1999 (8) TMI 931 - HC - VAT and Sales Tax

Court grants sales tax exemption, promotes industrialization, upholds committee decisions, orders refund.

Gujarat Ambuja Cement Ltd. and Another Versus Assessing Authority-Cum-Assistant Excise and Taxation Commissioner and Others

The court allowed the writ petitions, setting aside the revisional authority's orders and confirming the petitioner's entitlement to exemption from sales ... - Issues Involved:1. Entitlement to exemption from sales tax under the Himachal Pradesh General Sales Tax Act, 1968 and the Central Sales Tax Act, 1956.2. Validity of the revisional authority's order cancelling the exemption certificate.3. Compliance with the eligibility criteria for being classified as a 'prestigious cement industrial unit'.4. Alleged violations of the provisions of the Himachal Pradesh General Sales Tax Act, 1968 and the Central Sales Tax Act, 1956.5. Procedural propriety in the issuance of the exemption certificate.Issue-wise Detailed Analysis:1. Entitlement to Exemption from Sales Tax:The petitioner-company sought exemption from sales tax under the notification dated January 30, 1996. The court held that the petitioner satisfied the eligibility criteria and was entitled to the exemption from the date of commencement of commercial production, i.e., September 26, 1995. The court emphasized the need to interpret the incentive scheme liberally to promote industrialization and economic growth in the state.2. Validity of the Revisional Authority's Order:The revisional authority's order dated February 8, 1999, which annulled the exemption certificate, was challenged. The court found the revisional authority's action to be without jurisdiction, as the empowered committee's decision to grant the prestigious status was final and binding. The court held that the revisional authority could not review or annul the decision of the empowered committee. Consequently, the revisional authority's order was set aside.3. Compliance with Eligibility Criteria:The court examined whether the petitioner fulfilled the eligibility criteria for being classified as a 'prestigious cement industrial unit.' The petitioner had been registered as a prestigious unit on January 13, 1993, and later as a prestigious cement unit on February 2, 1996. The court held that the criteria of capital investment and employment were satisfied, and the registration was valid. The court rejected the respondents' argument that the registration was of a mere project on paper and not a functional unit.4. Alleged Violations of Sales Tax Provisions:The respondents alleged that the petitioner violated the provisions of the Himachal Pradesh General Sales Tax Act, 1968, and the Central Sales Tax Act, 1956, by not paying purchase tax on limestone and shale and by not submitting proper C forms. The court held that the exploitation of minerals under a mining lease did not constitute a sale or purchase to attract purchase tax liability. Regarding the C forms, the court found that the non-submission or defective submission of C forms could only result in the denial of concessional rates, not the total exemption. The court concluded that there was no violation of the provisions that would disentitle the petitioner from the exemption.5. Procedural Propriety in Issuance of Exemption Certificate:The court addressed the procedural issues raised by the revisional authority, such as the lack of separate orders for the Himachal Pradesh General Sales Tax Act and the Central Sales Tax Act and the alleged lack of proper enquiry before issuing the exemption certificate. The court found these procedural lapses to be minor and not sufficient to annul the exemption certificate. The court emphasized that the competent authority's decision, based on the empowered committee's findings, was valid and binding.Conclusion:The court allowed the writ petitions, setting aside the revisional authority's orders and confirming the petitioner's entitlement to the exemption from sales tax from September 26, 1995. The court emphasized the importance of promoting industrialization through liberal interpretation of incentive schemes and upheld the finality of the empowered committee's decisions. The respondents were directed to refund any deposits made by the petitioner as a condition for stay during the pendency of the writ petitions.