TaxTMI 
TaxTMI 
2018 (8) TMI 941
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....ide the said order and its retrospective effect in case of the petitioner company and it is alleged that the said order is passed without jurisdiction and also against the settled principle of law as enunciated in the various judgments delivered by this Court as well as by the Hon'ble Apex Court. 2. The petitioner company was registered as a dealer under the Bombay Sales Tax Act, 1959 and is also registered as a dealer under Section 16 of the Maharashtra Value Added Tax, 2002 (for short 'MVAT Act') and the certificate of registration came into effect from 01.04.2006. The respondent No.1 is a State of Maharashtra through the Secretary Ministry of Finance whereas respondent No.2 is an authority under the MVAT Act, 2002 and discharging the duties under the Act and the Rules made thereunder. 3. Before adverting to the controversy involved in the present petition we would delve into the antecedent events which would be necessary to be referred to for an effective adjudication of the present Writ Petition. The existing regime of the Bombay Sales Tax Act, 1959, empowered the State Government under Section 41 to grant Tax exemption either in full or in part in public inte....
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..../new units in the areas covered by Group B,C,D or No Industry Districts which were created on or after 01.10.1988, additional fixed capital investment for the additional production or manufacturing facilities either for the manufacture of the same product or for diversification were eligible for incentives subject to a minimum stipulated threshold of additional fixed capital investment. The requirement of the additional fixed capital investment stipulated that it should exceed 25% of the gross fixed capital investment and in case of expansion, the additional fixed capital investment had to result in an increase of the existing installed capacity by at least 25%. The expression "Sales Tax liability" was assigned a definite connotation under the scheme to include sales tax/additional tax/turnover Tax payable by the eligible unit on the sale of finished products. The Sales Tax incentives under the scheme could be available by way of exemption or by way of deferral which was admissible to a new unit/pioneer unit as also in the case of expansion or diversification of units set up in Groups B,C or D or No Industry Districts. An exemption was available in respect of Sales Tax payable unde....
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....espect of the medium scale/large scale units as well as applicable to the small scale industrial units based on where it is a pioneer or a non­pioneer unit. The Gross Fixed Capital Investment was defined in para 3.8 (I)(i)(c) of the scheme which read thus :­ "3.8 Gross Fixed Capital Investment­ (I) Gross Fixed Capital Investment shall mean and include, in the case of (i) New Fixed Assets ­The value of new fixed Assets acquired at site and paid for; Explanation­ (a)................. (b)................. (c) Any acquisition of new Fixed Assets outside the project scheme accepted by the Implementing Agency can be considered for the purposes of proportionate incentives during residual eligible period provided such acquisition is not less than 25% of the Gross Fixed Capital Investment at the end of the previous financial year of the Eligible Unit." 5. The above paragraph came to be amended by a Government Resolution dated 06.07.1994 and the word "proportionate" came to be deleted. As a necessary sequel, it was stipulated that an acquisition of new fixed assets outside the project scheme accepted by the implementing agency could be considered for ....
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....portunity of being heard. Explanation­ For the purposes of the provisions contained in Section 41BA and 41BB the terms "Existing Unit, Eligible Unit, implementing agency, Eligibility Certificate and Certificate of Entitlement" shall have the same meaning as provided in the relevant Package Scheme of Incentives." 6. It is noted that the MVAT Act, 2002 came to be enacted by the State legislature and it came into force in the State of Maharashtra from 1.04.2005, which repealed the Bombay Sales Tax Act. Section 8(4) of the said act empowered the Government to provide for exemption for payment of whole of tax in respect of class or classes or sales of goods effected by unit holding as defined in Section 88 to whom the incentives are granted under the Package Scheme of Incentives, by way of exemption of payment of Tax. Chapter­XIV of the MVAT Act contained provision in regard to the Package Scheme of Incentives and it defines the terms "Certificate of Entitlement" and "Eligibility Certificate". The expression Package Scheme of Incentives included the 1988 and 1993 schemes. The Section 89 stipulated that where an eligibility certificate has been recommended by the implementi....
