TaxTMI 
TaxTMI 
TaxTMI 
2003 (2) TMI 440
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.... for the petitioners and Mr. B.J. Talukdar, learned State Counsel for the respondents. 3.. Shortly put, the facts leading to the filing of the petitions as narrated therein are that the petitioner, a private limited company owns M/s. Mahabir Coke Industry, an industrial unit situated at Beltola, in the district of Kamrup, Assam, Guwahati. The said unit is a small-scale industrial unit and its production commenced from October 2, 1985. The petitioner is engaged in the business of manufacture and processing of coal into coke. In the year 1982, the Government of Assam announced an industrial policy vide notification dated October 12, 1982 offering various incentives including exemption from payment of sales tax on purchase of raw materials as well as on sale of finished products for a period of five years to the new industrial units established in the State. The petitioner's unit being a new industrial unit as contemplated under the 1982 Incentive Scheme, applied for an eligibility certificate and the same was accordingly issued by Udyog Sahayak, granting sales tax exemption from October 2, 1985 to October 1, 1990. The petitioner-company was therefore exempted from paying sales tax ....
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....ceed with the assessment. The respondent No. 2 on one hand did not take any action for issuing the authorisation certificate and on the other informed the petitioner that there was no provision for grant of exemption from payment of sales tax under the 1991 Policy and no exemption would be granted in respect of sales made in course of inter-State trade and commerce and that the assessment would be completed summarily and thereafter tax would be levied. 7.. Being aggrieved, the petitioner approached this Court with an application under article 226 of the Constitution of India which was registered as Civil Rule No. 3437 of 1994. By order dated September 3, 1994, the writ petition was admitted and the operation of the impugned notice dated April 19, 1994 was suspended. This Court further observed that in case any assessment had been made, no amount would be realised on the basis thereof. 8.. While the matter rested at that, the Government of Assam in exercise of its powers under section 9(4) of the 1993 Act read with clause (f) of sub-section (3) of section 74 thereof framed a scheme known as the Assam Industrial (Sales Tax Concession) Scheme, 1995 (hereinafter referred to as "the S....
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....der sections 60 and 61 of the 1993 Act read with section 9(2) of the 1956 Act and that further it had not charged and realised tax from its customers. 10.. The above notice was followed by another dated April 17, 1997 issued by the same authority directing the petitioner to submit an application for authorisation certificate along with the eligibility certificate as provided under the 1995 Scheme observing that otherwise the claim for tax exemption under the scheme would not be entertained. In its reply submitted on April 28, 1997, the petitioner informed the said authority that it had already submitted an application for the authorisation certificate before him on September 5, 1995. The petitioner further informed the said authority that it had already applied for the eligibility certificate under the 1995 Scheme on March 28, 1996 and that the same was under process. Thereafter the respondent No. 2 by notice dated May 3, 1997 directed the petitioner-company to produce its books of accounts for the assessment year 1994-95 and 1995-96 in support of its return. The petitioner informed the said authority in response to the said notice that the books of accounts were under verificatio....
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....deposited it in the Government treasury. Its categorical stand was that it had by September 30, 1996 deposited a sum of Rs. 40,37,039.46 on account of Central sales tax. It further contended that it had paid local taxes on the raw materials purchased by it and after adjustment of such taxes paid by the petitioner against the tax collected by it, a sum of Rs. 40,67,560 was still refundable to the petitioner under section 15(b) of the 1956 Act as well as under the scheme. 12.. It was at this stage that by the impugned orders the respondent No. 2 completed the assessment under section 17(4) of the 1993 Act read with section 9(2) of the 1956 Act and tax was levied at the rate of 8 per cent on the total turnover on the ground that the petitioner had failed to produce the relevant "C" forms against the inter-State sales. The tax was levied on the ground that the petitioner had collected sales tax from the customers but had not deposited the same in the Government account. Pursuant to the said orders of assessment, a demand notices were issued directing payment of the demand on or before December 5, 1998. 13.. In the counter filed on behalf of the respondents it has been, inter alia, ....
