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TMI Blog2016 (7) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... r under the provisions of the earlier law, would be eligible. Thus, the basic eligibility required a registered dealer to be a manufacturer of specified goods and should have obtained eligibility certificate from Khadi Commissioner or Khadi Board as the case may be and exemption certificate from the Commissioner under the provisions of the earlier law prior to 01.04.2006. Paragraph No.2 of the notification provides the procedure for claiming such refund. Clause1 thereof requires the eligible dealer to apply in prescribed format within 30 days from the date of issue of the notification. Upon receipt of such application, the Commissioner would issue entitlement certificate provided the conditions of the notification were fulfilled. Paragraph 3 pertains to general conditions. Clause 3 thereof provides that the refund would be granted with effect from 01.04.2006 for the period specified in the eligibility certificate issued by the appropriate authority or till the manufacturer of the goods does not exceed the quantity approved by the appropriate authority as specified in the eligibility certificate whichever occurs earlier. As per Clause4 of paragraph 3, the refund would be granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler if the same were to be withdrawn, that too for no fault on his part - wherever despite the notification dated 27.02.2009, the benefit of exemption was granted on the basis of eligibility certificate renewed by the Khadi Commissioner or Khadi Board and on the basis of which, certificate of exemption was also granted by the Commissioner, such benefits cannot be withdrawn. Appeal allowed in part. - TAX APPEAL NO. 444 of 2015 With SCA NO. 12392 of 2015 With SCA NO. 6523 of 2016 With SCA NO. 7692 of 2016 With SCA NO. 7711 of 2016 With SCANO. 9324 of 2016 With SCA NO. 7041 of 2016 With SCA NO. 7045 of 2016 With SCA NO. 12306 of 2016 - - - Dated:- 22-7-2016 - HONOURABLE MR.JUSTICE AKIL KURESHI AND HONOURABLE MR.JUSTICE A.J. SHASTRI MR.S.N.SOPARKAR, LD. SENIOR ADVOCATE with UCHIT N SHETH, ADVOCATE FOR THE APPELLANT MR.TIRTHRAJ PANDYA, AGP FOR THE OPPONENT COMMON ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. In this group of cases, similar questions are involved. Tax Appeal No.444 of 2015 being a lead matter, we may refer to facts arising in this case. 2. Brief facts are as under. 3. The appellant Shree Shiv Shakti Oil Mill is a prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not accept the principal challenge of the petitioners to the withdrawal of the exemptions by the Government. The prayer for a direction to extend such exemption was rejected. The Court concluded as under: 201. Therefore, in light of the discussion made hereinabove, the present petitions are hereby allowed partly. Prayer in terms of para 7(c) in Special Civil Application No. 23720 of 2006 is granted. The impugned Notifications dated 31.3.2006, by which the earlier Notifications dated 29th April, 1970 1st April, 1992 have been rescinded, are hereby quashed and set aside in all these petitions and the original certificate at Annexure-G granting exemption for the period from 1.12.2005 to 30.11.2008 would remain in force till it expires. 202. However, the rest of the prayers regarding issuance of Writ of Mandamus or writ in the nature of mandamus directing the respondents to grant exemption or to make available to the petitioners the exemption under the newly substituted VAT Act, and also seeking prayer to grant exemption to the industries of the petitioners under the provisions of the VAT Act from the date of coming into force of the VAT Act, cannot be granted, nor any suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the 1st April, 2006 from the Khadi and Village Industries Commission or Gujarat Rajya Khadi and Gramodhyog Board (hereinafter referred to as the appropriate authority) and the Exemption Certificate from the Commissioner under the provisions of earlier law. 2. Procedure (1) The eligible dealer referred to in condition 1 shall apply in form KVIC1 appended to this notification to the Commissioner within thirty days from the date of issue of this notification. (2) On receipt of such application, the Commissioner may, subject to the provisions of this notification issue a certificate of entitlement in Form KVIC2 appended to this notification, for the period and on the terms and conditions mentioned in the eligibility certificate granted by the appropriate authority. 3. General conditions (1) The eligible dealer entitled to refund under section 40 shall make an application in Form 306 to the Commercial Tax Officer to whom he has furnished such returns. (2) Subject to the provisions of section 11, the certified manufacturer Shall be entitled to refund of tax on purchases of taxable goods other than the capital goods. (3) The refund shall be granted with effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate by the Board for the period between 17.06.2005 to 16.06.2008. The appellant was also granted certificate of exemption by the Assistant Commissioner of Sales Tax at the relevant time. In terms of the notification dated 27.02.2009, the assessee applied for certificate of entitlement which was granted by the Commercial Tax Officer on 08.01.2010 for the said period between 17.06.2005 to 16.06.2008. The Board extended the eligibility of the appellant from 17.06.2008 to 16.06.2011. On the basis of such renewal of eligibility, the Commercial Tax Department also granted extension of certificate of entitlement upto 16.06.2011 by amending the original certificate dated 08.01.2010. Yet again the Board extended the eligibility of the assessee from 17.06.2011 to 16.06.2014 and the Commercial Tax Department also extended the certificate of entitlement upto 16.06.2014. 10. On 27.12.2013, the Assistant Commissioner of Commercial Tax issued a show cause notice to the appellant, in which, he pointed out that as per Government Resolution dated 07.03.2009, exemption would be available only to those units who have been granted eligibility certificate by the Board and the entitlement certificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Gujarat Value Added Tax Tribunal was justified in confirming the cancellation of certificate of entitlement granted to the appellant under the Value Added Tax Act, 2003 with retrospective effect from 17th June, 2008? (3) Whether the certificate of entitlement granted under the Value Added Tax Act, 2003 could have been cancelled in exercise of powers under the notification issued under the Gujarat Sales Tax Act, 1969? 15. Writ petitions arise in substantially similar background. Only difference being that the petitioners therein had approached the Value Added Tax Tribunal by filing revision petitions which came to be dismissed. Against such judgments, they have therefore filed writ petitions. 