TaxTMI 
TaxTMI 
2011 (2) TMI 1256
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctory at Salt Lake on 1st July, 1993 and obtained eligibility certificate under Section 1OF of the Bengal Finance (Sales Tax) Act, 1941 for deferment of tax for a period of seven years. The respondent no. 1/company subsequently expanded the factory by setting up a new unit in the selfsame plot of land and the expanded factory started commercial production from 1st November, 1996. The said expanded factory obtained eligibility certificate under Section 41 of the West Bengal Sales Tax Act, 1994 for deferment of tax for a period of seven years on 30th January, 1997 and subsequently, the said company set up another unit at Durgapur being the expansion of the original existing unit situated at Salt Lake and on 31st December, 1999 the respondent no. 1 got eligibility certificate for the expanded unit at Durgapur for remission of tax for a period of 15 years. The respondent no. 1/company again set up second expanded unit in the same place at Salt Lake where the original unit and the first expanded unit were in existence and from March 5, 2003 the second set up unit started commercial production. On 30th April, 2003 the said second expanded unit also obtained eligib....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the expiry of the incentive granted, the industrial unit can stand on its own feet. According to the Mrs. Roy, the learned Tribunal below failed to appreciate that in the absence of the original unit, there could not exist an expanded portion thereof. In other words, Mrs. Roy contended that an expanded unit could not exist independently and in isolation when the original unit has ceased to operate. She, therefore, prays for setting aside the order passed by the learned Tribunal below. Mr. Bajoria, the learned senior counsel appearing on behalf of the respondent no. 1, however, has opposed the aforesaid contention advanced by Mrs. Roy and has contended that in view of Section 40 of the West Bengal Sales Tax Act, 1994, the expression "existing industrial unit" means an industrial unit which exists in West Bengal and manufactures goods in such unit immediately before it starts commercial production in its expanded portion on or after the appointed day and the "expanded portion" in relation to an existing industrial unit means the portion expanded with additional capacity on or after the appointed day with the approval of the State for manufacture of goods in West Bengal, eith....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the manufacture of goods in West Bengal, either in its existing location or in a different area;" (Emphasis Supplied by us) "Rule 146: Requirement of the certificate of eligibility for claiming deferment of payment of tax or remission of tax - No registered dealer shall be eligible for claiming deferment of payment of tax under sub-section (1) of section 40 or remission of tax under sub-section (1) of section 41 and the rules made thereunder unless he obtains and possesses a valid certificate of eligibility referred to in rule 148 or rule 149." "Rule 147" Manner and form of application for certificate of eligibility for deferment of payment of tax or remission of tax - A registered dealer who intends to claim deferment of payment of tax under sub-section (1) of section 40 or remission of tax under sub-section (1) of section 41, as the case may be, shall, within thirty days from the date of issue of certificate of registration granted to him under sub-section (5) of section 26 or section 27, or within thirty days from the commencement of the eligible period under rule 103, rule 116, rule 129 or rule 138, as the case may be, whichever is later, make an application in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., for renewal of his certificate of eligibility for a further period. (2) If the Deputy Commissioner or the Assistant Commissioner, as the case may be, is satisfied that the dealer is eligible for deferment of payment of tax under sub-section (1) of section 40 or remission of tax under sub-section (1) of section 41, as the case may be, and the rules made thereunder, he shall renew the certificate of eligibility for a period not exceeding twelve months from the date immediately following the date on which the validity of such certificate has expired. (3)When the Deputy Commissioner or the Assistant Commissioner, as the case may be, is not satisfied that the dealer is eligible for deferment of payment of tax under sub-section (1) of section 40 or for remission of tax under sub-section (1) of section 41, as the case may be, he shall, after giving the dealer a reasonable opportunity of being heard, reject the application for renewal for reasons to be recorded in writing. (4)If there is a change in the gross value of fixed capital assets subsequent to the issue of a certificate of eligibility, the dealer holding such certificate shall inform the Deputy Commission....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 41 shall maintain such vouchers or documents as may be required to prove the amount of value of fixed capital assets referred to in clause (d) of the Explanation to section 40. (2) Subject to the provisions of section 62 and the rules made thereunder, any registered dealer who claims deferment of payment of tax under section 40 or remission of tax under section 41 shall, in addition to the vouchers or documents referred to in sub-rule (1), maintain- (a)separate accounts in respect of sales of goods manufactured in his newly set up industrial unit or in the expanded portion of his existing industrial unit, (b)separate serially numbered bills or cash memos, delivery notes or challans in respect of sales of goods manufactured in his newly set up industrial unit or in the expanded portion of his existing industrial unit, (c)purchase bills or cash memos in respect of purchases of goods including plant and machinery for use directly in the manufacture of goods in his newly set up industrial unit or in the expanded portion of his existing industrial unit, (d)separate