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.... after such increase. (ii) in case where there is no increase in production capacity, then for the Package Scheme of Incentives for 1993, the formula shall be as below :­ Eligible Turnover =Turnover x New Fixed Capital Investment Total gross fixed capital investments (1B) When the eligible turnover comprises of multiple finished products, then­ (a) the production capacity of each of the finished products shall be separately considered in determining the corresponding eligible turnover, and (b) eligible turnover shall relate to those products on which the eligible investment has made impact and when eligible investment does not add to production capacity, then it shall apply to all the finished products. 8. At the same time Section 93A came to be inserted to provide Section 93 shall apply to all eligible units, to whom eligible certificate and certificates of entitlement have been issued under any of the Package Scheme of Incentives if such certificates have been issued on or before the appointed date i.e. 1.04.2005. The said enactment contained Section 94(2) which provided that notwithstanding anything to the contrary contended in the ....
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....t also interest and penalty which was held to be violative of Article 14 and 19(1) (g) of the Constitution. As against this the specific stand of the State Government was that the Package Scheme of Incentives, 1993 was specifically amended on 6.07.1994 and a conscious decision was taken not to provide for proportionality. The State Government also clarified that an enabling provision in form of Section 41BB was already introduced in the Bombay Sales Tax Act, 1959 in the year 2001 but the said provision was not invoked by framing the rules and infact the Sales Tax Department had attempted, by way of administrative decision to impose a norm of proportionality which came to be stuck down by this Court. On consideration of the gamut of the matter, the Division bench did not find favour with the challenge to the constitutional validity of the Maharashtra Act No.22 of 2009 and arrived at a conclusion that the legislature has not transgressed the limitations on its constitutional powers while enacting the validating legislation. However, as far as sub­section (2) of Section 93 enactment was concerned which proposed to include a penalty and interest, it was held to be operating harshly....
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....rmulated by the State Government. The State Government in order to encourage the dispersal of industries in the Backward area of the State and in the existing regime of the Bombay Sales Tax Act has floated schemes in the form of Package Incentives, thereby exempting the eligible units from being burdened with the liability to pay Sales Tax either by way of deferral or by way of complete exemption. The petitioner submits that it acted upon the stipulations as contained in the 1993 Scheme by extending the existing unit in the Backward area of the State, for which the eligibility certificate was issued in its favour by the implementing agency namely State Industrial and Investment Corporation (for short referred to as "SICOM") on 21st July 1999 with financial ceiling of Rs. 267,16,66,000/­ (Rupees Two Hundred Sixty seven Crores Sixteen Lakhs Sixty six Thousand Only) to be deferred during the period from 01.09.1999 to 31.08.2013. The petitioner was also issued an entitlement certificate on 26.08.1999 and according to the paragraph 3 thereof, the petitioner was entitled to defer Sales Tax liability as per returns/assessment pertaining to the validity period mentioned in the certific....
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...."Sales Tax Liability" for the period of 14 years. In terms of the said scheme, the petitioner while submitting its periodical returns deferred the entire amount due for the period in question and it is specific case of the petitioner that the Assessing Officer approved the deferral of tax for that unit by passing the periodical orders of assessment. The quantum of amount to be deferred for the second unit was scaled at Rs. 880,49,94,000/­ (Rupees Eight Hundred Eighty Crores Forty­nine Lakhs Ninety­four Thousand) and the petitioner submitted periodical returns after deferring Sales Tax liability which were approved by the Assessing Authority who passed the orders of assessment, separately for that unit for the financial year 2002-­2003 to 2008­-2009. The petitioner has given the details of the quantum of amount deferred and confirmed in the respective orders of assessment by annexing a tabular form in support of its submission. The petitioner is aggrieved by the change of mode of availment of the benefits and it is stated in the petition that the Maharashtra Act No.22 of 2009 dated 16.12.2009 introduced an entirely new mechanism of computing the quantum of inc....