29.07.2016 16. In background of such facts, learned counsel for the appellant submitted that the notification dated 27.02.2009 was sufficiently clear and in plain terms, extended the benefit of exemption to all Khadi and village industries concerning the specified goods who had obtained the eligibility certificate prior to 01.04.2006 from the Khadi and Village Industries Commission or Gujarat Rajya Khadi and Gramodhyog Board, as the case may be. This notification nowhere prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, long after its benefit had been availed by the appellant or at all. The view taken by the High Court in the judgment to which we have referred to is correct, and is borne out by the decision of this Court aforementioned. In case of Ikon Orogchem v. Sales Tax Officer (1) 5 State of M.P. And Another, passed in Special Civil Application No.7168 of 2004, in which, it was observed as under: 11. The facts of the present case, wherein the eligibility certificate is sought to be amended without any justification, that too, long after its benefit had been availed by the petitioner would be squarely covered by the aforesaid decision. Under the circumstances, the impugned amendment certificate dated 9th October, 2001 as well as the order dated 15th April, 2004 cannot be sustained. In case of Sheth and Co. Textile Pvt. Ltd. v. State of Gujarat, passed in Special Civil Application No.3510 of 1990, in which, it was observed as under: 6. Having heard the learned counsel for the parties, we find that it is not the case of the respondents that there was any misrepresentation on the part of the petitioner. It was the decision of the authorities in 1983 to classify the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is concerned, the Court rejected the challenge. It was held that writ of mandamus cannot be issued. The issue of granting exemption under the newly enacted VAT Act would be a legislative function of a policy matter to be decided by the Government as to how said benefit should be extended. 21. This judgment therefore, while refusing to issue mandamus to the Government to grant exemption, did not, as obviously it would not, limit the powers of the Government to grant any such exemption if it was otherwise found necessary or expedient. This is precisely what was observed by the Division Bench in case of Janseva Khadi Gramodhyog Sangh (supra) as under: 12.1 This, however, does not mean that the petitioner was precluded from applying for fresh exemption as per the Government policy. When the Government itself came up with exemption Circular dated 7.3.2009, the petitioner was eligible to apply for exemption and entitled to be considered in terms of such circular. The Division Bench in the case of Kishorkumar Prabhudas Tanna Anr. [Supra] never envisaged that there shall be no further exemptions from the payment of Value Added Tax, even if the Government desired to do so. All th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides that the refund would be granted with effect from 01.04.2006 for the period specified in the eligibility certificate issued by the appropriate authority or till the manufacturer of the goods does not exceed the quantity approved by the appropriate authority as specified in the eligibility certificate whichever occurs earlier. As per Clause4 of paragraph 3, the refund would be granted only for the purchases used in manufacturing of specified goods sold within the time limit mentioned in clause3. 25. It can thus be seen that this notification had a direct relation to and was a fall out of the judgment of this Court in case of Kishorkumar Prabhudas Tanna (supra) under which, the Court had declared that the withdrawal of the exemptions with the introduction of the VAT would not apply to the dealers where previously the eligibility certificates were already issued upto the period when the certificate was valid. Upon close perusal of this notification, we do not gather any intention on part of the government that in case of such industries who had obtained the eligibility certificate from the Khadi Commissioner or the Khadi Board and exemption certificate from the Commissioner pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 01.04.2006 for the period specified in eligibility certificate issued by the appropriate authority till the dealer exhausts the quantity approved in the eligibility certificate. This reference to the refund being granted for period between 01.04.2006 till the period specified in the eligibility certificate is of great significance. It limits the period of exemption till the period specified in the eligibility certificate. The exemption was thus clearly envisaged between 01.04.2006 and till the end of period of eligibility certificate, or sooner if the dealer exhausted the quantity approved in the eligibility certificate. Under clause (4) of para 3, the refund would be granted only for the purchases used in manufacturing of specified goods sold within the time limit mentioned in condition No.3(3). 27. All these conditions therefore, necessarily refer to the validity of the eligibility certificate granted by the appropriate authority prior to 01.04.2006. The object of the authority issuing this notification therefore, was to lay down a uniform procedure for grant of refund of tax to those industries who were enjoying the eligibility and exemption certificates as on 01.04.2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds to hold that the retrospective withdrawal of the exemption certificates were bad in law. 29. Quite apart from this, we cannot lose sight of the fact that the tax in question being an indirect tax, if it is otherwise not exempt, it is always open for the dealer to pass on the same to the successive dealer or the consumer as the case may be. Having granted such exemption, it would cause enormous financial hardship to the dealer if the same were to be withdrawn, that too for no fault on his part. We may notice that under section 80 of the VAT Act, the Commissioner has the power to determine disputed questions when brought before him by an assessee. Sub section (2) of section 80 provides that the Commissioner while doing so, may direct that the determination shall not affect the liability of any person with respect to any sale or purchase affected prior to the determination. Subsection (2) of section 80 therefore, brings in the concept of avoiding retrospective effect of the determination under section under subsection (1). We are conscious that the said provision would not directly apply in the present case. However, taking cue from the said provision and the judgment of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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