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TMI Blog2016 (9) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of cancellation of exemption certificate even though the first appellate authority vide order dated 21.12.2006 had held that tax is recoverable w.e.f. 1.7.2000 and the same had attained finality? (ii) Whether on the facts and in the circumstances of the case, the order of first appellate authority dated 21.12.2006 (A-7) operates as res-judicata between the parties as the same had neither been challenged by any of the parties and thus, recovery of tax prior to 1.7.2000 is bad in law? (iii) Whether on the facts and in circumstances of the case, the order of Assessing Authority raising demand is violative of principles of judicial discipline? (iv) Whether on the facts and in the circumstances of the case, the Ld. Tribunal was justified in making recovery of the tax in terms of Rule 28-A(10)(v) even though the Exemption Certificate has not been cancelled during its validity? (v) Whether the Ld. DETC could have cancelled the Exemption Certificate vide his order dated 25.10.2006 even though the Exemption Certificate had already lost its validity on 30.6.2000 as per Rule 28-A(6)(b)?" 4. Learned counsel for the appellant submitted that the appellant had set up an industrial un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xation Commissioner (Appeals). The Appellate Authority vide order dated 21.12.2006, upheld the order while noticing the contention raised by learned counsel for the appellant that even though the exemption certificate was cancelled with effect from 1.7.2000, still the assessing authority was demanding the entire amount of tax, even for the period prior thereto. The Appellate Authority upheld the order while noticing that in case the impugned order was being wrongly interpreted by the assessing authority, the order cannot be faulted with. 5. Learned counsel for the appellant further submitted that thereafter vide order dated 11.2.2010, the assessment of the appellant for the year 1997-98 was framed for the first time and demand of tax and interest was raised noticing the fact that the exemption certificate granted to the appellant was not renewed after 1.7.2000. The unit had stopped production. Aggrieved against the order of assessment, the appellant preferred appeal before the Joint Excise & Taxation Commissioner (Appeal), who vide order dated 31.5.2013 dismissed the same. The appeal of the appellant before the Tribunal also met the same fate as the same was dismissed vide order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be renewed on year to year basis. However, he submitted that when the matter was taken up before Hon'ble the Supreme Court by the State against the aforesaid judgment, Hon'ble the Supreme Court in State of Haryana and others vs A. S. Fuels Pvt. Ltd. And another (and other appeals) (2008) 16 VST 546 opined that even in that case the entire amount of benefit availed of by the industrial unit can be recovered. Facts in that case were distinguishable as it had come on record that in that case even the eligibility certificate of the party before Hon'ble the Supreme Court had been cancelled. In the case in hand, though the proceedings were initiated for cancellation of eligibility certificate, however, the matter was dropped by the Lower Level Screening Committee. 9. Learned counsel for the appellant further referred to a Division Bench Judgment of this Court in M/s Stella Industries (P) Limited vs State of Haryana and others (2007) 29 PHT 54, where this Court opined that the eligibility certificate cannot be withdrawn after expiry of its currency period. The same was upheld by Hon'ble the Supreme Court as Special Leave to Appeal (Civil) No. 11053 of 2007 State of Harya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers vs M/s The Patiala Cooperative Sugar Mills Limited, Rakhra, District Patiala, decided on 26.2.2014 and GSTR No. 9 of 2011 M/s Mahavir Techno Ltd., Kurukshetra vs State of Haryana, decided on 30.3.2016. 12. As regards the demand raised under the Central Act is concerned, it was submitted that during the period of exemption, the appellant did not charge any tax as per the provisions under the Rules. There is nothing provided for under the Central Act or the notification issued thereunder for demand of tax at any subsequent stage by a dealer, who had claimed the benefit thereof. Hence, no demand can be raised. 13. On the other hand, learned counsel for the State submitted that Rule 28A(9) of the Rules provides for cancellation of exemption/ entitlement certificate under certain specific circumstances. It does not provide for any date from which it could be cancelled. Cancellation means from day one. It was not a case of non-renewal. The consequence of cancellation of exemption / entitlement certificate has been provided for under Rule 28A(10)(v) of the Rules. In the case of the appellant, it had stopped production in the year 2000, during even currency of its eligibility period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) to (3) xx xx xx (4) If a dealer, having furnished returns in respect of a period, fails to comply with the terms of a notice issued under sub-section (2), the assessing authority shall, within five years after the expiry of such period, proceed to assess, to the best of his judgment the amount of the tax due from the dealer. (5) If a dealer does not furnish returns in respect of any period by the prescribed date, the assessing authority shall, within five years after the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed to assess, to the best of his