TaxTMI 
TaxTMI 
2013 (4) TMI 405
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....ely, M/s Hindustan Coca-cola Beverages Private Limited, is a Private Limited Company registered under Indian Companies Act and is a Dealer within the U.P. Trade Tax (now U.P. Value Added Tax) as well as under Central Sales Tax Act. In order to attract industrial investment within the State of U.P., notifications were issued from time to time under Section 4 (A) of the Act for grant of exemption from payment of Tax. In the year 1995, notification Nos. 780 and 781 dated 31.3.1995 was issued for granting exemption from payment of sales tax to industrial units in respect of fixed capital investment made by them till the commencement of production. The said notifications provides that units making investment of more than Rs. 50 Crores were entitled to 100% exemption for a period of 12 years, 10 years and 8 years depending upon the district in which the unit is situated and also to the extent of 250%, 200% and 175% of the fixed capital investment made upto the time of commencement of production. In the said notification, there is a negative list and the units, which are coming in the negative list, would not be entitled to the incentive. Subsequently, on 21st February, 1997, the St....
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....9. The original application as well as revised application were processed. During the pendency of both the above applications, State Government issued another two notifications i.e. Notification Nos. 1340 dated 1.7.1999 and 1341 dated 29.9.1999. By the notification dated 1.7.1999, the State Government brought the units manufacturing Cold drinks in the negative list mentioned in the notification Nos. 780 and 781 dated 31.3.1995, whereas vide notification No. 1341 dated 29.9.1999, the State Government by amending the earlier notification Nos. 640 and 641, withdrew the benefit of exemption granted by it to the units manufacturing cold drinks. According to the petitioner, prior to coming into force of the above notification No. 1341 dated 29.9.1999, a Member of District Industries Centre, Ghaziabad had inspected petitioner's new unit on 23.7.1999 and after due inspection, the District Industries Centre, Ghaziabad forwarded its report to the Divisional Level Committee (Meerut). On receipt of the report, while computing the fixed capital investment of Rs. 80,18,50,309/- in place of the certified fixed capital investment of Rs. 1,02,08,99,877/-, the Divisional Level Committee (M....
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....76,31,84,417.00 to the petitioner. On 3.5.2008, the Joint Commissioner (Executive), Commercial Taxes, Nazibabad, Bijnore issued a notice to the petitioner under Section 10-B of the U.P. Trade Tax Act, revising the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, Nazibabad, Bijnore. In response to the said notice, the petitioner submitted his reply on 3.5.2008. The Joint Commissioner (Executive), Commercial Taxes, Nazibabad, Bijnore, after considering the matter, has passed an order dated 29.5.2008, excluding the amount of additional fixed capital investment as included by the Deputy Commissioner (Assessment) Trade Tax, Nazibabad vide order dated 30.6.2004 to the eligibility certificate, on the ground that the Divisional Level Committee could not direct him to include this amount and as such, Deputy Commissioner (Assessment), Trade Tax, Nazibabad had no power to include the amount of additional fixed capital investment and accordingly calculated the total monetary limit. Feeling aggrieved by the order dated 29.5.2008, the petitioner preferred a writ petition, bearing No. 1265 of 2008, before this Court at Allahabad, which, vide interim order date....
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....oner, Commercial Taxes, Bijnore excluding the amount of additional fixed capital investment from the Eligibility Certificate granted to the petitioner. Hence the instant writ petition. Sri Bharat Ji Agarwal, Senior Advocate, appearing on behalf of the petitioner, while assailing the impugned notice dated 21.11.2008, has vehemently contended that out of the above two grounds mentioned in the impugned notice, the ground about the order under Section 10-B dated 29.5.2008 has ceased to exist in view of the order passed by the Trade Tax Tribunal, Moradabad dated 21.8.2009 setting aside the order passed under Section 10B and in Trade Tax Revision No. 1191 of 2009, this Court has issued a direction that the order of the Tribunal dated 21.8.2009 be given effect to the within one month. So far the other ground regarding denial of benefit of exemption to the unit manufacturing cold drink is concerned, which was for the first time introduced on 1.7.1999 and again on 29.9.2009 by amending the notifications dated 31.3.1995 and 21.2.1997, Sri Agarwal has contended that the petitioner having acted upon the promise made by the State Government in its incentive notification and having inve....
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....40 and 641 dated 21.2.1997. In the instant case, the subsequent investment of approximately Rs. 51 Crore made by the petitioner is not to be viewed in isolation from the initial investment made by the petitioner in the unit but has to be taken as integral part of the decision taken earlier to invest in the State of U.P. and is squarely covered by the provisions of para 3(a) of the notification dated 21.2.1997. Elaborating his submission, Sri Agarwal has submitted that if the matter is considered in proper perspective, notifications dated 1.7.199 and 29.9.1999 are restricted to the entrepreneurs, who may decide to make fresh investment in the State of U.P., past the date of these notifications, in units manufacturing cold drinks and do not relate to entrepreneurs such as the petitioner who has already taken a decision by acting on the promise understood to it vide notification dated 21.2.1997 by the State Government and also commercial production of goods prior thereto. In support of the above contentions, Sri Agarwal has relied upon the latest decision of Division Bench of this Court dated 29.3.2010 in writ petition No. 5861 of 2004 : Jaiprakash Associates Vs. State of U.P. a....