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....of the Package Scheme of Incentives floated by the State Government and it had resulted in creation of the legal relationship, which would bind both the parties and now it is not permissible for the State Government to go back on the promise contained in the form of Package Scheme of Incentives. The contention raised is that once the Government made the promise and the petitioner has acted upon such promise extended the unit and altered its position, then, the Government is bound to abide by the same. The petitioner submits that it has established its unit in the backward area, based on the representation made by the State and it complied with all the requirements as per law which were in existence prior to the amendment and now the State turning back on its representation in form of the modified scheme has deprived the petitioner of the benefits accruing to its unit in form of the promise given by the State and thus ite alleges that the amendment to the scheme which introduced a completely new mechanism is hit by the principle of promissory estoppel. According to it the impugned action was never contemplated under the scheme floated by the State of Government, which encouraged the....
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....liability as per the returns/assessment pertaining to the validity period mentioned in the certificate and none of the conditions made any reference to the production capacity to be maintained or enhanced by the petitioner. According to the petitioner it availed the incentives, referred in the scheme qua the Sales Tax liability, through returns submitted periodically by deferring the Sales Tax payable on the sale of finished products in terms of proportion of 78.32% of the total production and discharged its liability by making the payments for remaining percentage as reflected in the returns. The petitioner has given the details of the amount deferred by him from 1999-­2000 which reflect the periodical orders of assessments for each year, confirming the proportion of tax dues which were deferred, strictly in accordance with the entitlement certificate. According to the petitioner the financial celling of the quantum got exhausted in March 2008 i.e. much prior to the end of the validity period of the eligibility certificate ending on 31.08.2013. According to the petitioner he complied with all the conditions and the procedure prescribed under the scheme during the operative per....
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....med to be short paid with the consequential liability fastened on the petitioner to pay the interest. According to Mr.Joshi as far as the first unit is concerned, the quantum of financial ceiling having been exhausted, the petitioner made payment of tax for all their sale transaction from 01.04.2008 as an ordinary normal dealer and that was also confirmed by the Assessing Authority while passing the orders of the assessment for all the financial year preceding 2008-­2009. After reaching the financial ceiling for the first unit, according to Mr.Joshi the respondent No.2 i.e. Deputy Commissioner of Sales Tax (Refund and Audit) proposed to revise the orders of the assessment by issuing a notice of 02.02.2012, which was objected by the petitioner. It has the submission of Mr.Joshi that the scheme of deferral permitted the unit to defer the collection of tax and pay the same in installments. According to him the unit established by the petitioner, him which was pioneer unit, which was issued the eligibility certificate on 27.07.1999, by which the maximum entitlement of Sales Tax Incentives by deferral was not to exceed to Rs. 267,16,66,000/­ (Rupees Two Hundred Sixty seven Crore....
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....en Crores Sixteen Lakhs Sixty six Thousand Only). (l) The certificate is valid for the products and capacities enumerated below and pertaining to the investments related to this certificate (namely in Expansion) specified in column 2 and 4 respectively of the table given below :­ Sr.No. Product Capacity 1 2 3 1. Armade/Commandar/Utility (Single/Double Cab) Existing Proposed for Expn. Total After expn. 31250 Nos.p.a. 18250 Nos.p.a. 49500 Nos.p.a. (m) It is seen that the investment is made for expansion from 01.04.1995 onwards at Rs. 333.95 Crores in the existing Unit having a gross block of Fixed Capital Assets as on 31.03.95 which stood at Rs. 92.40 Crores. In terms of provisions of the 1993 Package Schme of Incentives, on the pro­rata basis of Investments i.e. Rs.333.95 Crores =Investment in expansion =78.32% Rs.426.35 Crores Total Investment after expansion the production at 78.32% of the total production shall alone be eligible for the benefits of deferral whereas in respect of 21.68 of the total production, the Unit has to discharge the tax liability on proata basis of investment indicated abov....
