9911796707
TMI Blog2008 (11) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... unit for manufacture of special smokeless fuel (for short, SSF Coke ) at Gidha, Koilwar, District Bhojpur. The industry is said to have been established by the petitioner pursuant to the industrial policy framed by the State of Bihar promising various types of incentives, inter alia, to the new industry. According to the petitioner, it has been granted tax exemption certificate from payment of sales tax on the sale of its finished product, viz., SSF coke, under notification dated December 22, 1995, issued in exercise of the power under section 7(3) of the Bihar Finance Act, 1981 (for short, the Act, 1981 ). That the coal/coke is a notified commodity under the provisions of Act, 1981 for the purpose of levy as well as tax is not in dispute. The exemption granted to the petitioner from payment of sales tax is for a period of ten years from the date of commencement of the production, i.e., from August 31, 2000 to August 31, 2010. The Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1993 (for short, the Entry Tax Act ) came into force in the year, 1993. Section 3 of the Entry Tax Act is a charging section and it provides for tax on entry of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this notification before the competent authority under the appropriate law will on following terms and conditions be entitled for exemption from payment of sales tax on sale of their finished products: 1.. (a) New industrial units means such units which have started their commercial production in between September 1, 1995 to August 31, 2000; and such industrial units which have got licence/ registration certificate from the competent authority of the Industries Department/Industrial Area Development Authority/Directorate of Industries and Government of India; (b) Merely by changing the proprietorship or firm's name, a unit will not be deemed to be a 'new unit'; (c) For the purpose of grant of exemption from payment of sales tax, industrial unit means only such unit which manufactured goods for sale, and for this purpose, meaning of 'manufacture' will be the same as defined under Chapter 1 of the Bihar Finance Act, 1981 (Part 1 of the Bihar Act 5 of 1981); 2.. This facility will only be applicable to the following industries described under the category of 'thrust industries' under clause 15 of the Industrial Resolution Policy, 1995: (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical Development, Department of Industries will be valid and acceptable in respect of the date of production of large and medium industries; (c) In case of any dispute in the date of production, the decision of the Director of Industries in case of small-scale industries and the decision of the Industries Development Commissioner in case of medium and large industries will be acceptable as final; 8.. It will be essential for availing this benefit that the building in which the unit is situated belongs to the owner/entrepreneur under his own ownership or any of the partners or under the owners of a holding company, if the premises of the unit has been taken on lease on which the building is situated, then the benefit will be extended only if the lease is for the period not less than 15 years and is a registered lease in the name/favour of the proprietor/partner or the managing director of the company; 9.. If the electricity connection is not in the name of unit/firm or proprietor/partner/holding company, then the benefit of exemption from payment of sales tax will be admissible only when the electricity connection is transferred/authorized in the name of its own unit/ propr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be admissible only to the extent of incremental production on the extended capacity consequent upon expansion/diversification/modernization in case a unit has undergone expansion/diversification/modernization; Under this part, incremental production means second/third of the originally installed capacity or the maximum production during the past three years preceding the year of expansion/diversification/ modernization, whichever is more in both; In case of the diversification, this facility will be admissible only in relation to such commercial goods which was not manufactured by the unit prior to diversification; (e) the benefit of exemption from payment of sales tax on expansion/diversification/modernization will be admissible only if along with the incremental production, the original production is also continued; 13.. Any unit, by merely makes change in the name, will not be considered to be a new unit and the benefit under this policy will not be admissible to such unit. 14.. The owner of the unit will be obliged to maintain separate accounts of sale and purchases for sale and purchase of goods. 15.. The owner of the unit will be obliged to produce the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in-charge will pass an order regarding eligibility of the unit for exemption from payment of sales tax on the basis of the specification and the report of the local enquiry, and will forward it along with the concerned documents to the Joint Commissioner of Commercial Taxes (Admn.) for his approval; (d) The concerned Joint Commissioner of Commercial Taxes (Admn.) of the Division on receipt of the application will grant his approval immediately or will return back the same with necessary directions; (e) On receipt of approval from the Joint Commissioner of Commercial Taxes (Admn.), the circle in-charge will immediately issue a certificate in favour of the unit or will dispose of the application in accordance with the direction of the Joint Commissioner of Commercial Taxes (Admn.); (3) The Commissioner of Commercial Taxes, suo motu, in the interest of Revenue, shall be empowered to review the order of the circle in-charge Joint Commissioner of Commercial Taxes (Admn.) or will pass necessary order; 19. The competent authority will be entitled to reject the application of such unit which does not fulfil the required condition mentioned in the notification or does not pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aler