TaxTMI 
TaxTMI 
2009 (2) TMI 773
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....is facility. 2. Such machinery is sold to a manufacturer, who holds a valid certificate of registration under sub-section (1) of section 6 or 6B of the said Act. 3.. The manufacturer so purchasing the machinery gives to the selling dealer, a declaration in writing that the machinery will be used in the setting up of the above-mentioned industries. 4.. The selling dealer holds a valid E.C. for which a fixed annual fee of Rs. 10 is payable. 5.. The dealer claiming exemption proves to the satisfaction of the AA that he has neither charged nor demanded any tax on sale of such goods. This notification shall be effective from April 1, 1990 and shall remain in force up to March 31, 1997. For pre. Ref. See S. No. 578 dated September 25, 1985. Superseded by S. No. 972 dated March 27, 1995." The Tax Board held in favour of the respondent-assessee that under the said notification since the machinery in question was purchased by the assessee for setting up of the industry in Rajasthan of the specified nature, namely, mineral based industry and other requisite conditions of the notifications were also satisfied, the respondent-assessee was entitled to purchase the machi....
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....d from tax is for an industry which has a fixed capital of a designated amount. In cases of expansion, it would require otherwise calculations and this would mean additional amount. Investment of additional amount is not the one which is conceived if the notification dated December 6, 1990 is read in its entirety. It does not make out a case where bifurcation of the original investment and investment on expansion can be seen. If additional investment cannot be seen into it, then it has to be read in relation to a new industry. In that view of the matter, the order of the Tax Board is not liable to be sustained and is hereby set aside. The exemption has been granted on the terms which is un-sustainable in law. That being the position, the matter is remanded back to the Tax Board for decision in accordance with law." Sd/ (BHAGWATI PRASAD) J. As against this, the learned counsel for the respondent-assessee Mr. Dinesh Mehta submitted that upon a comparative study of the previous notification which was superseded by the aforesaid notification dated 6, 1990 in question would indicate that while the first Notification, serial No. 578 dated September 25, 1985 in this regard did....
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....aw that in the case of ambiguity in taxation matters the interpretation most favourable to the assessee has to be preferred. The dealer, therefore, was entitled to avail of the exemption from tax on the purchase of machinery made by it. In this view of the matter the question of not having used the machinery for the declared purpose so as to incur the liability for penalty under section 16(1)(k) of the RST Act would not arise." The learned counsel for the assessee also relied upon another judgment of this court in the case of ACTO v. Shri Vijaya Industries, Kesarpura, Sheoganj reported in [2007] 18 Tax Up Date 35 in which another co-ordinate Bench of this court dealing with earlier notification S. No. 578 dated September 25, 1985 and distinguishing the judgment in the case of Srinath Minerals Industries (S.B. Sales Tax Revision No. 493 of 2000 decided on November 14, 2005), relied upon by the learned counsel for the Revenue, held as under: "In Srinath Minerals Industries' case S.B. Sales Tax Revision No. 493 of 2000 decided on November 14, 2005, the controversy was entirely different inasmuch in that case, the contention of the assessee itself was that he purchased the ma....
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....ssing authority was that orders for all the plants and machineries in question were placed at the same time, but the machinery in question was delivered late by the supplier and it came to the respondentassessee's business premises only on November 29, 1991. All the machineries were ordered for setting up of the industry of specified nature. The date of commencement of the production falls within the operative period of notification dated February 6, 1990 and the industry in question is of the specified nature and the fact that other relevant conditions of the notification are satisfied is not even in dispute from the side of the Revenue. The only thing which is sought to be argued and requires consideration is as to what meaning should be attributed to the words "setting up of industry in the State of Rajasthan". The continuous tense of the verb "setting up" used in the notification in question itself indicates that the words "setting up of industry" are intended to be a process of setting up of plant and machinery for the purpose of production of certain things. It is only proper and conducive to construe this word "setting up of industries" as a continuous process rather tha....
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....t in the case of Shurvi Colour Chem (P.) Ltd. reported in [1998] 3 STO 277 and ACTO v. Shri Vijaya Industries, Kesarpura, Sheoganj [2007] 18 Tax Up Date 35 clearly support the contention raised by Mr. Mehta. The judgment of the learned single judge in Srinath Minerals' case (S.B. Sales Tax Revision No. 493 of 2000 decided on November 14, 2005) did not take into account earlier Division Bench decision of the Taxation Tribunal in Shurvi Colour Chem's case [1998] 3 STO 277. It is also distinguishable from the facts of the present case, as it is not the claim of the assessee here that such exemption was claimed under expansion category, as it was in Srinath Minerals' case (S.B. Sales Tax Revision No. 493 of 2000 decided on November 14, 2005). The judgment of this court in Vijaya Industries' case [2007] 18 Tax Up Date 35 which turned in favour of the assessee on akin facts, is applicable on all fours to the facts of the present case and therefore, Division Bench decision of the Taxation Tribunal in Shurvi Colour Chem's case [1998] 3 STO 277 and decision of the co-ordinate Bench decision in Vijaya Industries' case [2007] 18 Tax Up Date 35 are respectfully followed....