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.... bound by the principle of promissory estoppel and the petitioner entitled to full benefit and advantage of scheme. 16. We have also heard learned counsel Shri.Sonpal, appearing for the Respondent Nos.1 and 2 who would justify the impugned orders. Shri.Sonpal would submit that the petitioner is a dealer and the company incorporated the provisions of the Companies Act 1956, which is engaged in the manufacture and sale of automobiles and spare­parts thereof. According to Shri. Sonpal the petitioner was registered as a dealer under the erstwhile Bombay Sales Tax Act, 1959 as well as under the provisions of MVAT Act 2002. According him the dealer is known to produce utility vehicles like Scorpio and Bolero, Cars, Electric Vehicles, Picks up and Commercial vehicles. According to Shri.Sonpal the Maharashtra Act No.XXII of 2009 which substituted sub­section (1) of Section 93 granted the effect of deemed substitution with effect from 01.04.2005. According to him by virtue of sub section (1) of Section 93 which was inserted with a non­obstante clause, any eligible unit to whom the Eligibility Certificate and certificate of Entitlement have been granted on account of the incre....
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....case of Scorpio Vehicle. At that relevant time though the amended Section 93 was in existence that it was not given effect to and therefore, based on the records, the assessment were carried out and a notice in Form 309, prescribed under Section 25 of the MVAT Act was issued on 02.02.2012 with the gist of the order proposed to be passed under Section 25 of the MVAT Act. Mr.Sonpal would emphasises that the issue as regards the amended section 93 vide Maharashtra Act No.22 of 2009 is no more res integra and has been already decided by the Bombay High Court in the case of M/s.Jindal Poly Films Ltd V/s. State of Maharashtra against which a SLP came to be filed. According to him the challenge to the constitutional validity of the said Act has been turned down and it has been held that the legislature has not transgressed the limitations on its constitutional power while enacting the validating legislation. Thus, except for setting aside the penalty with a retrospective effect, the retrospective effect given to Section 93 has been upheld. Further he would submit that this Hon'ble Court in case of Pee Vee Textile had clearly noted that the legislative intent embodied in Section 41B....
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....y certificate under the Package Incentive Scheme 1993 along with entitlement certificate issued by the Deputy Commissioner of Sales Tax, Mumbai for expansion of its Unit located at Plot No.89, MIDC, Road No.17, Satpur, District­ Nashik for the manufacture of Armada, Commander, Utility (Single/Double Cab Vehicles ­Additional 18250 Nos.P.A. (Total after expansion 49 Thousand 500 Nos. per annum). The eligibility certificate describes the petitioner as "PIONEER" unit and the capital cost of the project for the eligible unit finds mentioned as Rs. 3395.83 (Rupees Three Hundred Thirty Three Crores Ninety Five Lakhs Eighty three Thousand). The maximum entitlement of the Sales Tax Incentives by way of deferral was slabbed at Rs. 2671.66 Lakhs (Rupees Two Hundred Sixty Seven Crores Sixteen Lakhs Sixty Six Thousand). The validity period from the entitlement certificate was slated to be 14 years from 1.09.1999 to 31.08.2013. The eligibility certificate was subject to review/monitoring every year and was issued for additional fixed capital investment of Rs. 3395.83 (Rupees Three Hundred Thirty Three Crores Ninety Five Lakhs Eighty three Thousand). The said certificate mentioned that....
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.... the Sales Tax Liability as per returns/assessment pertaining to period from 01­-09­-1999 to 31-­08-2013, covered by the eligibility certificate dated 21-­07­-1999 to above or for such a shorter period as may be reduced by the implementing agencies which issued the said eligibility certificate. The conditions stipulated in the said entitlement certificate, enumerated several conditions which included the condition that the deferment shall be permitted only if the holder of the certificate files the returns by the dates prescribed and also that the deferment of Sales Tax liability shall be in respect of raw material purchased and sales of goods produced in the eligibility unit for the period from 1.09.1991 to 31.08.2013. It was also stipulated that the petitioner shall pay the entire amount as per the order to be passed under Section­ 33, 35, 55, 57 or 62 of the Bombay Sales Tax Act and under Section 9 of the Central Sales Tax Act for a period not exceeding in total 10 years as computed from the last date prescribed for publishing the last return for the period of each of the assessment order passed. After that the holder of the certificate shall pay the enti....
