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TMI Blog2009 (4) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... filed this revision petition under section 86 of the Rajasthan Sales Tax Act, 1994 being aggrieved by the judgment of the Tax Board dated September 23, 2005 allowing the Revenue's appeal and holding that the assessee was not entitled to avail of the partial exemption from sales tax under the notification dated May 6, 1986 for the assessment year 2001-02 because it had made some inter-State sales during the said year in question and had availed of concessional rate of tax at six per cent under the later notification dated January 21, 2000 which contained a condition No. 3 that if the assessee avails of such concessional rate of tax under the notification dated January 21, 2000, he would not avail of the benefit of partial exemption from sales tax under the notification dated May 6, 1986. The assessing authority had imposed additional tax on the respondentassessee for the aforesaid period by the assessment order dated August 26, 2003 in view of the circular issued by the Commissioner of Commercial Taxes Department on April 16, 2001 which was issued by the Commissioner explaining the notification dated January 21, 2000. The first appellate authority-Deputy Commissioner (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Rajasthan on or after December 4, 1985, the average of the aforesaid percentages in respect of the other manufacturers in the State in the relevant industry during the accounting year 1984-85, calculated and determined by the assessing authority with the approval of the Commissioner, shall be deemed to be the percentage in respect of such dealer for the accounting year 1984-85; (3) The increase effected in the percentage, as referred to in clause (1) above in respect of the sales in the course of inter-State trade or commerce, to be considered shall be limited to the extent of the decrease in the percentage in respect of the despatch of goods to head office, branch office, depot or agent outside the State for sale outside the State, during the relevant accounting year as against such percentage during the accounting year 1984-85; and (4) No claim for such reduction of tax shall be allowed in respect of levy-cement. S.O. In exercise of the powers conferred by section 8(5), CST Act, 1956, the State Government hereby directs that the tax payable under sub-sections (1) and (2) of the said section, by any dealer having his place of business in the State, in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Central Sales Tax Act as against the branch transfers or depot transfers on which no CST was payable, the State gave this partial exemption depending upon such shift from branch transfers to inter-State sales by the assessee and the quantum thereof, therefore, this partial exemption could not be curtailed by a later notification providing for a concessional rate of tax under the CST Act subject to condition like condition No. 3 in the notification dated March 7, 1994 or notification dated January 21, 2000 and at least those inter-State sales on which tax at six per cent was not charged by the assessee under the said notification dated January 21, 2000, the increase in the inter-State sales in comparison to the base year 1984-85 should be allowed to be computed under the notification dated May 6, 1986 and the benefit of partial exemption should be given accordingly. The learned counsel for the assessee further submitted that the assessee is claiming benefit of partial exemption only in respect of such inter-State sales made by it which are not covered by the notification dated January 21, 2000 and, therefore, the benefit of partial exemption cannot be hit or prohibite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 16, 2001 is also reproduced hereunder for ready reference: Kar-Niti Prapatra No. 2001/1 GOVERNMENT OF RAJASTHAN COMMERCIAL TAXES DEPARTMENT No. F-16 (Budget) Tax/CCT/94-95/119 Dated April 16th, 2001 All Deputy Commissioners All Assistant Commissioners All Commercial Taxes Officers. All Assistant Commercial Taxes Officers. Circular A question has been raised as to the applicability of Finance Department Notification No. F.4(72)FD/Gr.IV/81-18 dated May 6, 1986 vis-a-vis Notification No .F/(8) FD/Gr.IV/94-70 dated March 7, 1994 and similar subsequent notification dated March 12, 1997 and the existing notification dated January 21, 2000. The issue has been examined and it is clarified that a dealer can avail the benefit of either of these two notifications in any financial year. For instance, if he opts for benefit under notification dated May 6, 1986 for the financial year 2000-01, he would not be entitled to claim simultaneous benefit in the same year under the notification providing for reduced rate of tax on cement in course of inter-State trade or commerce without any supportive form C or D. Consequently, if the benefit of notification dated May 6, 1986 is being availe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or rectification does not appear to be justified. Instead of making interference in writ jurisdiction, the petitioner is directed to appear before the authority issuing