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TMI Blog2021 (2) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, the Commissioner has to form an opinion that the order passed by any subordinate officer is either erroneous or is prejudicial to the interest of the revenue. In the light of the aforesaid facts, the order passed by the Joint Commissioner of Commercial Taxes may be seen - The Joint Commissioner of Commercial Taxes, in its order dated 15.07.2014, has considered the question whether the disallowance of income tax on food items, housekeeping and office maintenance, printing and stationery, maintenance of photocopying machine, sports goods and events, car lease rentals is proper. The Joint Commissioner of Commercial Taxes has taken note of Section 20(2) of the Act and has held that SEZ developer is eligible for input tax paid and doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Commissioner of Commercial Taxes has proceeded on the assumption that the benefit of refund of tax paid on purchase of inputs can be granted only in respect of manufacture and processing of goods which is not prescribed under the law. Therefore, in the fact situation of the case, there was no justification on the part of the Additional Commissioner of Commercial Taxes in invoking the power under Section 64(1) of the Act - Appeal allowed - decided in favor of appellant. - S.T.A. NO.155 OF 2016 - - - Dated:- 21-1-2021 - HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE NATARAJ RANGASWAMY APPELLANT (BY MR. T. SURYANARAYANA, ADV.,) RESPONDENT (BY MR. JEEVAN J. NEERALGI, ADV.,) JUDGMENT ALOK ARADHE J., Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. However, the Additional Commissioner of Commercial Taxes, in purported exercise of powers under Section 54(1) of the Act, by an order dated 03.10.2016, disallowed the inputs on the ground that the inputs are for any use and do not have any connection with the manufacture and processing of the goods. In the aforesaid factual background, the appellant has filed this appeal. 4. Learned counsel for the appellant submitted that under the EXIM Policy of 1997-2002, the Government of India had announced the concept of SEZs in order to provide an internationally competitive and hassle free environment of production of goods and services for exports. The SEZs are specifically treated as duty free enclaves free from all the rules and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he refund under Section 20(2) of the Act shall be subject to the condition that the inputs are purchased, inter alia, for the purpose of setting up, operation and maintenance of a unit in the SEZ and also in respect of the inputs purchased for use in manufacture, trading, production, processing, assembling, repairing, reconditioning, re-engineering or packing in a unit located in SEZ. Therefore, it is contended that is not the purchase of inputs which are used in manufacture, etc that are eligible for refund but also inputs which are used for the purpose of operation and maintenance of a unit in a SEZ are also eligible for refund. It is also pointed out that Section 2(19) of the Act which defines the expression 'inputs', not only in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner has to form an opinion that the order passed by any officer subordinate to him is erroneous or is prejudicial to the interest of the revenue. Thus, before exercising the powers under Section 64 of the Act, the Commissioner has to form an opinion that the order passed by any subordinate officer is either erroneous or is prejudicial to the interest of the revenue. In the light of the aforesaid facts, the order passed by the Joint Commissioner of Commercial Taxes may be seen. The Joint Commissioner of Commercial Taxes, in its order dated 15.07.2014, has considered the question whether the disallowance of income tax on food items, housekeeping and office maintenance, printing and stationery, maintenance of photocopying machine, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration or maintenance of a unit in the processing area of SEZ , the expression 'operation' has a different meaning as compared to the expressions used in Rule 130(A)(1)(c) i.e. manufacture, trading, production, processing, assembling, repairing, reconditioning, re engineering or packing in a unit. Thus, relying on the aforesaid decision of the Tribunal, the Joint Commissioner of Commercial Taxes has held that SEZ unit is also entitled to refund of input tax paid on inputs by a developer or an operator and also for the units located in the SEZ area for setting up of operation or maintenance of the unit. Therefore, it has been held that the appellant has satisfied the conditions mentioned in Rule 130(a)(1)(b) of the Rules. The Join ..... X X X X Extracts X X X X X X X X Extracts X X X X
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