9911796707
TMI Blog2012 (4) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... nd dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... production/sale specified above alone will be eligible for deferment. The highest production/sale achieved by the company prior to the proposed expansion/diversification in the last three years is linear alkyl benzene was ₹ 34,981.84 lakhs for the year 1993-94. Accordingly, the revised eligibility certificate amended the stipulated BPV of 42,999 MT and BSV ₹ 17,491 lakhs per half yearly basis. The company stated to enjoy deferral sales tax only on the increased volume of production. Till reaching the volume of production specified in the certificate, the company will have to pay tax and any liability in excess of production specified alone will be eligible for company. 5. But, however the petitioner-company disregarding the conditions stipulated in the eligibility certificate had availed of deferral scheme which reads as follows: Year TNGST/VAT CST Total 2000-01 44,35,021 18,84,311 63,19,332 2001-02 1,18,56,251 13,82,349 1,32,38,600 2002-03 1,15,72,911 66,02,117 1,81,75,028 2003-04 1,68,88,810 7,30,435 1,76,19,245 2004-05 2,12,03,493 91,41,858 3,03,45,351 2005-06 3,18,41,161 1,02,99,489 4,21,40,650 2006-07 3,17,07,215 1,21,89,818 4,38,97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: ". . . it is observed that the SIPCOT extended the deferral benefit to the diversification project, viz. epichlorohydrin from the date of commencement of the deferral facility. For BPV, branch transfer/sales through agents shall be included. As tax receipts prior to expansion shall go down after expansion. BSV will be based on taxable sales. Both BPV and BSV shall be complied with. Therefore, the SIPCOT is requested to offer their remarks on the issue of this office, to decide the representation filed by Tvl. Tamil Nadu Petroproducts Ltd." 9. Pursuant to the same, the SIPCOT had issued a letter dated November 7, 2008 which is as follows: "The BPV and BSV mentioned in the EC issued by SIPCOT are the highest production and the highest sales turnover achieved by the company during the three years prior to diversification as per the annual report. The BSV includes the sales coming under TNGST as well as branch sales, transfers, inter-State sales, exports, etc. For the purpose of availing of concessions under the EC, the BPV and the sales made in excess of the BSV under the Tamil Nadu General Sales Tax Act should be taken into account, as the purpose is to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finally on December 23, 2009, until further orders. On notice from this court, a common counter-affidavit, dated February 6, 2012 was filed by the respondentCommercial Tax Department. The petitioner has filed a common replyaffidavit, dated February 22, 2012. 14. Though elaborate arguments were addressed by citing several judgments, it is unnecessary to go into those decisions as they have no relevance to the case on hand. As rightly contended by Mr. Manoharan Sundaram, learned Government Advocate (Taxes) and Ms. Narmadha Sampath, learned standing counsel for the SIPCOT, the petitioners are bound by the eligibility certificate for availing of the benefit under the scheme. Having accepted the terms of the eligibility certificate which is the requirement under G.O. Ms. No. 119, CTRE Department, dated April 13, 1994, after a period of 10 years, they cannot turn back and challenge the eligibility certificate which initially gave them power to enter into an agreement with CTRE Department. When the scheme is intended for providing incentive to set up industries in backward areas with a view to maximise the production so as to increase the infrastructures of the area as well as provide e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of tax by a class of dealers who had been issued eligibility/exemption certificates. This is not in dispute. 22. Rule 28A deals with computation of the quantum of tax incentive available to a dealer in whose favour eligibility certificate is issued. In order to regulate the exemption scheme the concept of 'notional sales tax liability' stood incorporated vide rule 28A(2)(n) of the 1975 Rules. 23. The Department has placed heavy reliance on the proviso in rule 28A(4)(a), which has been quoted above. The said proviso states that in case of exemption, the benefit shall extend to tax on gross turnover and in case of deferment it shall extend to tax on the taxable turnover of the goods manufactured by the unit. We have quoted the definition of the word 'gross turnover' which is defined to mean the aggregate of the amount of sales and purchases made by any dealer. The Department placed heavy reliance on this definition of the words 'gross turnover' to say that it would include export sales, particularly, when rule 28A contains a proviso to the effect that in case of exemption, the benefit shall extend to tax on 'gross turnover'. There is no disput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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