the maximum limit of exemption of sales tax shall be 250 per cent of the fixed capital investment." Subsequently, vide Finance Department Notification No. 52281-CTA-2/ 2002-F (SRO No. 932 of 2002) dated November 12, 2002, this provision has been substituted, the relevant portion of which is reproduced herein below: "(ii) For all priority industries, the period of exemption shall be extended by two additional years and there shall be no maximum limit on such exemption during the eligibility period." According to Mr. Kar, learned counsel for the Revenue, M/s REPL started its commercial production from June 12, 1998 and since the unit exceeded the maximum limit of exemption of sales tax, i.e., by 200 per cent of the fixed capital investment during the year 1998-99, the unit there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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