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....ate exempting it from payment of sales tax and, therefore, the notice dated April 19, 1994 issued under section 9(2) of the 1956 Act was legal and valid. 14.. Supporting the notice dated November 27, 1996 the answering respondents contended that the same was issued as it transpired on the verification of the books of accounts of the petitioner that it had committed an offence under sections 59, 60 and 61 of the 1993 Act read with section 9(2) of the Central Sales Tax Act, 1956 and had evaded tax to the tune of Rs. 4,56,94,685. The notice dated May 9, 1997 was sought to be justified on the ground that the petitioner in spite of charging and realising the Central sales tax had not deposited the same in the Government account. On receiving the reply dated May 26, 1997 of the petitioner denying collection of such tax, it was asked to furnish detailed addresses of its sellers with their registration certificate numbers to verify the correctness of the statements made in the said reply. In the enquiry that was made on the basis of the addresses furnished by the petitioner, it appeared that the suppliers named by the petitioner were fictitious. It was thereafter, according to the answeri....
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....t the corresponding periods/years. It was further contended that the Civil Rule No. 3537 of 1994 was on a different footing and even if exemption under the 1991 policy to the petitioner is conceded it would not amount to granting exemption from Central sales tax as the exemption under the 1995 Scheme was a conditional one. It was thus asserted that as the petitioner had collected Central sales tax from different parties it was bound to deposit the same in the Government account and the same having not been done the respondents were fully justified in taking the impugned decision. 15.. The petitioner submitted a reply to the counter of the respondents where it asserted that as the impugned order of assessment was illegal and without jurisdiction, besides being violative of the principles of natural justice, the instant writ petition was thus maintainable even in face of any alternative remedy available to it. It contended that as it had challenged the validity of the provisions of the 1995 Scheme in Civil Rule No. 3437 of 1994 and thereafter had carried the challenge in Writ Appeal No. 155 of 1998 [Manjushree Extrusions Limited. v. State of Assam [2001] 123 STC 366 (Gauhati)], the....
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.... local taxes paid on the purchase of raw materials are to be reimbursed to the person making the sales in course of inter-State trade and commerce. The petitioner maintained that in the 1995 Scheme, exemption had been granted from payment of Central sales tax in view of section 8(5) of the 1956 Act. The stand of the petitioner in the alternative is that assuming that a dealer had collected the tax but has not deposited the same in the Government account, during the period of exemption, the only course open to the assessing authority is to initiate a proceeding under section 65A of the 1993 Act for the forfeiture of the tax so collected. But the assessing authority would not have the power to make assessment and levy tax during the period of exemption on the ground that on some of the sales, the dealer had collected tax. Further simply because on some transactions tax had been collected it cannot be inferred that on all the transactions tax was realised. Instead each and every transaction will have to be independently examined in a forfeiture proceeding. The petitioner reiterated that the four suppliers, the particulars whereof it had furnished to the respondent authorities were a....
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....liable to be adjudged, illegal and non est in law. In support of his submissions Dr. Saraf has placed reliance on the following decisions. 1.. Pine Chemicals Ltd. v. Assessing Authority reported in [1992] 85 STC 432 (SC); (1992) 2 SCC 683. 2. Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd. reported in [1995] 96 STC 355 (SC); (1995) 1 SCC 58. 3.. Manjushree Extrusions Limited v. State of Assam reported in [2001] 123 STC 366 (Gauhati); (2001) 2 GLR 218. 16.. Mr. B.J. Talukdar, learned State Counsel, prayed for a week's time to file written argument which was allowed. However, till date the learned State Counsel has not submitted the same. Considering the fact that the cases are of the year 1998, I am not inclined to delay the disposal thereof any further. However, while adjudicating the issues involved in the present proceeding the stand of the State respondents as put forward in their counter has been taken note of. 17.. The issues which thus surface from the pleadings of the parties and the submissions made can be para-phrased thus: 1.. Are the writ petitions maintainable for the alternative remedies available to it under the enactments involved? 2.. Whet....