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....ted 21.2.1997 provides that the Unit will have a fixed capital investment or Rupees Fifty Crore or more as the new unit or making an additional fixed capital investment of Rupees Fifty Crore or more in expansion, modernization, diversification or backward integration. The fixed capital investment which is made during the period of five years commencing from the first day of such investment in the case of expansion, modernization, diversification or backward integration, and from the date of starting production in the case of new units will be included in fixed capital investment for the purposes of this notification and also for the purpose of exemption from, or reduction in the rate of tax benefit. Sri Srivastava has further submitted that Section 4-A (6) of the U.P. Trade Tax Act provides that where the State Government is of the opinion that the purposes for which the facility of exemption from or reduction in the rate of tax was granted under Section 4-A of the U.P. Trade Tax Act has been fulfilled or that the conditions of such facility is no longer in public interest or opposed to the public interest, it may, by notification, withdraw such facility granted to any industry,....
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....r, the Notification Nos. 2008 and 2009 dated 29.9.1999 were issued in partial modification of aforesaid Notification Nos. 640 and 641 dated 21.2.1997. Sri Srivastava has further contended that after the end of five years, the Deputy Commissioner (Assessment) Trade Tax, Nazibabad vide order dated 30.6.2004 included an amount of Rs. 50,87,89,611.00 as additional fixed capital investment made by the petitioner, and provided tax exemption/rebate amounting to Rs. 76,31,84,417.00 to the petitioner. It is submitted that said tax exemption/rebate amounting to Rs. 76,31,84,417.00 to the petitioner was based on the order dated 30.6.2004 passed by the Assessing Authority. He further contended that the Assessing Authority/Deputy Commissioner (Assessment) Trade Tax, Nazibabad was/is not the competent authority to issue the eligibility certificate. He submits that as per the provision of Section 4-A of the Act, the authority concerned is also not empowered to amend the eligibility certificate already issued. Sri Srivastava has further contended that on 3.5.2008, the Joint Commissioner (Executive) Commercial Taxes, Nazibabad issued a notice to the petitioner under Section 10-B of the Act, r....
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....tted that neither Section 14-A of the Act nor Rule 25 of the Act contemplate the delegation of power to the Assessing Authority, therefore, neither the Divisional Level Committee could have directed the assessing authority to include the additional fixed capital investment between 24.3.1999 to 18.2.2004 in the eligibility certificate nor the assessing authority i.e. Deputy Commissioner (Assessment), Commercial Taxes, Nazibabad, Bijnore could have granted exemption. Under Rule 25 of the U.P. Trade Tax Rules, for claiming the benefits of exemption in respect of the additional fixed capital investment an application has to be moved before the Divisional Level Committee, which has to be considered by the Divisional Level Committee in terms of the relevant notification and grant the same, if the conditions are fulfilled. We have heard heard learned Counsel for the parties and perused the records. First we would like to deal the question regarding maintainability of the writ petition, which has been filed against the show cause notice. There are plenty of decisions in which the Apex Court has reiterated that the writ jurisdiction under Article 226 of the Constitution of India shoul....
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....w for the opinion of the High Court under Section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Waterworks Co. v. Hawkesford; (1859) 6 CBNS 336 in the following passage: (ER p.495) There are three classes of cases in which a liability may be established founded upon statute. . . . But there is a third class, viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. . .the remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to. The rule laid down in this passage was approv....
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....by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction. 32. No reason could be assigned by the appellant's counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is the appellate forum." In United Bank of India V. Satyawati Tondon and others; 2010 (8) SCC 110, the Apex Court in para 43 has observed as under : "43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the a....
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....ee, the Cold Drinks were already placed in the negative list and this very vital fact was not taken into consideration. On coming to the notice of the said facts, the Joint Commissioner (Executive), Commercial Taxes, Nazibabad issued a notice dated 3.5.2008 to the petitioner under Section 10-B of the Act and revised the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, to which the petitioner has submitted his reply. Thereafter, an order dated 29.5.2008 was passed by the Joint Commissioner (Executive), Commercial Taxes, excluding the amount of additional fixed capital investment as included by the Deputy Commissioner (Assessment), Trade Tax vide order dated 30.6.2004 to the eligibility certificate. Being aggrieved by the order dated 29.5.2008, the petitioner approached this Court at Allahabad by filing Civil Misc. Writ Petition No. 1265 of 2008, in which, a Division Bench of this Court at Allahabad, vide ad interim order dated 4.7.2008, stayed the order dated 29.5.2008. Counter affidavit was filed on behalf of the State in the above writ petition and the petitioner withdrew the writ petition on 13.11.2009. The petitioner, thereafter, preferred an Appea....