TaxTMI 
TaxTMI 
2016 (9) TMI 465
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....f the Haryana General Sales Tax Act, 1973 (for short, 'the Act') enables the State Government to provide for tax incentives. In exercise of powers conferred under the aforesaid provisions, Rule 28-A was inserted in the Rules. In terms of the aforesaid provisions, the petitioner applied for issuance of eligibility certificate vide application dated 19.8.1996, which was taken up in the meeting of the Lower Level Screening Committee held on 28.10.1997 and rejected the same. The appeal filed against the order of the Lower Level Screening Committee was also rejected by the Higher Level Screening Committee in the 74th meeting held on 18/19.6.2001, which was communicated to the petitioner vide memo dated 3.10.2001. 5. Challenging the aforesaid communication, learned counsel for the petitioner submitted that Rule 28-A(2)(f) of the Rules defines eligible industrial unit, whereas Rule 2(n) thereof defines notional sales tax liability. The ground on which the application of the petitioner for grant of eligibility certificate has been rejected is totally contrary to the provisions of Rules. The Rules contained a negative list specifying the products, the manufacturers of which are n....
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.... aside. 7. On the other hand, learned counsel for the State submitted that idea behind incorporating the Rules was to give benefit of exemption from payment of sales tax on the goods manufactured by an industrial unit. In case the goods are otherwise tax free, there is no question of giving any benefit. She further submitted that Section 28A(4)(a) of the Rules provides that the benefit for the purpose of arriving at the limit of tax exemption/ deferment, the notional tax liability is to be considered, which means amount of tax payable on sale of that product. Once there is no tax payable on the furnished product, there is no use in issuing the eligibility certificate. The idea behind the scheme was to give exemption from payment of tax on sales and not on purchases. As per item 66 in Schedule-B of the Act, the goods manufactured by the petitioner are tax free. The benefit of exemption from payment of purchase tax has been given to the exempted units, whose products are taxable and not tax free. 8. In CWP No. 11835 of 2000, additional contention raised by learned counsel for the State was that the petitioner therein had sought clarification, which was given vide communication ....
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.... amount of tax payable on the sales of finished products of the eligible industrial unit under the Local Sales Tax Law but for an exemption computed at the maximum rates specified under the Local Sales Tax Law as applicable from time to time; and Explanation: The sales made on consignment basis within the State of Haryana or branch transfer within the State of Haryana shall also be deemed to be sales made within the State and liable to tax; (ii) amount of tax payable under the Central Sales Tax Act, 1956, on the sales of finished products of the eligible industrial unit made in the course of inter-State trade or commerce computed at the rate of tax applicable to such sales as if these were made against certificate in Form C on the basis that the sales are eligible to tax under the said Act. Explanation: The branch transfers or consignment sales outside the State of Haryana shall be deemed to be the sale in the course of inter-State trade or commerce. Note: The expression and terms, if any appearing in this rule not defined above shall unless the context otherwise requires carry the same meaning as assigned to them under the Act and rules made thereunder. xx xx xx Rul....
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....x xx 27 (a) and (b) xx xx (c) Goods leviable to tax at the stage of first sale when sold to a registered dealer who is availing exemption from tax under the industrial policy of the State Government, for the purpose of use in manufacture or processing of goods by him for sale or for the purpose of use in packing of the goods manufactured or processed by him subject to furnishing a declaration in form STD-4 appended to this notification, by him. Nil 28. to 80. xx xx SCHEDULE- B (See Sections 6 and 15) Sr. No. Description of goods Conditions and Exceptions 1. 2 . 3 . 1 to 66 xx xx 67. Cattle feed, that is to say, a mixture of rice polish, rice bran deoiled, gram churi, mustard extraction, molasses, barley, sprout, salt, mineral mixture, urea and damaged wheat. 68 to 82. xx xx 12. The case set up by the petitioner is that the unit set up by him for manufacture of cattle feed came into commercial production on 23.5.1996. As intimated, the raw material required for manufacturing cattle feed was deoiled cake, rice bran, chemicals, barley, malt sprout bardana, molasses, et....
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....in Schedule- III is not entitled to the benefits envisaged under Rule 28A of the Rules. The Schedule-III as applicable on the relevant date is extracted below:- Serial No. Industries/class of industries 1. Oil expellers (including units set up under Rural Industries Scheme) 2. Dall Mills and Rice Mills (including units set up under Rural Industries Scheme) 3. Steel and Wooden furniture. 4. Stone Crushers (including units set up under Rural Industries Scheme) 5. Power cables except XLP cables and fibre optic cables. 6. Paraffin wax based industries excluding chlorinated Paraffin wax and the industry where the paraffin wax is required in nominal quantity, i.e., only upto 5% of the total raw material consumed by the unit 7. Corrugation of G.P./B.P. Sheets 8. Caustic soda units except those based on membrance cell technology. 9. Simple fabricated items like trunks, buckets, gamlas, windows, grills, trussess, etc. 10. Ethanol (Ethyl Alcohol) based industries except nonmolasses alcohal industries. 11. Khandsari units 12. Bricks made of ordinary earth including mechanized bricks where the ordinary of earth conte....
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....tioned therein. Meaning thereby there is no bar as such to issue eligibility certificate to a unit engaged in manufacture of cattle feed or for that matter any product which may be tax free on the date, the eligibility certificate is issued, in case specifically not mentioned in the negative list. It merely be noticed here that the product which may be tax free today may be taxable tommorow. 18. The contention raised by learned counsel for the State that the benefit of exemption from payment of tax being available on the txable turnover and there being no taxable turnover of the petitioner, it is exercise in futile to issue him eligibility certificate, is merely to be noticed and rejected, for the reasons that the quantum of benefit or type of benefit which the industrial unit may avail after issuance of eligibility certificate is a stage subsequent to the issuance thereof. As has already been referred to by the petitioner that in terms of notification issued by the Government, an eligible industrial unit availing exemption from payment of tax may be entitled to purchase goods without payment of tax. In the overall scheme, the object may be to promote industrialisation. This Cou....