TaxTMI 
TaxTMI 
2017 (2) TMI 289
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.... the Constitution of India. 4. The Petitioners claim these reliefs on the footing that Petitioner No.1 is a public limited company and engaged in the business of manufacture and sale of Graphite Electrodes. It is registered under the Bombay Sales Tax Act, 1959 ("BST Act") and holds a registration certificate. It also holds a registration certificate under the Central Sales Tax Act, 1956. It is situated in the backward area of the State. Hence, the State Industrial and Investment Corporation of Maharashtra Limited ("SICOM") granted an Eligibility Certificate dated 12th February, 2002 under the Package Scheme of Incentives, 1993 valid for a period from 1st April, 2002 to 31st March, 2007 with sales tax incentive for Rs. 990.90 Crores for manufacture of Electrodes. Pursuant to this certificate, the Deputy Commissioner of Sales Tax, Maharashtra State, Mumbai issued an Entitlement Certificate dated 18th March, 2002 effective from the above dates. The eligible industrial unit has to exercise an option to claim exemption from payment of sales tax or deferral of tax collected which is required to be paid after 10 years. The Petitioners opted for deferral and in terms of Rule 31B of the Bo....
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.... 1st April, 1997. For the purpose of sub-Entries 2 and 3 certain words were added. 9. It is in the light of these two Notifications, the Petitioners contended that they have similarly situated industrial units. Merely because the amendment appeared by way of Explanation-V, it does not mean that it was applicable only to dealers holding Eligibility Certificates and opting for exemption. The industrial units like the Petitioners who opted for deferral could not have been excluded. Their exclusion is arbitrary and discriminatory. Though these submissions were rejected by the Tribunal and the Appeals of the Petitioners were dismissed, it is stated that the Tribunal at the instance of the present Petitioners referred for opinion of this Court the issue of discrimination as projected in the present Petition. 10. However, the Petitioners having been advised on the basis of the information obtained under Right to Information Act, 2005 to file substantive proceedings that in this Writ Petition the afore referred reliefs are claimed. 11. Mr. Surte, learned counsel appearing on behalf of the Petitioners would submit that the Petitioners have pointed out from the Notification that th....
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.... violation of fundamental provisions (sic rights) the elaborate submissions explainaing that it is not warranted is mentioned in ensuing paragraphs. 6. I say that the notification No. SAT 1104/CR-38-A/Taxation- 2 dt 1.11.2004 is "finished product" for which exemption is notified by entry E-3 shall mean and include the "Duty Entitlement Pass Book" which is earn by the dealer by exporting out of territory of India the goods manufactured in the eligible unit. The effect of the notification is that the DEPB itself is goods manufactured and if dealer sells the same it will be exempted from sales tax. The Notification Entry E 3 is for exemption in which case no tax comes to treasury from sale of goods in eligible unit. It cannot be equated with deferral unit where the eligible unit collects the tax and defers payment by 10 years payable in six yearly installments. There is no escape from payment of tax by the deferral unit. It is different class by itself. Therefore when two categories are different classes, rule of extending benefit to incentive differently cannot be said to be discriminatory or violative of Article 14. The classification is reasonable and rational. Not extending the b....
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....ncentives and the 1993 Package Scheme of Incentives, the expression "finished products", shall be deemed to include Credit of Duty Entitlement Pass Book which is earned by the said dealer by exporting out of the territory of India, the goods manufactured in the eligible unit, whether mentioned or not in Eligibility Certificate granted to the said dealer and on the sale of which no tax either in part of full has been paid." 15. Then, there is another Notification of that date and which seeks to amend the Government Notification dated 22nd September, 1995. That is a Notification issued in exercise of the powers conferred by sub-section (1) of Section 41 of the BST Act. The insertion is that with effect from 1st April, 1997, the inserted words shall be taken to have been appearing in the Explanation-V. Thus, the Explanation-V would emerge on the statute book after the Explanation-IV and with effect from 1st April, 1997. Thus, the Petitioners understood this to mean that the Notification refers to Entry- 3 of Group-E to which Explanation-V has been added with retrospective effect. Therefore, for the purpose of Entries-2 and 3 the words "goods manufactured" and "finished products" shal....
