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TMI Blog2015 (8) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 25.1.2008 the above reproduced question has been referred for opinion and answer of this Court by the Tribunal. That is on the footing that it is a question of law. According to the Tribunal, this question arises out of the order dated 18.3.2006 in Second Appeal No.557 of 2005 alongwith the Miscellaneous Application No.185 of 2006. 3. The few facts relevant for the purpose of the disposal of this application are that the applicant before us at whose instance this question is referred is duly registered under the Bombay Sales Tax Act,1959. It is a manufacturer of PVC Pipes. The applicant is holding Certificate of Entitlement granted under the Package Scheme of Incentives and opted for exemption mode of incentives. The applicant was assessed to tax for a period commencing from 1.4.2000 to 31.3.2001 by the Assistant Commissioner of Sales Tax on 18.6.2004. The applicant was granted exemption from payment of tax in respect of existing unit as well as the expansion unit. The Assessing Officer worked out the Cumulative Quantum of Benefits as per Rule 31AA of the Bombay Sales Tax Rules,1959 (hereinafter referred to as "the Bombay Rules"). The assessment order resulted in refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the fact that the copies of sales Invoices were produced. The sale price prior to the period of exemption is stated to be more or less equal. However, the Tribunal has wrongly and erroneously taken assistance of the language of Rule 46A. Thereby it has completely ignored the manner of calculation of CQB as stipulated by Rule 31AA. In these circumstances, he would urge that the question of law has to be answered in favour of the applicant and against the Revenue. 7. Mr.Thakar placed heavy reliance upon the Judgment of the Division Bench of this Court reported in "(2011) 41 VST, 436 (Bom.), (Prasad Power Control Pvt. Ltd. Vs. Commissioner of Sales Tax)". He would also rely upon the order passed following the ruling in this case in the matter of "Shakti Arora Exports Pvt. Ltd. Vs. State of Maharashtra, (56 VST 62.). Finally, reliance is placed upon the judgment of the Karnataka High Court in the case of "Deputy Commissioner of Commercial Taxes (Vigilance), Bangalore Vs. Hindustan Lever Ltd., ((2007)10 VST 330)(Karn.)". 8. On the well settled principles that the word "deemed" will have to be interpreted in such a way that the things which do not exist must be taken to be existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of CQB. Therefore, the question of law is required to be answered in favour of the Revenue and against the applicantdealer. The reference be disposed of accordingly. 10. With the assistance of Mr.Thakar and Mr.Sonpal, we have perused the reference application and the annexures thereto. We have proceeded on the footing that this reference can be disposed of without the assistance of the record and proceedings from the Tribunal. It is agreed by both sides that the question being referred from admitted facts and noted in both the orders of the Tribunal, then, there is no need to call for record and proceedings from the Tribunal's Registry. Though the Tribunal has failed to perform its duty and has merely forwarded the statement of case but not the original record and proceedings, in the light of this agreed position we proceed to answer the reference. 11. Upon perusal of both Rules, we find ourselves in agreement with Mr.Sonpal. There is no dispute on facts. The facts have been noted by us. The period for which the applicant was assessed was 1.4.2000 to 31.3.2001. That there is an entitlement certificated based on which the applicantdealer enjoyed tax exemption is undisputed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Entitlement on the sale of raw materials to the said dealer if the setoff under Rule 42 AC is not admissible to the said dealer in respect of such purchases : Provided that during the period from 15th April 1994 to 30th November,1994, the calculation shall be made at the rate of tax applicable to such goods as reduced by 4% from the applicable rate of tax: (c) a sum equal to the amount granted as drawback, setoff or, as the case may be, refund under rule 42AC to the said dealer; (d) a sum equal to 4 per cent of the turnover of inter-State sales of finished products manufactured by the said dealer in the eligible unit and specified in the Eligibility Certificate granted to him by the implementing agency and if the interState sales of such products are generally liable for Central Sales Tax at a rate less than 4 per cent then a sum calculated at such lower rate on the said turnover; (e) a sum equal to the amount of tax (including sales tax, additional tax, [surcharge] and turnover tax) which would have been payable to Government on any sales of products manufactured by the said dealer in the eligible unit and specified in the Eligibility Certificate granted to him by