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....s Forty­nine Lakhs Ninety­four Thousand). The validity period of the said certificate was for 14 years i.e. from 1.10.2002 to 30.09.2016 to be extended by three years till 120% of the FCI is reached whichever is earlier. The said certificate of eligibility also conained stipulation that it shall automatically stand curtailed :­ (a) From the point when the total Sales Tax Incentives admissible under the Scheme/Sales Tax Incentives as per entitlement under the scheme of availed on/drawn exceeds is limit laid down in para 5 of the 1993 Package Scheme of Incentive as modified by Government Resolution dated 6.07.1994 and read with provision 1 and 2(a) of the Government Resolution dated 9.07.1999 namely 130% of the gross value of fixed capital investment actually made subject to ceiling of 130% of Rs. 67730.63 Lakhs i.e. Rs. 880,49,94,000/­ or; (b) From the date the certificate of entitlement issued by the Commissioner of Sales Tax is cancelled or revoked, whichever events occurred earlier. 24. This certificate was also subjected to certain terms and conditions. This was followed by a certificate of entitlement issued by the Deputy Commissioner of Sales Tax, Maha....
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.... new fixed assets outside the project scheme subject to the stipulation that such acquisition was not less than 25% of the gross fixed capital investment. However, the State Government by issuing a resolution substituted the said condition thereby removing the word proportionate, resultantly not only the units acquiring new fixed assets outside the project scheme but also the existing units acquiring the new fixed assets not less than 25% of the gross fixed assets where held eligible for enjoying the incentives under the 1993 scheme irrespective of the fact that the acquisition of the new fixed assets resulted into increase in production of capacity or not. However, the quantum is limited to 75% of the incentives available to new unit. The eligible unit however is required to obtain a separate eligibility/entitlement certificate from SICOM/Sales Tax Authorities with the quantum of incentives which the existing unit is entitled to and the period within which these incentives could be availed. Thus neither para 3.8(I)(i)(c) nor any other provision under 1993 Scheme or any provision contained in BST/CST Act provided for the utilization of the incentives in each year proportionate to t....
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....classes of dealers under the different schemes, it was held that it was not open for the Deputy Commissioner of Sales Tax, to direct the assessee to avail the incentives under the 1993 scheme in proportion to the production attributable to the acquired fixed assets. In the result the reference was answered in the positive in favour of the assesee and against the revenue. This judgment was delivered by the High Court on 13th October 2008. 28. Section 41BB of the Bombay Sales Tax Act came to be inserted on 27.03.2001, introducing a provision of proportionate incentives to an eligible unit in certain contingencies which included a provision of making the incentives dependent on the turn over of sales and purchases to be arrived at by applying a ratio prescribed by the State Government to the total turnover of sales and purchases of the said unit in that year. By introduction of the said provision the benefits availed of by an eligible unit in contravention of subsection (1) was deemed to be withdrawn and such unit was liable for payment of tax in respect of turnover of sales and purchases in respect of the turnover and the benefit which was withdrawn was directed to be recovered as....
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....and it deferred the payment to the tune of 78.68% for period of 10 years. However, in the meantime in March 2008 the ceiling limit in terms of the entitlement certificate was achieved and the certificate got cancelled. The argument of the learned counsel for the petitioner is that the Amendment Act of 22 of 2009 is not applicable to its case since on the date of the amendment the eligibility certificate was already cancelled, in view of the contingency that has occurred as contemplated in the entitlement certificate. As per the petitioner the amendment which curtailed the incentives to be availed in proportion to the total capacity of the unit, did not apply to the petitioner at all. The said submission is not worth consideration since Section 93(1) stood amended with retrospective effect and by the validating Act, it has been held to be on the statute book from 1.04.2005. The contention of the petitioner that there was a promise contained in Package Scheme of Incentives and it could be carved out from its various terms and condition and therefore, it could not have been curtailed in the manner in which it has sought to be done also is not a sustainable argument. By the Package ....