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....aterials or sale of finished products. The contention raised on behalf of the State that in terms of the scheme, the sales tax exemption would be available to the industrial units to the extent only to which expansion was made by them was negatived. While reaching the said conclusion, it was noticed that the eligibility certificate to the appellants (which were existing units) had been granted to avail the benefit of exemption under the 1991 Policy for a period of seven years. It was thus held in essence that the scheme was in continuation of the 1991 Industrial Policy and therefore the appellants were entitled to the benefit of the scheme and that the eligibility certificate issued in favour of the appellants under the 1991 Policy had created enforceable rights in them and consequently the benefit under the said policy could not be curtailed by the scheme. 19.. In view of the above dicta of this Court, there is no room to contend that the petitioner is not entitled to the benefit of exemption under the scheme. Reported as Manjushree Extrusions Ltd. v. State of Assam [1998] 111 STC 146 (Gauhati). 20.. Before I part with this issue it would be apposite to make a brief reference ....
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.... entitled to the aforementioned benefits under the scheme. I am, therefore, inclined to uphold the contention raised on behalf of the petitioner on this issue. 23.. Before taking up the other issues for consideration it would be profitable to refer to the decisions of the apex Court cited by Dr. Saraf. 24.. In Pine Chemicals Ltd. v. Assessing Authority [1992] 85 STC 432 (SC), one of the contentions raised was that, as in the assessment order involved therein there was a finding that the assessee had collected sales tax in respect of its sales turnover for which exemption was claimed, the said amount was refundable under section 8B of the Jammu and Kashmir General Sales Tax Act, 1962. The apex Court while leaving the question of applicability of section 8B in that case open, held that in view of its finding that the sales involved were exempted, the question, whether the assessee had collected any tax and whether the amount was collected by way of tax and whether any element of sales tax had merged in the fixation of the price and that amounts to collection of sales tax, would have to be decided in a separate proceeding that may have to be initiated under section 8B of the said Ac....
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....njoying in law under the scheme, the allegation if correct would render any collection of such tax to be in contravention of the provisions of the 1956 Act. The Acts having provided the consequences in such an eventuality, in my view, the State respondents ought to have resorted to the relevant provision thereof. The apex Court in similar circumstances, in Pine Chemicals Ltd. v. Assessing Authority [1992] 85 STC 432 referred to above has also prescribed the same course of action, I respectfully subscribe to that view. 29.. One more aspect of the matter has to be noticed. If any allegation of unauthorised collection of tax is established, the consequences as provided in section 65A of the 1993 Act and/or section 10 of the 1956 Act as the case may be, would follow. In a given case, the person collecting such tax may be penalised as well. Having regard to the adverse consequences what would result in such cases, the most rational and logical approach in the matter would be to examine and scrutinise each and every transaction in course of which tax is alleged to have been collected in contravention of the enactments to conclude that a person has illegally collected tax in his transact....
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....two relating to M/s. H.E.F. Ltd., Bhupal do not contain any signature on behalf of the petitioner-company. Three documents containing, terms and conditions for purchase of coke by M/s. H.E.F. Ltd., Bhupal from the petitioner have also been filed indicating, inter alia, that it was agreed upon that 4 per cent Central sales tax would be paid on the transactions. Sample bills corresponding to the transactions entered into have not been filed. Even assuming that the petitioner had realised the Central sales tax in the transactions contained in the documents filed by the State respondents it cannot by itself be decisively held that in all the transactions executed by the petitioner for the periods in question it had collected the tax as alleged and had thereafter defaulted to deposit the same in the Government treasury. The assessing authority, however, as would be evident from the impugned orders, had proceeded on the basis that the petitioner had collected such tax in all the transactions for the entire period and therefore, held it liable to pay tax computing the same on the entire turnover. At the plain of reiteration it has to be again observed that the assessing authority in comin....