Statutory tax concession preserved under an incentive scheme allows set-off of excess input tax despite general prohibitions.

An industrial unit covered by the Rajasthan Sales Tax Incentive Scheme, 1989 could still claim set-off of excess tax paid on raw material purchases where the scheme's clause 4(c) barred deductions and refunds but expressly saved concessions available under the Act. The court treated the scheme and the Act as operating together and held that, once entitlement to concessional purchase tax under sections 5C and 5CC was established, denying set-off would defeat the preserved statutory concession. The saving clause therefore controlled the general prohibition, and the assessee's set-off claim was upheld.

---

---

Issues: Whether an industrial unit enjoying exemption under clause 4(c) of the Rajasthan Sales Tax Incentive Scheme, 1989 was still entitled to set-off of excess tax paid on purchases of raw materials where the Act preserved concessions available under sections 5C and 5CC.

Analysis: Clause 4(c) bars deduction, drawback, set-off, partial exemption or refund in respect of purchases, but its second part expressly saves different concessions available under any section of the Act. The decisive question was whether the assessee had an independent statutory entitlement to purchase inputs at concessional rate under sections 5C and 5CC and, if so, whether excess tax paid beyond that concessional rate could be neutralised by set-off despite the scheme restriction. The Court followed the earlier co-ordinate Bench view and held that once entitlement to concessional purchase tax is established, denial of set-off would render the saved statutory concession ineffective. The scheme and the Act were treated as operating together, with the saving clause controlling the general prohibition.

Conclusion: The assessee was entitled to claim set-off of excess tax paid on purchases of raw materials notwithstanding the general prohibition in clause 4(c).

Final Conclusion: The Revenue's revisions failed because the incentive scheme could not be read to defeat a concession expressly preserved under the Act, and the assessee's benefit of set-off was upheld.

Ratio Decidendi: Where an incentive scheme both restricts set-off and expressly saves statutory concessions available under the Act, excess tax paid on inputs at a rate higher than the concessional statutory rate remains eligible for set-off once the underlying concessional entitlement is established.

---