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TMI Blog2017 (2) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... entives to certain eligible industrial units and falling in Chapter-V-A of the BST Rules, 1959, are not comparable. Rule 31B is specific and clear in terms. Once the underlying difference as pointed out cannot be lost sight of, then, the argument based on discrimination has no merit. It may be that there is a credit of DEPB. That is an incentive provided under the Foreign Trade Policy and to an exporter. It may be a transferable benefit and treated as intangible goods liable to tax under the Sales Tax Act. The Court in this case cannot even issue a declaration as prayed as an alternate relief once it finds that the fundamental and underlying difference between the two schemes and the two modes is the factor and which has weighed with the State. That is the real basis and which distinguishes the case of the Petitioners from those units under the exemption mode. Once this difference is noted, then, we do not see any reason to interfere with the impugned Notifications. We do not see how we can grant a declaration that the mandate of Article 14 of the Constitution of India is violated and breached. Petition dismissed - decided against petitioner. - WRIT PETITION NO. 2517 OF 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 2004, the first Petitioner was assessed by the Deputy Commissioner of Sales Tax, Nasik Division, Nasik. He passed an assessment order dated 26th March, 2009. It is claimed by the Petitioners that in the said unit and during this period in addition to the sale of Electrodes manufactured by them, they sold Duty Entitlement Pass Book ( DEPB ) licenses granted to them as and by way of incentives for the export of Electrodes. The said licenses could be sold to another exporter who could utilize them for payment of import duty. The sales of DEPB were to the tune of ₹ 1,69,90,203/- and the tax thereon at ₹ 10,02,422/- was shown as payable. The payment thereof was deferred. However, the Assessing Officer did not allow deferral in respect of the tax on DEPB. In addition to the tax, he charged interest under Section 36 (3) (b) and issued a notice of demand for ₹ 38,61,622/-. He also passed an assessment order under the Central Sales Tax Act, 1956 for the same period and rejected the claim for deferral of Central Sales Tax in respect of inter-State sales of DEPB to the tune of ₹ 2,84,08,414/- and charged interest under Section 9(2) read with Section 36 (3) (b) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stries to set up their units in backward areas. The purpose is to grant them benefits and incentives so that they set up such units. The benefits that accrue to such units are in terms of payment of the applicable taxes. Either the unit can claim exemption or deferral. However, in the instant case according to Mr. Surte, the Eligibility Certificate holders who have opted for exemption and those who have opted for deferral are both dealing with the DEPB. That DEPB licence itself has been sold and by both of them. However, the DEPB is declared as finished product exempted in the hands of the industrial units who opt for exemption. But that DEPB is treated as taxable in the hands of the dealers who opted for deferral. This discrimination is, therefore, apparent. The classification as purportedly made has no nexus with the object sought to be achieved. For any classification to be justified, it must have such nexus and those grouped in and those left out ought to be on an intelligible differentia and which can be ascertained from the classification itself. In the instant case, there is no such intelligible differentia. Therefore, both units which are equally placed in every mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is larger latitude permissible for classification and State can choose whom to tax and whom not to tax in the best interest of the State. There is no scope for judicial review as held in the case of Amin Merchant v/s Chairman CBER (AIR 2016 SC 392) in decision of the Supreme Court on 22/07/2016. The same view is held after examining various authorities in case of Associated Cement Companies v/s Government of A. P. 2006 (1) SCC 597. 13. Mr. Sonpal, appearing on behalf of the Respondents submits that there is a basic fallacy in the arguments of Mr. Surte. Mr. Sonpal would submit that there is a distinction between those who are exempted from paying the sales tax for certain period and those seeking deferral under the package scheme of incentives. There are similar packages extended but they are not on par with each other. The Petitioners defer the payment of the sales tax. After having collected the tax on the sales, all that is required is to deposit it in the Government Treasury. However, that obligation is deferred in the case of parties like the Petitioners. Therefore, it may be that sale of DEPB licence is by both but the underlying distinction is the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds manufactured in the eligible unit, whether mentioned or not in the Eligibility Certificate granted to the dealer and on the sale of which no tax has been levied. Thus, the argument was that the deferral of the sales tax and which is the mode chosen by the Petitioners is left out and even if the units like the Petitioner choosing deferral mode, sold the DEPB, that would not be covered by the Notification. 