TaxTMI 
TaxTMI 
2009 (8) TMI 1086
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....he petitioner's buyers are registered dealers, whose registration certificates disclose that they are not only entitled to purchase and sell goods but are also entitled to purchase packing/packaging materials to be used for packing the goods dealt in by them, whose rate of tax is four per cent against furnishing of form IV. The packing materials are used for packing different types of goods for various other manufacturers and producers such as, liquor, medicines, spices, vermicelli, prawns, day old chicks and many more products. According to the petitioner, he established the aforesaid company basing on the assurance held out in the IPR, 1996 supported by the latest notifications for exemption under the Sales Tax Act for new small-scale industrial units like that of the petitioner. According to him, the IPR 1996 came into effect on March 1, 1996, exempting new small-scale industrial units from payment of sales tax on purchase of raw materials and packing materials and on sale of finished products up to a ceiling of 100 per cent of the fixed capital investment within a period of five years. The petitioner made an investment of Rs. 26.20 lakhs as fixed capital, for which the p....
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....cted?" The undisputed facts are: (a) The petitioner is eligible to get benefit under the IPR 1996. (b) The petitioner is a new industry and started commercial production after April 1, 1997 and was granted permanent registration certificate on May 14, 1997. (c) It has invested Rs. 26.20 1akhs. (d) Entry 48 provided the rate of tax at 4 per cent on "Goods of the class or classes, specified in certificate of registration of the registered dealer purchasing of goods as being intended for use by him in the manufacture or processing or packing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power, subject to the production of true declaration by the purchasing registered dealer or his authorized agent in form IV (July 1, 1990 to March 31, 2001)" and by Notification No. l4687-CTA-37/2001 (Ct) I dated March 31, 2001 with effect from April 4, 2001 wherein entry 81 on "goods of the class or classes other than (petrol, cement, stationery goods, ginger, tincture, cosmetic perfumes) air conditioner, furniture, carpet, telephones, India made foreign liquor (IMFL) or any liquor specified in the certificate of registration of the....
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....while enjoying exemption under IPR, 1996. If the Revenue finds that concessional rate of tax cannot legally be claimed by or granted to a dealer while he enjoys a tax holiday under the IPR, the Revenue should cite provisions of law for such restriction, basing on which the claim of the appellant shall be denied. But since the denial of the claim is based on no legal provision, the finding in this regard of the fora below is quashed." The petitioner has placed reliance upon a judgment of the Gujarat High Court in the case of Ardeec Engineering (Saurashtra) Pvt. Ltd. v. State of Gujarat [2000] 117 STC 178. In the facts of the present case, we have to consider the basis on which the assessee is entitled to claim exemption, what is the mode and scope of the provision under which the demand of exemption availed of is to be worked out with reference to different provisions of the OST Act. In the aforesaid case, the self-same stand, as taken by the Revenue herein, was raised for consideration. It is worthwhile to note the conclusion reached by the Gujarat High Court in paragraphs 25 and 26 of the judgment which are quoted hereinbelow (at page 193 of 117 STC): "25. The law ....
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....6.. We may examine the issue from yet another angle. The assessee has either to accept a tax deferment scheme or exemption from tax payment. In case he opts for exemption, the assessee enjoys exemption from payment of tax altogether and he cannot collect the tax on taxable events until reaching exemption limit. However, in the case of deferment scheme assessee does not enjoy exemption from payment but merely enjoys the benefit of retaining the amount of tax collected by him on his turnover for eligible period and thereafter he has to hand it over to the public exchequer as per the instalments contemplated under the scheme. Conditions which make a dealer eligible for benefit of incentive scheme are the same in either case. If he opts for deferment scheme, his regular assessment takes place and tax leviable from him is determined in accordance with provisions of the Act. But the same is not collected from him immediately. He is granted exemption only in respect of tax leviable and collected by him in accordance with regular assessments. Any benefit enjoyed by him during that period whether by way of permissible deductions from the taxable turnover or exemptions under various notifica....