9911796707
TMI Blog2019 (4) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... U.P. VAT Act but, no exemption under GST Act. It is not appropriate to accept the contention of respondent that the petitioner has an alternative remedy and the petitioner be relegated back as if aggrieved bythe order passed by the Commissioner, aspresently only notice under Section 4A-(3) of the Act is issued - The case of grant or rejection of exemption, should be decided at the earliest so that businessman can plan his business accordingly. The case in hand shows that four tax regime have changed and presently country in under new G.S.T. Regime, the old pending cases should be decided at the earliest which will be in the interest of both theparties i.e. petitioner as well as the State and we, therefore, reject the contention of the respondent for relegating back the petitioner to approach the Commissioner in pursuance of notice issued under Section 4-A(3) of the Act. The Divisional Level Committee, after considering the report submitted by the two independent authorities has rightly directed to include the investment made by the petitioner in fixed capital investment towards moulds,dyes and jigs, which were given by the petitioner to various vendors for manufacture of component ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its undertaken expansion,diversification, modernization within a periodprescribed and condition mentioned thereunder. The petitioner established a new unit withthe investment of more than ₹ 50 crores andcommenced its commercial production on9.3.1998. The petitioner was granted EligibilityCertificate for a period of 15 years from thedate of first sale i.e. 27.3.1998 or to theextent of 200% of the fixed capital investmenti.e. ₹ 1,02,75,90,892/-, whichever is earlier. The petitioner undertook the expansion withina period of five years from the date of originalinvestment enhancing monetary limit ofexemption mentioned in the EligibilityCertificate dated 23.10.1999 was enhanced toRs. 2,03,73,52,192/- for production of ColourTelevision, Air Conditioner and WashingMachine. By order dated 7.3.2003 passed byrespondent No. 4, further investment of ₹ 39,47,00,000/-made within the period of2001-02, which further enhanced the fixedcapital investment of ₹ 79,94,00,000/- wasadded in the Eligibility Certificate dated23.10.1999. The petitioner further made an investmentof ₹ 14,45,08,638/- for manufacture ofPrinted Circular Board (PCB) and Microwave byorder dated 27. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner and has remanded the matter torespondent No. 3 with the direction as to makean inquiry to the effect that moulds, dyes andjigs were being exclusively used formanufacture of components to be used by thepetitioner along with any other documents ormaterials. In pursuance of the remand order dated17.12.2013, a show cause notice dated 2ndDecember, 2014 was issued seekingexplanation from the petitioner to clarify andprovide material to show as to how moulds,dyes and jigs given to its suppliers/vendors formanufacture of components to be suppliedonly to the petitioner and such manufacturedcomponents were exclusively used by thepetitioner. In reply to the said show causenotice the petitioner submitted a detailed replyalong with the affidavits of the suppliers andvarious material to demonstrate moulds, dyesand jigs provided by it were used formanufacture of components for the petitioneronly and such manufacture components weresupplied back to the petitioner only and not toany other person. The petitioner also filedassessment orders of such suppliers andvendors. The Deputy Commissioner, IndustriesCenter, G. B. Nagar also issued notice to thepetitioner on 12.1.2015. The petitioner fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted by the respondent No. 2. It was alsoargued that no contrary evidence has beenproduced on record by respondent No.2disputing the material brought on record bythe petitioner to show the order grantingaddition of investment made towards moulds,dyes and jigs were not exclusively used formanufacture of components of the petitionerby the respective vendors. It was also argued by the counsel for thepetitioner that the order of the Tribunal hasbecome final. The petitioner is legally entitledfor addition of investment made in moulds,dyes and jigs, as provided under Section 4-Aof the U.P. Trade Tax Act, 1948 and therespondent No. 2 can not to be permitted tore-agitate the proceeding again under Section4-A(3) of the Act. The counsel for the petitioner has reliedupon various judgments, which are quoted asbelow:- (i) In the case of Mansarovar Bottling Co. Ltd. vs. CTT,1999 UPTC 864, this Court has held in para 6 as under: "6. Thus, by the amendment it has been clarified that theCommissioner can correct a legal or factual error made by theauthority granting the eligibility certificate. Thus, we have twoprovisions on the statute book; one is section 10(2) whichprovides for an appeal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a debatebetween the parties as to whether the new products Coca Colaand Fanta which admittedly have different composition from theearlier products can be described to be goods of the samenature or they are of a nature different from thosemanufactured earlier and since the notification dated July 27,1991 also provides for exemption in the case of a unitundertaking expansion, there has also to be a debate whethereven if the two type of goods were of the same nature theeligibility certificate granted to the revisionist should have beenfor expansion and not for diversification. Such an assumedmistake on which there is debate, and on which aspect of thematter, the Divisional Level Committee has taken a consciousdecision, cannot be said to be an error apparent on the face ofrecord and free from debate and the Commissioner can have nojurisdiction under section 4-A(3) of the Act to correct the errorhimself and must avail the procedure of appeal to the Tribunal. In my view, therefore, the Commissioner had no jurisdiction tocorrect the alleged error and cancel the eligibility certificate onthe ground that the new products were of the same nature asthe products being manufactured from bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to beexercised by the Sales Tax Commissioner or any of the officersof the sales tax department. If a party does not fulfill therequirements for the grant of exemption or reduced rate of tax,it would not be granted such exemption or even the eligibilitycertificate. In case it was wrongly issued, the power to cancel itwould be with the State Government or the officers mentionedabove. It is well established that the power to grant includes thepower to cancel. The Sales Tax Officer or the Sales TaxCommissioner have no such power to cancel the eligibilitycertificate, for they do not