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.... transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the Government or public authority." 30. The learned counsel for petitioner has placed reliance on the judgment in the case of Devi Multiplex Vs. State of Gujarat AIR 2015 SC 2348. The said judgment dealt 'with a situation where the Government of Gujarat had announced policy' named "New Package Scheme of Incentives for Tourism Projects, 1995­2000" with a view to make available all fiscal and non fiscal incentives, reliefs and concessions enjoyed by industries to 'Tourism' which was accorded the status of an industry, in order to give a boost to tourism sector by attracting higher investment in the areas with tourism potential and to generate employment opportunities. The scheme promised incentives in the form of Tax holiday of 5­10 years in respect of exemptions from Sales Tax, Turnover Tax, Electricity Duty, Luxury Tax and Entertainment Tax etc. It also promised an initial perio....
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....cle 14 of the Constitution, being unreasonable, then, in a given case depending upon the facts and circumstances of the case, for testing the reasonableness of a provision, the said principle might become relevant. However, having regard to the facts and circumstances of the case and dealing with the classification made by the legislature in withdrawing the exemption qua edible oil units only is neither arbitrary nor unreasonable. It was held that the doctrine of promissory estoppel, assuming it applies, would be displaced in such a case, because on facts equity would not require that the legislature should be held bound by the promise or representation made by the Government. In the very nature of things the taxes are imposed in the public interest and taxation is the sovereign power of the legislature and raising revenue of the State is in the public interest and therefore, it cannot be a restriction on trade or business and cannot be said to be violative of Article 19(1)(g). 31. The existing regime in view of Bombay Sales Tax Act 1959 contained a provision for exemption and it was to be found in Section 41. It is stipulated that the State Government may, if it is necessary to....
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....e State Government and when it granted benefits of tax exemption either in full or partial extent, it was done in exercise of powers conferred under Section 41 of the Bombay Sales Tax Act, 1959 as well as the section itself states that the power of exemption is being conferred by the State Government in order to enable the Government to act in public interest. It was open to the Government in exercise of its powers under Section 41 of the Bombay Sales Tax Act to exempt any class of sales or purchases from payment of whole any tax payable under the provisions of any Act. It is open to the Government to restrict the benefits to the units set up in the backward areas which are engaged in the production of same type of goods as a new unit. The exemption accorded to new manufacturing or production units set up in backward areas by way of incentives for development of industries in backward areas, promotion of dispersion of industries all over the State, and for industrialisation of and creating employment opportunities in the backward areas, has a sound economic and public policy underlying it. The tax exemption was granted so as to encourage the new industrial units to be set up in the....
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....ument or sound legal. Even though some concession was conferred on the Petitioner by virtue of a scheme, it is not an absolute concession and as the package scheme of incentives was subject to amendment, it cannot be thus said that the State Government has permitted the Petitioner to enjoy the benefits absolutely without any fetters. In any contingency, the exemption benefits which the Petitioner enjoyed till the year 2009 @ 70% deferral are not sought to be completely withdrawn. The Scorpio unit of the Petitioner is a unit separate in all aspects and it enjoys 100% deferral. Under the 1993 Package Scheme, the incentives were only to be availed by the unit which has expanded its investment by more than 25%. By insertion of Section 93 with retrospective effect, the Petitioner would fall within the purview of the said Section and which has been given effect from 1.4.2005. Once the validity of Section 93 has been upheld, the Petitioner cannot be permitted to argue that he was entitled to enjoy the benefits in terms of its eligibility and entitlement certificate. The attempt of Mr.Joshi by urging that the petitioner reached the ceiling limit in 2008, hence, the amended cannot be applie....
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.... to law, to grant exemption it was fully within its powers to revoke the exemption by means of a subsequent notification. This is an additional factor militating against the contentions of the appellants." 34. Further the contention of the appellant was also found to be untenable because of the fallacy contained, in their submission as that is wrong assumption that the appellant had acquired a vested right. Their lordship observed that the High Court rightly repelled the plea of acquiring vested right and an entitlement to claim exemption from payment of tax for period of five years notwithstanding the revocation of exemption and that the exemption granted by way of concession for encouraging entrepreneurs to start industries in rural and under developed areas and it was always open to the State Government to withdraw or revoke the concession, by means of a legislation. The principle of promissory estoppel cannot be stressed against the statue. That being so in the given case and it was sought to be done by way of notification, the appellants were held entitled to the benefit of tax exemption for a limited period during which the concession was offered by the Government. 35. ....