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....goods manufactured by such industrial unit, covered by the eligibility certificate, beyond the period prescribed under rule 29. (b) permit an eligible industrial unit which is a dealer registered under the Act and which has been granted an eligibility certificate under the 1988 Scheme, falling under the Package Scheme of Incentives, to defer the payment of purchase tax and additional tax (if applicable) payable on purchases of raw materials as mentioned in Explanation II to this rule and sales tax, additional tax (if applicable) [surcharge and turnover tax (if applicable)] payable on sales of goods manufactured by such industrial unit and of scrap goods, and of by-products covered by the eligibility certificate, beyond the period prescribed in rule 29. (c) permit eligible industrial unit which is a dealer registered under the Act and which has been granted an eligibility certificate under the 1993 package scheme, falling under the Package Scheme of Incentives, to defer payment of purchase tax and additional tax (if applicable) payable on purchases of raw materials as specified in Explanation II to this rule and sales tax, additional tax, (if applicable) and surcharge and turnover....
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....lopment Corporation, as the case may be or to such shorter period as may be determined by the SICOM or as the case may be the relevant Regional Development Corporation; (bi) in respect of clause (c) of sub-rule (1) such deferment shall be restricted to the purchase tax and additional tax (if applicable) payable on purchases of raw materials as specified in Explanation II to this rule and sales tax, additional tax (if applicable) mum-6 surcharge and turnover tax (if applicable) mum-6 payable on sales of finished products as defined in the Package Scheme of Incentives, 1993 and mentioned in the eligibility certificate which are manufactured in the said unit. The deferment in respect of sub-rule (1) shall be restricted to the period by which monetary ceiling gets exhausted or till the last day of the period covered by the eligibility certificate issued by SICOM or the relevant Regional Development Corporation or the relevant District Industries Centre, as the case may be, or to such shorter period as may be determined by the SICOM or the relevant Regional Development Corporation or, as the case may be, the relevant District Industries Centre; (c) the Commissioner may initially perm....
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....e or places of business and such unit has obtained authorization and/or permit in regard to activities not pertaining to the eligible industrial unit it shall not use the authorization or permit for making any purchases for the purposes of the business and activities pertaining to the said eligible industrial unit; (i) the tax which is deferred under the provisions of this rule shall be immediately recoverable at any time prior to the expiry of the period of deferment in any one or more of the following circumstances, namely,- (i) if the SICOM or the relevant Regional Development Corporation (or the relevant District Industrial Centre, which issues the eligibility certificate, for reasons to be recorded in writing, a copy of which shall be forwarded to the Commissioner, requires the eligible industrial unit to pay forthwith such amount as may be determined by the concerned implementing agency on the said unit contravening any of the provisions of the Package Scheme of Incentives,or the conditions of the eligibility certificate, or the stipulations or undertaking as per the agreement made in connection with the grant of incentive, under the said Packages Scheme of Incentives, or o....
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....ission to defer the payment of taxes granted under any of these rules shall be construed as a permission to defer payment of any of such tax or taxes as reduced by set-off, refund, or, as the case may be, draw-back to which the eligible unit is entitled under the Act or the rules. Explanation V : The word "manufacture" or its cognate expressions, used, in this rule and rule 31C in respect of units certified by the State Industrial and Investment Corporation of Maharashtra Limited (SICOM) would include the following processes, namely, - (1) Conversion of hot rolled sheets/strips into cold rolled sheets/strips; (2) Conversion of steel sheet/strips into galvanized sheets/strips; (3) Conversion of thicker Gauages of iron and steel sheets into thinner garage of iron and steel; (4) drawing of wire from wire rods or galvanised wire; (5) Drawing tubes and pipes; and (6) Giving heat treatment, threading and casing of seamless pipes;]" 17 Hence, perusal of both Rules, namely, 31AA which provides for calculation of the cumulative quantum of benefits and Rule 31B, which provides for conditions for permission to defer payment of total amount of tax as per the return for a specified peri....