AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2008 (11) TMI 650
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....es tax is for a period of ten years from the date of commencement of the production, i.e., from August 31, 2000 to August 31, 2010. The Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1993 (for short, "the Entry Tax Act") came into force in the year, 1993. Section 3 of the Entry Tax Act is a charging section and it provides for tax on entry of scheduled goods into a local area for consumption, use or sale therein. The Entry Tax Act has been amended by amending Acts in the years 2001, 2004 and 2006. That coal/coke is notified goods under the Entry Tax Act is also not in dispute. The petitioner claims that the raw material, i.e., coal imported from the collieries outside the State of Bihar by it for manufacture of SSF coke cannot be subjected to entry tax under the Entry Tax Act as the petitioner is exempted from payment of sales tax on its finished product, i.e., SSF coke. By means of this writ petition, the petitioner, therefore, has prayed for issuance of a direction to the sales tax authorities of State of Bihar not to charge any entry tax from the petitioner on entry of coal imported by the petitioner from outside the State. The relief is ....
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....or sale, and for this purpose, meaning of 'manufacture' will be the same as defined under Chapter 1 of the Bihar Finance Act, 1981 (Part 1 of the Bihar Act 5 of 1981); 2.. This facility will only be applicable to the following industries described under the category of 'thrust industries' under clause 15 of the Industrial Resolution Policy, 1995: (i) Mineral based industries, (ii) Metal industries, (iii) Engineering industries, (iv) Energy production and connected industries, (v) Non-conventional energy, (vi) Telecommunication, (vii) Electronic/computer, (viii) Consumer goods (domestic), (ix) Plastic, (x) Drugs and medicines, (xi) Leather, (xii) Aquaculture, (xiii) Poultry farming, meat processing, etc., animal husbandry based, (xiv) Industries based on recycling of garbage and eco-friendly raw materials, (xv) Environmental protection industries , (xvi) Commercial/industrial forestation, (xvii) Health services, (xviii) Food and food processing, milk and cow processing fruits and vegetable processing, tissue culture processing, seeds processing, organic processing and production agriculture technology, (xix) Agro-based industries, sugar, al....
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....partner or the managing director of the company; 9.. If the electricity connection is not in the name of unit/firm or proprietor/partner/holding company, then the benefit of exemption from payment of sales tax will be admissible only when the electricity connection is transferred/authorized in the name of its own unit/ proprietor of the unit/any partners or managing director or holding company; 10. (a) If the unit is closed temporarily for a period of less than six months, and restarts production thereafter, it will continue to get the benefit of exemption from payment of sales tax, but this period will be calculated within applicable period; (b) In case, any industrial unit has suspended the production for a period more than six months except for the reason of natural calamities or for the reason beyond the control of the industrial units, in respect of which the Director of Industries/Commissioner of Commercial Taxes is satisfied then it will become disentitled for benefit of exemption from payment of sales tax from the date of suspension of production, but the Director of Industries/Commissioner of Commercial Taxes on being satisfied can allow the benefit for the remai....
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....me, will not be considered to be a new unit and the benefit under this policy will not be admissible to such unit. 14.. The owner of the unit will be obliged to maintain separate accounts of sale and purchases for sale and purchase of goods. 15.. The owner of the unit will be obliged to produce the accounts relating to the sale on demand by the competent authority appointed under section 9 of the Bihar Finance Act, 1981. 16.. (i) The dealer claiming tax exemption under this notification on the sale subsequent to the sale made by the owner of the unit will be required to obtain a counter-foil along with his return. He will also produce the cash memo/bill or invoice along with the purchase order, if any, relating to the purchase, before the assessing officer, as an evidence in support of his claim. (ii) The dealer claiming exemption on tax on subsequent sale after sale by the unit will be required to keep separate accounts for such goods. (iii) The declaration mentioned in sub-clause (i) will be serially printed numbers and it will be issued from a book in bounded form and will be duly authenticated by the Commercial Taxes Officer of the concerned circle. (iv) The....
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....view the order of the circle in-charge Joint Commissioner of Commercial Taxes (Admn.) or will pass necessary order; 19. The competent authority will be entitled to reject the application of such unit which does not fulfil the required condition mentioned in the notification or does not provide necessary papers and evidences after granting reasonable opportunity of hearing; 20. The Government will have right to reconsider the exemption, at any point of time, and to amend any of the conditions or procedures. (Bikri-Kar/U/3/95 (Part 3)) (By order of the Governor of Bihar) S. Vijayaraghwan Commissioner of Commercial Taxes-cum-Special Secretary to Government, Bihar, Patna." Although pleadings in the writ petition are not specific with regard to the application made by the petitioner before the competent authority for exemption, the date of commencement of production by the petitioner's unit and the issuance of tax exemption certificate but the Government counsel did not dispute before us that the petitioner's unit has been issued tax exemption certificate pursuant to the notification dated December 22, 1995, whereunder it is exempted from payment of sales tax ....