registers, for stock of goods purchases for use directly in the manufacture of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by such dealer under section 39 of the West Bengal Sales Tax Act, 1994, computed from first day of April, 2003, exceeds the limit of two hundred per centum of gross value of the fixed capital assets, whichever expires earlier, in such manner and subject to such terms and conditions as may be prescribed; (c)where a registered dealer was enjoying benefit of remission of tax under section 41 of the West Bengal Sales Tax Act, 1994 (West Ben. Act XLIX of 1994), for a specified period or a specified amount determined with respect to gross value of the fixed capital assets, and who would have continued to be so eligible on such appointed day under that Act had this Act not come into force, may be allowed remission of output tax under this Act by the Commissioner for the balance unexpired period, or balance eligible amount with respect to gross value of fixed capital assets, whichever expires earlier, in such manner and subject to such terms and conditions as may be prescribed. (2) For the purpose of clause (a), clause (b) or clause (c), a complete British Calendar month shall be considered, wherever a part of a month is involved. (6) The output tax deferred under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tput tax under the clause (c) of sub-section (1) of section 118, and manufactures goods in such unit immediately before it started commercial production in its expanded portion on or after the first day of May, 1995; (c) the expression "expanded portion" in relation to an existing unit, which is entitled to enjoy deferment of payment of output tax under the clause (a) of sub-section (1) of section 118, or remission of output tax under the clause (c) of sub-section (1) of section 118, shall mean the portion expanded with additional capacity on or after the first day of May, 1995 which the approval of the State Government for the manufacture of goods in West Bengal, either in its existing location or in a different area"; "Rule 177: Remission of tax payable by a newly set up industrial unit or the expanded portion of an existing industrial unit - (1) Where a registered dealer manufactures any goods, in a newly set up industrial unit established by him, or in an expanded portion of an existing industrial unit, in West Bengal, the output tax payable under the Act by such dealer who is entitled to enjoy the remission of tax under clause (c) of sub-section (1) of section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r that where such unit has been relocated, either in full or in part, to a place with a shorter eligibility period, the total eligibility period shall be re-calculated on the basis of the period of eligibility available at the new location but under no circumstances such re-calculated period shall be less than the period already enjoyed by the dealer at its old location. (4)A registered dealer availing of the benefit of remission of tax under this rule shall, notwithstanding such remission, furnish returns as required by section 32 and the rules made thereunder. (5)For the contravention of any provisions of these rules, the benefit or remission of tax under clause (c) of sub-section (1) of section 118 shall, subject to such conditions and restrictions as prescribed elsewhere in these rules, be discontinued even before the expiry of the available eligible period referred to in sub-rule (2)". "Rule 184: Manner and form of application for the certificate of eligibility for deferment of payment of tax or remission of tax - A registered dealer holding an un-expired certificate of eligibility for deferment of payment of tax or remission of tax issued under the pre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....provisions of the Act and the rules as mentioned in sub-rule (1), or that the dealer is not entitled to enjoy the benefit of deferment of tax or remission of tax under clause (a), or clause (c), as the case may be, of sub-section (1) of section 118, he shall reject the application for reasons to be recorded in writing: Provided that before such application is rejected, the dealer shall be given a reasonable opportunity of being heard". "Rule 186: Renewal of certificate of eligibility for deferment of payment of tax or remission of tax and disposal of such application - (1) A dealer shall, within thirty days before the expiry of the validity of the certificate of eligibility granted under sub-rule (1) of rule 185, or renewed earlier under this rule, make an application to the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, for renewal of his certificate of eligibility for a further period. (2)If the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, is satisfied that the dealer is eligible for deferment of payment of tax under sub-rule (1) of rule 165 or remission of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ectly in the manufacture of goods and for stock of goods manufactured in his newly set up industrial unit or in the expanded portion of his existing industrial unit. (2A) Notwithstanding anything contained in sub-rule (2), where a registered dealer who claims deferment of payment of tax under clause (a) of sub-section (1) of section 118 or remission of payment of tax under clause (c) of sub-section (1) of section 118 is unable to segregate the sales emanating from the existing industrial unit and the expanded portion of such unit, separately, when the expansion of such unit is by increasing the approved capacity or by way of production of new commodities, the tax on turnover of sales for the purpose of benefit under the said section shall be calculated by deducting the estimated tax on turnover of sales calculated on the basis of approved capacity of the existing unit from the tax on turnover of sales of both the expanded unit and the existing unit, irrespective of the actual production in the existing industrial unit. (3) The Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, may require a registered dealer who claim....