TaxTMI 
TaxTMI 
TaxTMI 
1994 (5) TMI 245
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....benefit of S.O. No. 787, dated September 10, 1986, which was an incentive afforded to the small-scale industrial units by the State Government. The notification provided for facility of set-off of the tax paid on the purchase of raw materials used for the manufacture of goods with the sales tax payable by the dealer on sales of such manufactured goods and after such set-off to pay only such amount of sales tax which is in excess of the amount paid by the dealer on the purchase of raw materials. This was in force till August 31, 1991. Even before the expiry of the said notification, the State Government promulgated a fresh Notification No. S.O. No. 123 dated March 5, 1990, in exercise of the powers vested in it under section 22 of the Bihar Finance Act, 1981. The said notification dated March 5, 1990, is annexure 1. The benefit of the said notification was afforded to existing and newly established small and/ or medium scale industrial units in the State. The units were allowed to setoff the amount of sales tax paid by them on purchase of raw materials directly required for sale of manufactured goods within the State, with the amount of sales tax payable by such dealer on the sale o....
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....ond respondent, is illegal. The proceeding to that effect evidenced by annexure 5 is invalid. The registration under section 13 by itself does not disentitle the petitioner of the facility of set-off. On these grounds, the petitioner prays for quashing annexure 5 order and for the issue of a writ of mandamus directing the second respondent to issue sufficient forms XXVIII-B to the petitioner to enable it to despatch the goods manufactured by it. It is the petitioner's case that during the relevant time though it had a certificate under section 13 of the Act, it was subsequently surrendered, and it never purchased any raw material at the concessional rate by using the certificate under section 13 of the Act after April, 1991 (see rejoinder affidavit of January 13, 1994). 3.. The respondents have filed a detailed counter-affidavit dated July 7, 1992. Supplementary counters are also filed. It is stated that form XXVIII-B was withheld on the ground that though the petitioner has submitted a return, it has defaulted in making payment of admitted tax from the month of September, 1991 to May 1992. It is further stated that the petitioner is not entitled to claim the facility of set-off e....
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....aw materials into finished product and Bihar sales tax payable on the sale of the said finished product within the same financial year. ...................... 3.. This notification shall remain valid till 31st December, 1994, By order of the Governor of Bihar. N.K. Singh, Commissioner of Commercial Taxes and Special Secretary to Government of Bihar, Patna." Rule 45 of the Bihar Sales Tax Rules, 1983, is to the following effect: "45. Powers to reject applications for permit and declaration form.Notwithstanding anything contained in these Rules- (a) if for reasons to be recorded in writing- (i) the prescribed authority is not satisfied that the applicant for forms IX, IX-C and XXVIII-B made bona fide use of such forms previously issued to him or that he bonafidely requires such forms applied for, he may reject the application; (ii) the prescribed authority is not satisfied that the applicant bonafidely requires such forms in such numbers as he has applied for, he may issue such forms in such lesser numbers as, in his opinion, would satisfy the reasonable requirement of the applicant. (b) if the applicant for forms IX, IX-C and XXVIII-B has at the time of making the applicat....
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....ed. Do not issue form XXVIII B." 7.. The second respondent, in annexure 5 order has proceeded on the basis that since the petitioner has got a "facility to pay tax" at the concessional rate under section 13 of the Bihar Finance Act, the facility of set-off will not be available under S.O. No. 123 dated March 5, 1990. Earlier, it has understood the condition in the notification, as one where the benefit will not be available to a person who pays tax at concessional rate. But in the conclusion, he has stated that the petitioner has the "facility to pay tax", at the concessional rate. Annexure 5 proceeds on inconsistent premises and on that ground itself seems to be perverse. That apart, the question is whether the interpretation placed on S.O. No. 123 dated March 5, 1990, is correct and whether annexure 5 is valid. It is common ground that clauses (a)(i) and (ii) of rule 45 are inapplicable in this case. The only plea of the Revenue is that the dealer has not paid the tax due from it as per the revised return. The question is whether the dealer is disentitled to the benefit of S.O. No. 123 dated March 5, 1990, and cannot avail the benefit thereof and as a sequel thereto, it cannot ....