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....y into a local area and any subsequent entry or entries into any other local area or areas of the said scheduled goods shall not be subject to tax provided the subsequent importing dealer produces before the assessing officer the original copy of the cash memo, invoice, bill or challan issued to him by the dealer from whom he purchased or received the said scheduled goods, and files a true and complete declaration in the form and manner prescribed. Provided that no tax shall be levied and collected in respect of any motor vehicle which was registered in any other State or Union Territory under the Motor Vehicles Act, 1989 for a period of fifteen months or more before the date on which it is registered in the State under that Act." It needs no elaboration that entry tax is not a tax on sale of the goods. Its taxable incidence is entry of goods into local area for the purpose of sale, consumption or use. Sales tax and entry tax are two distinct, different and separate form of taxes. Liability to pay sales tax arises on sale or purchase of goods while on entry of goods into local area for purpose of sale, consumption or use, the liability to pay entry tax accrues. Save and ex....
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....eduled goods who is liable to pay tax under the Entry Tax Act, becomes liable to pay tax under the Act, 1981, the tax paid by such importer under the Entry Tax Act is adjustable against his liability to pay tax under the Act, 1981. Second proviso appended to sub-section (2) of section 3 of the entry tax has no application to the present fact situation as the petitioner does not seek adjustment of entry tax against payment of sales tax. As a matter of fact, the petitioner's case is otherwise. The petitioner claims that since it is exempted from payment of sales tax by virtue of exemption given to it on its finished products, i.e., SSF coke it is not liable to pay entry tax for the coal purchased by it outside the State of Bihar for its use or consumption. We are afraid, this situation is not at all covered by the second proviso appended to sub-section (2) of section 3. The two words "exemption" and "adjustment " are quite distinct and separate. "Adjustment" is to set off or to approximate; settle. "Exemption" on the other hand pre-supposes existing liability for being freed by way of an exception. Exemption is freedom from liability or from duty. Seen thus, the provision conta....
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....t was raised before the Supreme Court is reflected in paragraph 2 of the report which reads thus: (page 391 of STC) "2. The appellant questioned legality of the notices issued on May 30, 2002 and June 24, 2002 by the Deputy Commissioner, Commercial Taxes, Patna Special Circle, Patna (respondent No. 3) proposing to levy tax for the assessment years 1998-99, 1999-2000 and April 1, 2000 to November 14, 2000 under the Bihar Finance Act, 1981 (in short, "the Act") before the High Court. Notices were issued on the purported basis that the appellant was not entitled to adjustment of tax paid under the Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1993 (hereinafter referred to as "the Entry Tax Act"). The High Court upheld validity of the notice and action taken by concerned respondents." While dealing with the aforesaid question, the Supreme Court after referring to the provisions of the Bihar Finance Act and the Bihar Entry Tax Act considered the matter thus (paras 19 to 21 at pages 397, 398 of STC): "19. Crucial question, therefore, is whether the appellant had any 'liability' under the Act. The answer to this lies in section 3 of the A....
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....xable'." The answer to the aforesaid question is found in paragraph 20 (paragraph 22 of STC) of the report which reads thus: "20. Therefore, it cannot be said that as tax was not paid on portion of the turnover of the Scheduled goods, i.e., cement, the assesseeappellant had no liability under the Act. It was definitely liable to pay tax under the Act, but for the exemption. There is no dispute that the assessee-appellant was liable to pay tax under sub-section (3) of section 3 of the Entry Tax Act. Therefore, it was entitled to reduction to the extent of tax paid under the Entry Tax Act while working out tax payable by it under the Act." What has been held by the Supreme Court is that the Associated Cement Companies Ltd. were entitled to reduction to the extent of tax paid under the Entry Tax Act while working out tax payable by it under the Bihar Finance Act. The judgment of the Supreme Court in Associated Cement Companies Ltd. [2004] 137 STC 389; [2004] 7 SCC 642, cannot be read to lay down the proposition that where an assessee is exempted from payment of sales tax under section 7 of the Bihar Finance Act he becomes automatically exempted from payment of entry tax ....