TaxTMI 
TaxTMI 
2015 (4) TMI 285
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....ct and the Haryana General Sales Tax Act. For the assessment year 1998-1999, the assessment was only under the Haryana General Sales Tax Act and there is, therefore, only one appeal in respect thereof. 3. The appellant had set up an industrial unit at Gurgaon in the State of Haryana. The appellant is a registered dealer under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. The appellant was allowed exemption from payment of tax under Section 13-B of the Haryana Sales Tax Act read with Rule 28-A of the Haryana General Sales Tax Rules, 1975 for a period of seven years from 04.04.1996 to 03.04.2003 for an amount of Rs. 283.76 lacs. 4. The appellant's case is that it subsequently made an additional fixed capital investment of Rs. 1.57 crores which increased its production capacity. The appellant applied for the grant of a further exemption from payment of tax in relation to the expansion unit. The appellant contends that it had obtained the separate registration in respect of the expanded unit bearing Registration Certificate No. 18200737 only for the limited purpose of becoming eligible to avail the exemption and started filing separate returns for i....
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....e original unit?" 8. Section 13-B of the Haryana Sales Tax Act reads as under:- "13B- Powers to exempt certain class of industries - The State Government may, if satisfied that it is necessary or expedient so to do in the interest of industrial development of the State, exempt such class of industries from the payment of tax, for such period either prospectively or retrospectively and subject to such conditions as may be prescribed." 9. Rule 28A of the Haryana General Sales Tax Rules, 1975 reads as under:- "28A (2) For the purpose of this Chapter, unless the context otherwise requires. (c) "New Industrial Unit" means a unit which is or has been set up in the State of Haryana and comes or has come into commercial production for the result of purpose or transfer of old machinery except when purchased in the course of import into the territory of India or when the cost of old machinery does not exceed 25% of the total cost of machinery re-establishment, amalgamation, change of lease, change of ownership, change in constitution, transfer of business, reconstruction or revival of existing unit; (d) "expansion/diversification of industrial unit" means a capacity set up ....
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.... clause without having been given reasonable opportunity of being heard." 10. As we mentioned earlier, on 07.11.1996, the appellant had applied for exemption under Rule 28-A. In accordance with Rule 28-A, the appellant made an application on behalf of the expansion unit for the grant of eligibility certificate for tax exemption/deferment for a period of seven years from the date of exemption. 19.02.1996 was stated to be the date of going into commercial production. 11. On 09.09.1998, the appellant was granted registration certificate No. 18200737 in respect of Unit No. 2/the expansion unit, whereas for the first unit registration certificate No. 1815049 had been granted. 12. On account of the manufacturing activities of the original unit having been suspended and the appellant having been unable to meet the requirements of Rule 28-A the application for exemption of Unit No. 2/expansion unit was rejected by a communication dated 05.08.1999. The Joint Director in the said communication noted that the Higher Level Screening Committee had observed that the appellant had not appeared before the Committee; that the report of the DETC noted that the unit had not yet completed the....
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....ent, with interest chargeable under the Act. Thus, reliance placed by the High Court on the said decision is misconceived and inappropriate. 17. The nub of the matter is whether production of two different units can be combined together to meet the requirement of the postulate enshrined under the Rule. The production of the beneficiary unit had failed to fulfil the stipulation incorporated in sub-rule (11)(a)(i) of Rule 28-A of the Rules. It is also the undisputed position that the production of the expanded unit has been computed and clubbed with the first unit to reflect the meeting of the criterion. The competent authority has come to a definite conclusion that the expanded capacity had been created to show that the rate of production is maintained but it is fundamentally a subterfuge. The authority has also taken into consideration the different items produced and how there has been loss of production of EPBT in the first unit. The High Court has failed to appreciate the relevant facts and, without noticing that the respondentassessee had clubbed the production of the units, lancinated the orders passed by the forums below. 19. Mr. Jain has laid immense emphasis on the te....
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....club together the production of all of them to get the benefit for all. It would be well-nigh unacceptable, for what is required is that each unit must meet the condition to avail the benefit. 27. In the case at hand, as we have already held that clubbing is not permissible. It amounts to a violation of the conditions stipulated under subrule (11)(a)(i) of Rule 28-A and, therefore, the consequences have to follow and as a result, the assessee has to pay the full amount of tax benefit and interest. The approach of the High Court is absolutely erroneous and it really cannot withstand close scrutiny." 15. Mr. Jain contended that in the case before the Supreme Court, the original unit which had been granted exemption had ceased to exist and, therefore, the ratio of the judgement is inapplicable to the case before us. The submission is not well founded. The ratio of the judgement would equally apply to a unit which, though not closed, does not meet the requirements of sub Rule (11) of Rule 28-A. The question whether the requirements of sub Rule (11) have been met or not does not depend on whether the unit is closed or not. The question is whether the requirements of sub Rule (11) ....