16. To our mind, the Government of Maharashtra has declared various package scheme of incentives from time to time with the aim of dispersal of industries and for promoting industrial activities in the backward units of the State. Under the package scheme of incentives various benefits are available to the eligible units. One of the benefit being exemption from sales tax for certain period or deferment of payment of tax collected for a specified period. To give effect to the sales tax benefit under package scheme, the reference to this scheme stands incorporated in the sales tax legislation. The package scheme of incentives are therefore defined in the BST Rules, 1959. To give effect to the exemption mode under the package scheme, the Notifications were issued under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme of Incentives, 1993 and mentioned in the Eligibility Certificate, which are manufactured in the said unit up to the period by which monetary ceiling gets exhausted or till the last day of the period mentioned in the entitlement certificate whichever event occurs first beyond the period prescribed in rule29.] Rule.31B-Conditions for permission to defer payment of total amount of tax as per the return for a specified period being incentives to certain eligible Industrial Units- (d) permit an eligible Industrial unit which is a dealer Registered under the Act and which has been granted an Eligibility Certificate by the Maharashtra Energy Development Agnecy under the Power Generation Promotion Policy, 1998, to defer the payment of purchase tax payable on Purchase of raw materials as mentioned in Explanation II of this rule and sales tax payable on sales of finished products, as mentioned in Eligibility Certificate, which were manufactured in the said unit, upto the period by which monetary ceiling, specified in the Entitlement Certificate, gets exahausted or till the last day of the period mentioned in the Entitlement Certificate whichever events occurs first beyond the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such tax in respect of the period specified in conditions (b) and (bi) till the assessment of the period covered by the return is completed. (d) The payment of such tax according to the assessment order for the returns in respect of the period specified in condition (b) and condition (bi), or as the case may be, such tax payable according to the order, if any, that may have been passed under sections 35, 55, 57 or 62 in respect of the said assessment shall be deferred for a period not exceeding twelve years in respect of industrial units covered by clause (a) of sub-rule (1) or for a period not exceeding ten years in respect of industrial units covered by clauses (b) and (c) of sub-rule (1), and that such period would be computed from the last date for furnishing the last return or the period under assessment. After expiry of such period the amount payable according to the said order shall be payable by the eligible industrial unit in equal annual instalments not exceeding six such instalments in respect of the units covered by clause (a) of sub-rule (1) and not exceeding five such instalments in respect of units covered by clauses (b) and (c) of the said sub-rule (1), a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility certificate issued being cancelled or revoked by the implementing agency; (ii) if the eligible industrial unit contravenes any of the provisions of the Act or the rules made thereunder; (iii) Omitted (iv) if the certificate of entitlement issued by the Commissioner is cancelled or revoked; (j) the Commissioner shall issue a certificate of entitlement for availing the benefit of deferment of the tax payable by the eligible industrial unit on the basis of the eligibility certificate issued by the SICOM or the relevant Regional Development Corporation or the relevant District Industrial Centre, being the implementing agency for the said Package Scheme of Incentives of the government; (k) the certificate of entitlement issued by the Commissioner shall be liable to be canceled or revoked in the following circumstances, namely, - (i) the eligibility certificate issued by the implementing agency being cancelled or revoked; (ii) the eligible industrial unit contravenes any of the provisions of the Act or the rules made thereunder. Explanation I : For the purposes of this rule and rule 31C, eligible industrial unit means an industrial Unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permission to defer payment of total amount of tax as per the return for a specified period being incentives to certain eligible industrial units and falling in Chapter-V-A of the BST Rules, 1959, are not comparable. Rule 31B is specific and clear in terms. Once the underlying difference as pointed out cannot be lost sight of, then, the argument based on discrimination has no merit. It may be that there is a credit of DEPB. That is an incentive provided under the Foreign Trade Policy and to an exporter. It may be a transferable benefit and treated as intangible goods liable to tax under the Sales Tax Act. That is capable of being transferred by both, namely, the holders and beneficiaries of package scheme of incentives under exemption and deferral mode. However, insofar as the amendment and now incorporated by the Notification is concerned, that is restricted in its application to the beneficiaries of exemption mode. There is no compulsion that any such amendments have to be incorporated in Rule 31B. That is a distinct condition and restricted in its application to the unit holders choosing a deferral mode. If Rule 31B is not touched and has not been amended that does not mean tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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