notice as aforesaid and will put forward his case set up by him. The authority will consider the notification in right perspective. While deciding the case, it will also clarify its position as to why the notification which could only be prospective and effective after April 16, 2001, a rectification notice was issued to him for the assessment year 2000-01. The clarification will be sent to this court. The writ petition is disposed of and would be treated to be pending for the purpose of considering the explanation of the assessing officer. In pursuance of the said order, the assessing authority had dropped the rectification proceedings vide order dated November 24, 2003 and accordingly the said writ petition came to be finally disposed of with the additional order passed by the same learned single Judge on May 13, 2004 in the following terms: May 13, 2004 Honourable B. Prasad, J. Mr. R. Mehta, for petitioner. Mr. B.S. Bhati, for respondent. Perused the explanation. Explanation is accepted. No further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause then only it could be construed to mean that on the inter-State sales under this notification (namely notification dated January 21, 2000) the assessee shall not be eligible to claim benefits provided by notification dated May 6, 1986. To explain, the said condition No. 3 is reiterated below by the aforesaid three words marked in bold(1). 3. That the dealer making inter-State sales under this notification shall not be eligible to claim benefits provided by Notification No. F.4(72)FD/Gr.IV/81-18 dated May 6, 1986 as amended from time to time (S. No. 625). Mr. Sancheti relied upon the decisions of the honourable Supreme Court in the case of State of Jharkhand v. Ambay Cements [2005] 139 STC 74; [2005] 1 SCC 368, Commissioner of Central Excise, Chandigarh-I v. Mahaan Dairies [2004] 166 ELT 23 (SC) in support of his contention that the exemption provision in a taxing statute has to be construed strictly and not liberally and the court cannot grant exemption under the Industrial Policy ignoring the eligibility condition prescribed therein in the exemption notification. Having heard the learned counsels and after giving my thoughtful consideration to the rival contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the sale, excluding stock transfer or consignment sale outside the State, of finished products made out from such raw materials, subject to limitation of six months or the same financial year from the date of purchase of such raw materials.' The question in this case is whether the appellant is entitled to the benefit of clause 28.1. Admittedly, the appellant had been granted the benefit of sales tax deferment for a period of eight years from 1995 to December 31, 2003 under the Old Bihar Industrial Policy, 1995 read with Notification S.O. Nos. 478 and 479 both dated December 22, 1995. Thus, it is an admitted case that on the effective date, i.e., November 15, 2000 the appellant was actually availing of the facility of tax deferment under the notification announced earlier. Hence in our opinion on a plain reading of clause 28.1 of the Industrial Policy, which was introduced on November 15, 2000 in the State of Jharkhand, the appellant is not entitled to the benefit under clause 28.1. The learned counsel for the appellant contends that if we hold that units which were actually availing of the facility of tax deferment on November 15, 2000, will not be given the bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke in referring to the 1987 Scheme in its order of assessment, but thereby the appellant cannot be permitted to derive any benefit to which it was not entitled under the law. The appellant indisputably was eligible for grant of exemption in terms of both the schemes. It had opted for the latter scheme. While doing so, it must have taken into consideration the benefits under both the schemes separately. Having opted for the 1989 scheme, in our opinion, now the appellant cannot be permitted to turn round and contend that it should have been granted the benefit of 1987 Scheme, only because at a later stage it found the same to be more beneficial. In State of Rajasthan v. J.K. Udaipur Udyog Ltd. [2004] 137 STC 438, the honourable Supreme Court again dealing with the case arising under the Rajasthan Sales Tax/Central Sales Tax Exemption Scheme for Industries, 1998 held that the concession or exemption given by the Government is a defeasible right of the industry and if by a later notification, the State reduced the exemption, the assessee had no right to claim that the State should not recover from the dealer the tax which the dealer has lost opportunity to recover from its cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06] 8 SCC 702 relied upon by the learned counsel for the assessee-petitioner, another Division Bench of the Supreme Court dealt with the similar controversy. The statutory notification amending the earlier exemption notification adversely affecting the rights already accrued was challenged by the assessee on the principle of promissory estoppel. From the facts obtaining before the Supreme Court it would appear that original notification granting exemption for