have the power to grant the same. The Commissioner of Sales Tax has a limited power to cancelthe eligibility certificate, where there is a misuse of facility forexemption or grant of a reduction of tax. But that is an entirelydifferent matter than the power to cancel eligibility certificate onthe ground that it was obtained on wrong premises. That powervested only in the State Government." (iv) Further, this Hon'ble Court in the case of Anil KumarRamesh Chandra Glass vs. State of U.P. 2000 (119) STC 305has held in para 10 as under:- "10. It is an admitted position that the Joint Director ofIndust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btained the certificate, in our view, doesnot give handle to the Sales Tax Officer to ignore the certificateuntil it is cancelled by the competent authority, i.e., the StateGovernment or any officer empowered by the State Governmentin this regard. In our view, if an applicant or industrial unit haswrongly obtained eligibility certificate by furnishing wronginformation, it is open to the Sales Tax Officer to move theauthority who has granted the eligibility certificate or anyappropriate authority empowered in this regard to review or tocancel the same but he cannot embark upon a fresh enquiry forhimself as to whether the petitioners were entitled to the grantof eligibility certificate or not. Further till the certificate is notcancelled, it is binding on the taxing authority and no tax can berealised from such small-scale industry on its turnover. Even theSales Tax Commissioner has limited power to cancel theeligibility certificate only where the facility of exemption hasbeen misused but not on the ground that it has been obtainedon wrong premises by furnishing wrong information. (v) Similar view was taken by a division Bench of thisCourt in the case of Kumar Fuels, Pucca Bagh, Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is necessary so to do forincreasing the production of any goods or forpromoting the development of [any] industryin the State generally or in any districts orparts of districts in particular, it may onapplication or otherwise, [in any particularcase or generally, by notification,] declare thatthe turnover of sales in respect of such goodsby the manufacture thereof shall, during suchperiod not exceeding [ten years] [from suchdate on or after the date of starting productionas may be specified by the State Governmentin such notification, which may be the date ofthe notification or a date prior or subsequentto the date of such notification, and where nodate is so specified] from the [date of first saleby such manufacture if such sale takes placewithin six months from the date of startingproduction and in any other case from thedate following the expiration of six monthsfrom the date of starting production], andsubject to such conditions as may be specified,by exempt from the sales tax [whether whollyor partly] or be liable to tax at such reducedrate as it may fix." The Sale Tax regime came to an end on 13thMay, 1994. Thereafter, Trade Tax regime cameinto force by U.P. Act No. 31 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal by order dated 17.12.2013has remanded the matter back to DivisionalLevel Committee with the direction to make aninquiry as to whether the moulds, dyes andjigs which were given by the petitioner tovarious vendors for manufacture ofcomponents were exclusively been used formanufacture of components of the petitionerand after manufacture of such componentswere supplied back only to the petitioner. After remand order of the Tribunal, noticeswere issued by G.M.D.I.C. and JointCommissioner (Executive), respondent Nos. 4and 5. A detail investigation and inquiry of therecord supplied by the petitioner (i.e.,certificate of Chartered Accountant, agreementwith the buyers, affidavits, suppliers invoices,list of moulds specification design &specification of parts to be manufactured frommoulds and disputed assessment orders,vendors suppliers invoices etc.) were made bythe two said authorities. The two authorities i.e. G.M.D.I.C. andJoint Commissioner (Executive) had submittedtheir independent reports in detail in favour ofthe petitioner. In their report it has specificallybeen mentioned that moulds, dyes and jigswere used exclusively from manufacture ofcomponents of the petitioner an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ammoniaand Liquor Ammonia manufactured by it in accordance with theprocedure prescribed under that Act. The details of theprocesses undertaken in producing the products were alsogiven. It was also drawn to the attention of the DCCT that theauthority to determine the eligibility under the G.O. Ms. was notthe Commercial Taxes Department, but the Department ofIndustries & Commerce. 13. Subsequently, the appellant filed a writ petition in theAndhra Pradesh High Court for a declaration that the appellantwas entitled to the benefits notified by the 1993 G.O. and thatthe pre-revision show cause notices issued by the DCCT for theyears 1995-1996 up to the 1999-2000, were illegal, void andunenforceable. 18. ......................................................................... In the present case, the grant of the eligibility certificate wasnot the outcome of an unconsidered decision based onextraneous considerations. The matter was considered in depthand sanctioned by the District Level Committee of which, as wehave already noted, the DCCT was a part. The appellant hadmade a full disclosure of the process undertaken in respect ofwhich sales tax exemption was granted. No malafides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Commissioner underSection 4-A (3) is not in dispute in the presentcase but, such a power has to be exercisedjudicially only. The judgment relied upon bythe parties are not of any help. The Tribunal while remanding the matterback to the Divisional Level Committee, hasrelied upon the judgment passed in Appeal No.38 of 2000 M/s Honda CL Cars India Limitedvs. Commissioner Trade Tax U.P., Lucknowwherein the similar controversy has beendecided in favour of the assessee. Once a legal issue which was alreadysettled by judicial pronouncement in the caseof Honda CL Cars (supra) the same cannot bepermitted to be re-agitated by using the powerunder Section 4-A(3) of the Act. If the respondent No. 2 was aggrieved withthe order passed by the Tribunal dated17.12.2013, it was always open for them tofile a revision under Section 11 of U.P. TradeTax read with Section 58 of U.P. VAT Act beforethe High Court. Once the respondent No. 2 chooses not tofile revision before the High Court against theTribunal's order of remand dated 17.12.2013,the same cannot be permitted to re-agitatethe matter by way of a proceeding underSection 4A-(3) of the Act. Further, the Commissioner-respondent No.2, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
