TaxTMI 
TaxTMI 
1996 (6) TMI 324
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....d respondent is the State of Maharashtra responsible for administering the sales tax laws in the State of Maharashtra. 3.. With a view to achieve development and dispersal of industries outside the Bombay/Thane/Pune Belt, the third respondent by several Government Resolutions evolved schemes to give sales tax incentives for those industries which were then coming up in the backward areas as more particularly described in the various schemes as amended from time to time. One of such schemes evolved was by Government Resolution No. IDL/7079/81133(1925) IND 8 dated 18th October, 1979 as published by the Government Resolution No. IDL/7079/(2043)IND 8 dated 5th January, 1980 (for short, "the 1979 Package Scheme") for industries established in the backward areas of Maharashtra. The petitioners being desirous of availing of the benefits of the said 1979 Package Scheme, established a factory for manufacturing diverse products at C-11, MIDC, Kherdi, Chiplun, District Ratnagiri, in the backward area of the State of Maharashtra. The petitioners after complying with the formalities and requirements, applied for certificate of eligibility under the 1979 Package Scheme. The first petitioner w....
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....es. However, by a letter dated 25th February, 1987, the first respondent informed the first petitioner that the first petitioner had availed of the benefits of entitlement in excess of the limits inasmuch as the entitlement benefits were up to sales tax liability of Rs. 54,62,100 and the first petitioner had availed of the total benefits to the extent of Rs. 62,67,187 up to the period ending 31st December, 1986 and directed the first petitioner to stop availing of the sales tax benefits with immediate effect and also to make repayment of the sum of Rs. 8,05,087 being the amount of excess benefit allegedly enjoyed by the first petitioner along with interest thereon to be calculated at the rate of 15.5 per cent per annum within the period stipulated therein. The petitioners were threatened that if the said amount would not be paid, it would be recovered from the first petitioner as arrears of land revenue. Correspondence thereafter ensued and representations in the matter were also made by the petitioners. In view of coercive attitude of the first respondent, the first petitioner did pay sums aggregating to Rs. 2,20,000 to the first respondent against the demand made by the first res....
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....the demands made by the said letters dated 25th February, 1987 and 15th February, 1988. Since the determination of notional sales tax liability by the Sales Tax Officer at Rs. 43,84,880 is not disputed by the petitioners, the learned Assistant Government Pleader appearing for respondents 2 and 3 has made no submissions to justify the demands made by the first respondent vide the said letters dated 25th February, 1987 and 15th February, 1988. 8.. Though the said certificate of entitlement was valid for the period from 19th March, 1984 to 18th March, 1991, by its said letter dated 25th February, 1987, the first respondent wrongfully called upon the first petitioner to stop availing of sales tax benefits by way of exemption with immediate effect and illegally demanded repayment of the said sum of Rs. 8,05,087 with interest from the first petitioner. In view of the said letter dated 25th February, 1987 received by the first petitioner on 3rd March, 1987, the first petitioner stopped availing of sales tax benefits by way of exemption with immediate effect reserving its right to claim the same to a later date. 9.. To avail of benefits of sales tax incentive under Part I by way of e....
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....tion and ignorance of the definitions under the 1979 Package Scheme and ignorance of the provisions of the Bombay Sales Tax Act, 1959 and the Rules made thereunder. The sales tax/ purchase tax payable or paid by a manufacturer in respect of his raw material stood effectively reduced to only 4 per cent by virtue of the set-off provisions under rule 41D of the Bombay Sales Tax Rules, 1959 and as such the effective maximum rate of tax borne on the purchase of raw material used in the manufacture of finished goods by the first petitioner was thus only at 4 per cent and not 10 per cent as determined by the first respondent and as such, the notional sales tax liability in respect of purchases of raw material by the first petitioner ought to have been quantified at 4 per cent only as that was the maximum rate of purchase tax payable by the first petitioner under the local sales tax law. The first respondent irrationally and in violation of statutory provisions quantified notional sales tax liability of the first petitioner for the period ended on 31st December, 1986 at Rs. 62,67,187 as mentioned in its said letter dated February 25, 1987. 13.. The demand made by the first respondent vi....