expansion in manufacture of certain products including rubber based goods was promulgated and relying thereon the assessee-manufacturer commenced commercial production after investing huge amount and it also obtained eligibility certificate from the competent authority. The assessee under the said scheme was entitled to exemption for a fixed period of seven years in respect of rubber based goods manufactured by it. During the currency of the period of exemption the State Government issued another notification excluding the formation of compound rubber from the definition of manufacture for the purpose of the original exemption notification. Such subsequent notification was challenged by the assessee on the ground that it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t direct grant of exemption to the writ petitioner-industrial unit, overlooking the mandatory statutory conditions prescribed therefor, particularly in the absence of any challenge to the validity of such condition. In para Nos. 24, 25 and 26 of the said judgment, the court held as under (at page 85 of STC): 24. In our view, an exception or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the industrial policy and the exemption notifications. 25.. In our view, the failure to comply with the requirements renders the writ petition filed by the respondent liable to be dismissed. While mandatory rule must be strictly observed, substantial compliance might suffice in the case of a directory rule. 26.. Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. It is the cardinal rule of the interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted May 6, 1986 and January 21, 2000 provide for exemption or concession to the assessee, a manufacturer of cement. While the notification dated May 6, 1986 does not specify any dealer or type of manufacturer, the later notification dated January 21, 2000 applies to manufacturers of cement. As noted above, for other commodities manufacturers, other similar notifications were also issued by the State Government. Therefore, the State Government cautiously wanted not to apply or allow the benefit of notification dated May 6, 1986 to those manufacturers or specified dealers for which subsequent notifications like the one in hand dated January 22, 2000 was issued, if they make sales and avail benefit of concessional rate of tax under these notifications issued under section 8(5) of the CST Act. Therefore, dissecting this condition and still allowing the benefit of partial exemption under the notification dated May 6, 1986 would be doing violence to the condition No. 3 which was never intended by the State Government. It is for the assessee to opt either for availing benefit of concessional rate of tax under the notification dated January 21, 2000 or not to do so altogether. Once, he doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntend that notification dated May 6, 1986 exempted a class of dealer or manufacturer. Partial exemption granted is also relating to taxable event in the form of taxable inter-State sales only and the rebate or remission or partial exemption granted under the notification dated May 6, 1986 cannot and does not travel beyond the scope of section 8(5) of the CST Act and, therefore, the question is only whether the subsequent notification dated January 21, 2000 deprives the benefit of partial exemption under the notification dated May 6, 1986 or not, which it does, in the opinion of this court, in view of condition No. 3 of the later notification dated January 21, 2000. Section 8. (5) Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, and subject to such conditions as may be specified therein, direct, (a) that no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sales by him, in the course of inter-State trade or commerce, from any such place of business of any such goods or classe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of constructive delivery. Commissioner giving a particular interpretation of law purported binding on all the assessing authorities is doubtful. There is no specific provision in the Sales Tax Act, either under the RST Act or under the CST Act, empowering the Commissioner to issue such circulars, as against such powers conferred under section 19 of the Income-tax Act on the Central Board of Direct Taxes. Even section 119 of the Income-tax Act, which empowers the way of its proviso restricts and provides that no such order, instruction or direction shall be issued so as to require any Income-tax authority to make a particular assessment or dispose of a particular case in a particular manner and such orders or instructions shall also not interfere with the discretion of the Commissioner (Appeals) in exercise of its appellate functions. Therefore, this court cannot countenance the issuance of such circulars by the Commissioner of Sales Tax, which unduly fetter with the quasi-judicial discretion of the assessing authorities, who are expected in law to give their findings of fact and interpret the statutory law in their own quasi-judicial discretion in accordance with the law as inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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