liable to pay tax under Bihar Finance Act, 1981 or any other person who brings or causes to be brought into the local areas such scheduled goods whether on his own account or on account of his principal or takes delivery or is entitled to take delivery of such goods on such entry: Provided no tax shall be leviable in respect of entry of such scheduled goods effected by a person other than the dealer if, the value of such goods does not exceed twenty-five thousand rupees in a year. Provided further, that where an importer of scheduled goods liable to pay tax under the Act, becomes liable to pay tax under the Bihar Finance Act, 1981 (Bihar Act 5 of 1981) by virtue of sale of such scheduled goods, his liability to pay tax under the Bihar Finance Act, 1981 shall stand reduced to the extent of tax paid under the Act. (3) The liability to pay tax on Scheduled goods shall only be at the point of first entry into a local area and any subsequent entry or entries into any other local area or areas of the said scheduled goods shall not be subject to tax provided the subsequent importing dealer produces before the assessing officer the original copy of the cash memo, invoice, bill o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e latter from payment of entry tax on the goods imported by it from outside the State is an admitted position. In other words, there is no exemption from levy or payment of entry tax exempting the petitioner from payment of entry tax on entry of scheduled goods from outside into the State of Bihar for consumption and use by the petitioner. Mr. S.D. Sanjay, counsel for the petitioner, however, relied upon the second proviso appended to section 3(2) of the Entry Tax Act in support of his contention that the petitioner is exempted from payment of entry tax on the entry of scheduled goods from outside the State of Bihar for its consumption and use by the petitioner. What is provided by the second proviso appended to sub-section (2) of section 3 is that the liability to pay tax by an importer under the Act, 1981 shall stand reduced to the extent of tax paid under the Entry Tax Act. In other words, where importer of scheduled goods who is liable to pay tax under the Entry Tax Act, becomes liable to pay tax under the Act, 1981, the tax paid by such importer under the Entry Tax Act is adjustable against his liability to pay tax under the Act, 1981. Second proviso appended to sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney in Sindri unit on additional/incremental production of cement. Sales tax exemption was granted to the expanded unit under the Bihar Finance Act as well as industrial policy for the period from April 1, 1980 to February 31, 1997. For the sales tax that was payable by that company under the Bihar Finance Act, it claimed its entitlement to adjust the entry tax paid by it under the Entry Tax Act. However, the claim was not accepted by the commercial taxation authorities and notices came to be issued to the petitioner proposing to levy tax for the assessment years, 1998-99, 1999-2000 and April 1, 2000 to November 14, 2000. The company challenged these notices before this court by filing a writ petition. This court was not persuaded by the contentions of the company and dismissed the writ petition on March 28, 2003. Aggrieved thereby the Associated Cement Companies Ltd. carried the matter to the Supreme Court. The issue that was raised before the Supreme Court is reflected in paragraph 2 of the report which reads thus: (page 391 of STC) 2. The appellant questioned legality of the notices issued on May 30, 2002 and June 24, 2002 by the Deputy Commissioner, Commercial Taxes, Patna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctionary means 'legally bound, subject to (a tax or penalty), under an obligation'. In Black's Law Dictionary (6th Edn.) the word 'liable' means 'bound or obliged in law or equity; responsible; chargeable; answerable; compellable to make satisfaction, compensation, or restitution . . . obligated; accountable for or chargeable with.' The above position was noted in Zunjarrao Bhikaji Nagarkar v. Union of India [1999] 7 SCC 409. 21.. Tax at the appropriate rate would have become payable but for the exemption. Decision in Australian Mutual Provident Society v. IRC [1962] AC 135 (PC), has stated the position as follows: 'The phrase exempt from taxation (Land and Income-tax Act, 1954 (No. 6701) (New Zealand), section 86(1)) does not cover income that is not at all within the reach of the New Zealand tax laws. It refers to income that would, had it not been for the exemption, otherwise have been so taxable'. The answer to the aforesaid question is found in paragraph 20 (paragraph 22 of STC) of the report which reads thus: 20. Therefore, it cannot be said that as tax was not paid on portion of the turnover of the Scheduled goods, i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004) were bad because the former made the Act violative of article 304(a) of the Constitution and further because both the amendments were made without the previous sanction of the President. (iv) The introduction of imported goods within the definition of 'entry of goods' was bad for being retrospective as also for want of the presidential sanction/assent. (v) After the 2006 amendment the levy under the Act acquired the nature of a compensatory tax and the Act in its present form is a valid piece of legislation. The Government counsel would submit that the judgment of this court in the case of Indian Oil Corporation Ltd. [2007] 10 VST 140; [2007] 1 PLJR 502 has been challenged before the Supreme Court and the appeal is pending there. He, however, submitted that he has no objection if it is observed that the petitioner's case shall be considered by the respondent No. 4 with regard to refund of entry tax prior to the Amending Act of 2006, in accord with the decision that may be given by the Supreme Court in the appeal arising out of the judgment in the case of Indian Oil Corporation Ltd. [2007] 10 VST 140; [2007] 1 PLJR 502. In what we have discussed above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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