judgment, the amount of tax, if any, due from the dealer. Rules 28A(2)(j)(k), (6) to 11 of the Rules "Rule 28A(2)(j) '"eligibility certificate" means a certificate granted in Form ST-72 by the appropriate screening committee to an eligible industrial unit for the purpose of grant of exemption/ deferment; Rule 28A(2)(k) "exemption certificate" means a certificate granted in Form ST-73 by the Deputy Excise and Taxation Commissioner of the district to the eligible industrial unit holding eligibility certificate which entitles the unit to avail of exemption from the payment of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Industries or The General Manager, District Industries Centre as the case may be and one copy shall be retained in the record. The certificate issued shall be valid unless cancelled or withdrawn from the date of commercial production or from the date of issue of entitlement/exemption certificate, as the case may be, to the 30th June next or when notional sales tax liability first exceeds the quantum of tax exemption/deferment fixed for the unit, whichever is earlier. Note: The agreement or the mortgage deed or the bank guarantee, as the case may be, is an important document and shall be entered in a register to be maintained in Form ST-75 by the Deputy Excise and Taxation Commissioner concerned in his personal custody. At the time of transfer of the charge of his office, the Deputy Excise and Taxation Commissioner shall hand over the register as well as the documents to his successor personally against proper receipt and shall send a certified copy of the same to the Excise and Taxation Commissioner by name who will acknowledge its receipt to both the officers. (7)(a) The exemption certificate or the entitlement certificate, as the case may be, shall be renewed from year to ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty days of the communication of the order appealed against. (8)(a) The eligibility certificate granted to an industrial unit shall be liable to be withdrawn at any time during its currency by the appropriate screening committee, in the following circumstances - (i) if it is discovered that it has been obtained by fraud, deceit, misrepresentation, mis-statement or concealment of material facts; (ii) discontinuance of its business by the unit or closing down of its business for a continuous period exceeding six months except in case of fire, flood and other natural calamities, riots, strike or lock-out which in the opinion of the committee concerned is beyond the control of the unit; (iii) disposal or transfer by the unit of any of its fixed assets adversely affecting its manufacturing or production capacity : Provided that no order of withdrawal of the eligibility certificate shall be made without affording a reasonable opportunity of being heard to the affected unit. (b) When the eligibility certificate is withdrawn, the exemption/entitlement certificate shall be deemed to have been withdrawn from the 1st day of its validity and the unit shall be liable to payment of tax, int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or exemption/entitlement certificate before it is due for expiry, the entire amount of tax exempted/ deferred shall become payable immediately, in lumpsum, and the provisions relating to recovery of tax, interest and imposition of penalty shall be applicable in such cases. (11)(a) The benefit of tax-exemption/deferment under this rule shall be subject to the condition that the beneficiary/industrial unit after having availed of the benefit, - (i) shall continue its production at least for the next five years not below the level of average production for the preceding five years, and (ii) shall not make sales outside the State for next five years by way of transfer or consignment of goods manufactured by it. (b) In case the unit violates any of the conditions laid down in clause (a), it shall be liable to make, in addition to the full amount of tax-benefit availed of by it during the period of exemption/deferment, payment of interest chargeable under the Act as if no tax exemption/deferment was ever available to it : Provided that the provisions of this clause shall not come into play if the loss in production is explained to the satisfaction of the Deputy Excise and Taxation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g thereto. It further provides that on cancellation of eligibility or exemption/ entitlement certificate before it is due for expiry, the entire amount of tax exempted/ deferred shall become payable in lumpsum. The provisions relating to levy of interest and penalty shall also be applicable. 23. Sub-rule (11) of Rule 28A of the Rules provides that the benefits availed under Rule 28A of the Rules shall be subject to the conditions that the beneficiary unit after availing the benefit remains in production for next five years not below the level of average production for the preceding five years and shall not make any sales outside the State by way of consignment of goods for next five years. In case of violation of the conditions, full amount of tax availed of during the period of exemption shall be recoverable along with interest. 24. Withdrawal of eligibility certificate or cancellation of exemption/ deferment certificate may be during its currency as envisaged in Rule 28A(8) and 28A(9) of the Rules but Rule 28A(11) of the Rules operates after the expiry of both the certificates. It contains conditions which are applicable after the entire benefit has already been availed of. 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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