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....ed, any claim is incorrectly granted or that the liability to tax is understated, or (b) in any case, the order is erroneous, in so far as it is prejudicial to the interests of revenue, and after examination, may, by serving on the dealer a notice in the prescribed form, pass an order to the best of his judgment, where necessary. (2)(a) For the purpose of the examination and passing of the order, the Commissioner may require, by service of notice in the prescribed form, the dealer to produce or cause to be produced before him such books of accounts and other documents or evidence which he thinks necessary for the purposes aforesaid. (b) No order under this section shall be passed after the expiry of five years from end of the year in which the order passed by the subordinate officer has been served on the dealer." 37. A perusal of the said provision would reveal that the superior officer of the Rank of Commissioner, may on the information received or on his own motion call for the record of an order including an order passed under Section 25 itself or any order in appeal passed under the Act, rules or notification by any officer subordinating to him and he would t....
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....nd is able to identify the sales and purchases pertaining to the eligible investment however at the time of visit to the manufacturing facility of the dealer, the press shop, paint shop and assembly shop was found to be common. The Scorpio was found to be a basically utility vehicle and it was found to be an expansion unit in continuation in light of the two eligibility certificates issued for expansion in succession. On a conclusion being derived that there are no separate account of sales and purchases not only pertaining to the investment of the eligible two unit but also vehicles in production capacity, it was found that the case of the dealer not covered by Clause (a) of Section (1A) of Section 93 of MVAT Act as amended by the Maharashtra Act No.22 of 2009 but was found to be covered by Clause (b)(1) on the basis of the increase in production capacity and therefore the provisions of sub­section (2) and Section (3) were attracted. By virtue of the said provision the benefits if any availed by an eligible unit in contravention to subsection (1) shall be deemed to have been withdrawn and the unit is held liable to pay tax including penalty and interest, if any, in respect of ....
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....sume that the exemption was wrongly granted and it could not be cancelled. Another judgment relied by Shri.Joshi in case of Birla Jute and Industries Ltd. V/s. State of M.P. and Anr. 2000 (S.C.) Vol 119 where the Hon'ble Apex Court held that there was no justification for reviewing the certificate granted after long time and after its benefit has been availed is also not applicable since perusal of the facts of the case would reveal that the eligibility certificate issued to the appellant for raw material for entry tax sought to be reviewed after the expiry of the period specified in the certificate on the ground that the items in addition to raw materials were also included for claiming exemption. In the peculiar facts and circumstances of that case the Hon'ble Apex Court has observed that there was no justification for reviewing the said certificate after the term had expired and long after the benefit thereunder was availed by the appellant. However, in the present facts and circumstance the review is in exercise of statutory power conferred on the authority and specifically when the statue contained a provision for recovery of the said amount. 39. In this backdrop....
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....he utility vehicles and Scorpio vehicles is different and not capable of being interchanged. The authority has also observed that no concrete material has been brought on record to show that there are no purchases which are not vehicle specific and cannot be interchanged. The Reviewing Authority was not convinced with a mere averment that there are separate accounts of purchases in absence of any specific material brought on record and Reviewing Authority has also found fault with the finding recorded by the Assessing Officer on the basis of the existing material that there are separate account of purchases. The finding reached by the Assessing Officer after due inquiry is found to be erroneous. The Reviewing Authority was satisfied that the essence of inquiry in the review proceedings is not about the parts used in the assembly of utility vehicle or Scorpio but from what material these parts are produced and whether the basic raw material is interchangeable or not. It is further observed by the authority that it vehicle specific steel is ordered, then, it is not capable of being used for different model or vehicle and if it is not the case then the steel ordered for production of ....