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TMI Blog2011 (11) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... v. State of Rajasthan. 2. Clause 7 of the Rajasthan Investment Promotion Policy, 2003 ( RIPS 2003 , for short) provides that in case of new investment made, the sum total of interest subsidy and wage/employment subsidy would be subject to a maximum limit of fifty per cent of the tax payable and deposited under the Rajasthan Sales Tax Act, 1994, the Central Sales Tax Act, 1956 and Value Added Tax Act as and when introduced in the State. The Rajasthan VAT Act, 2003 was enforced with effect from April 1, 2006 during the operative period of RIPS, 2003, which was extended up to March 31, 2011. Clause 7(i)(a) of the Scheme reads as under: 7. Subsidies (i)(a) In case of new investment made, the sum total of interest subsidy and wage/employment subsidy would be subject to a maximum limit of fifty percent of the tax payable and deposited under the Rajasthan Sales Tax Act, 1994, the Central Sales Tax Act, 1956 and Value Added Tax Act as and when introduced in the State. 2. The impugned clarification issued by the tax division of the Finance Department of Government of Rajasthan on October 10, 2008, is also reproduced hereunder in extenso for ready reference: Government of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the unit is engaged in trading of goods, other than the goods manufactured by it, subsidy is allowable only on the amount of tax payable on the sale of goods manufactured by such unit. By order Sd/(ADITYA PAREEK) Deputy Secretary to Government 3. The grievance raised in the present writ petition is that the said clarification issued by the State Government on October 10, 2008 is contrary to the provisions of RIPS, 2003 as well as the Rajasthan VAT Act, 2003 which does not define as such the term tax payable as such. 4. The learned counsel for the petitioners, Mr. Dinesh Mehta, therefore, contended that the term tax payable should be interpreted to mean the gross output tax payable under the VAT Act, 2003 and not 'net tax payable' after deducting input-tax in the case of the petitioner-industry and the petitioner-industry as per clause 7 reproduced above could not be with reference to net tax payable under the VAT Act, but should be with reference to gross tax payable under the said Act. He urged that in purported exercise of powers for issuing such clarification conferred upon the State Government under clause 9 of the Scheme, which was amended on the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the tax payable by a dealer under the Rajasthan VAT Act, 2003 has been defined in section 17 of the VAT Act, 2003 which stipulates that tax payable under the said Act is net tax payable by a registered dealer for a tax period computed by formula; T = (O+R+P) I where T is net tax payable; O is amount of output tax, R is amount of reverse tax and P is the amount of tax payable under sub-section (2) of section 4; and I is the amount of input tax. He also submitted that power to issue such clarification by the Finance Department and Tax Division is clearly there in clause 11 of the RIPS, 2003 and powers to review, appeal and revision by the State Government are contained in clauses 11, 12, 13 and 14 of the RIPS, 2003, respectively. Said clauses are reproduced herebelow for ready reference: 11. Authority for implementation/interpretation: All the related Departments shall implement the scheme. The Industries Department shall act as the nodal coordinating, monitoring and implementing Department. Any matter pertaining to interpretation of any clause of the Scheme shall be referred to the Government of Rajasthan in the Finance Department whose decision shall be f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is only net tax liability which is tax payable (VAT) as per heading of section 17 of the Act itself and even though the said term tax payable is not separately defined under section 2 of the Act or in RIPS, 2003, the only logical conclusion is that tax payable is net tax payable under the VAT Act. He also drew the attention of the court towards clause 7 of the RIPS, 2003 which clearly put limit of 50 per cent of the tax payable and deposited under the RST Act, CST Act or VAT Act, therefore, the word deposited would clearly amount to net tax liability as computed in accordance with section 17 of the Act. He also submitted that various clarifications 6 in number in the order dated October 10, 2008 have emphasized that benefit of subsidy under RIPS, 2003 would be payable after amount of tax in question is deposited by the assessee, so there is no question of relating the amount of subsidy to the gross output tax, but the deposited tax which only means net VAT after deducting input-tax credit. The learned counsel for the respondent-Department therefore, submitted that input-tax credit which is available to the petitioner-industry as per section 18 of the Act is to be set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith heading tax payable by a dealer on the other hand clearly provides that tax payable by dealer is only after deducing input tax and letter T which defines net tax payable is O (output tax) + R (reverse tax) + P (tax payable under section 4(2)) I (input tax). Therefore, the tax payable under the Rajasthan VAT Act, 2003 is nothing but net tax payable by the assessee or manufacturer as per section 17 of the Act. 10. In the considered opinion of this court, the clarification issued by the Finance Department (Tax Division) on October 10, 2008 is perfectly in consonance with the Rajasthan VAT Act, 2003 read with clause 7 of the Scheme-RIPS 2003 and the same cannot be said to be either without jurisdiction or bearing incorrect or erroneous interpretation of provisions of the Scheme or the VAT Act, 2003. Moreover, the subsidy provided under the RIPS, 2003 is a concession and there is no vested right of the assessee or manufacturer to claim a particular amount of subsidy up to a particular limit and the amount of subsidy could be curtailed or limited as has been done in clause 7 up to 50 per cent of the tax payable and deposited under the Rajasthan VAT Act, 2003 or CST Act,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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