the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interState sales of finished products manufactured by the said dealer in the eligible unit of finished product specified in the eligibility Certificate granted to him, if the said dealer was not holding the said Certificate of Entitlement under Package Scheme of Incentives under 1993 Scheme, [or Power Generation Promotion Policy]] Provided that, for the purpose of calculation of the cumulative quantum of benefits received by the Mega Project, a sum equal to 1 per cent of the turnover of interState sales of goods by the said dealers, covered by subsection (1) of section 8 of the Central Sales Tax Act,1956 and specified in the Eligible Certificate granted to him, shall be included in the aggregate to be calculated under clause (a) above.] [(4) If any dealer holding a Certificate under entry 136 or as the case may be entry E-3 of the Schedule to the notification, issued by the State Government under section 41 of the Act, has for the purpose of entry 10 of Group-E of the Schedule to the said notification has agreed to calculate the cumulative quantum of benefit on the maximum retail price specified in condition at serial number 3 in column (4), then for the purpose of clause (e) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods) if applicable. T= Rate of Turnover Tax, if applicable, to the sale of the goods.] Provided that for the purpose of subclause (ii) of clause (b), "sale price" means sale price reduced as per the provisions of rule 46B and rule 46C wherever applicable.] [(c) in respect of any sale effected on which resale tax under section 10 is payable by him either (i) exclude the amount, if any, collected by him separately by way of resale tax from the same price on which resale tax is leviable, or (ii) if he has not collected separately any such amount by way of resale tax but has reimbursed himself in respect of resale tax liability in the sale price itself, deduct from such sale price a sum calculated in accordance with the formula given in the Table hereunder: TABLE The formula shall be as follows:" TABLE The formula shall be as follows:- R 100 + R 'R' means the rate of tax (other than retail sales tax, applicable to the sale of goods, that is to say, where the sale price is liable only to sales tax, the rate of sales tax, and where it is liable only to general sales tax, the rate of general sales tax, and where it is liable to sales tax and general sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the 1983 Package Scheme of Incentives. Before us the applicantdealer satisfied this criteria. The calculation of cumulative quantum of benefits in the applicant's case shall be aggregate of the sums set out in Rule 31AA(2)(a) to (e) and we are concerned with clause (e) of subrule (2). That refers to a sum equal to the amount of tax which would have been payable to Government on any sales of products manufactured by the said dealer in the eligible unit and specified in the Eligibility Certificate granted to him by the implementing agency. The Tribunal concluded that this assessment and covered by clause (e) cannot be made in the case of the present applicant simply because the applicant is not required to pay any tax to the Government. The reason why this conclusion was reached because if there is an exemption enjoyed by the applicant, then, the sale price would not include the tax element. Thus, the conclusion reached is that for the purposes of clause (e) of subrule (2), the requirement would be a sum equal to the amount of tax which would have been payable to Government on any sale of products manufactured by the said dealer in the eligible unit and specified in the Eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished as per the Government Resolution dated 30th September,1988 which provides for a mechanism to calculate the notional sales tax liability of a unit covered under the 1988 Package Scheme of Incentives, whether a different mechanism for calculating the notional sales tax liability can be introduced with retrospective effect from 1st January,1980 by inserting section 41B in the Bombay Sales Tax Act and Rule 31AA to the Bombay Sales Tax Rules. That is urged to be defeating the rights vested in the Units established under the 1988 Scheme prior to insertion of Rule 31AA. It is in dealing with such a challenge and finding inconsistency in the language of paragraph 2.11 of the 1988 Government Resolution and the Rule, that the Division Bench reached the above conclusion. We cannot, therefore, read the conclusion in paragraphs 28 to 30 relied upon by Mr.Thakar out of context and in isolation. This is clear from further reading of this judgment and particularly paragraphs 31 and 32 thereof. In such circumstances, the judgment must be read as confined to the facts and the challenge dealt with by the Division Bench. 16. The decision in "Shakti Arora Exports Pvt. Ltd. Vs. State of Maharash ..... X X X X Extracts X X X X X X X X Extracts X X X X
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