TaxTMI 
TaxTMI 
2019 (3) TMI 1480
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....90, granted benefit of free sales tax deferral, for new units, to be started, in 75 backwards taluks. Relevant paragraphs are extracted hereunder:- "4. With a view to encourage more industries in Tamil Nadu, the Government direct that the following concessions also be made available to the industries: (a) For the industries to be started in the 75 backward taluks i.e. Other than the 30 most backward taluks, from among the 105 backward taluks, and in the industrial estates developed by any of the Government agencies including Madras Export Processing Zone, Madras Metropolitan Development Authority, the scheme of interest free sales tax loan/deferral ordered in the Government order first, third and fourth read above is modified as follows: (i) For the existing units undertaking expansion or diversification, deferral of sales tax will be given for nine years and the total amount thus given shall not exceed 80% of the additional investment made in fixed assets. (ii) For the new units, the total amount of deferral of sales tax will be given for nine years to the full extent of the total investment made in fixed assets. (b) The interest free sales tax deferral scheme is ex....
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....e the competent authorities to issue eligible certificates in respect to Small Scale industries and major and medium industries respectively. The respective sales tax assessing authority will assess the sales tax liability of the units for each year. The sales tax authorities concerned, based on the assessments will raise demands for deferral of sales tax without interest or waiver of sales tax after commencement of production by the units. But the tax payable for the year will be deferred/waived within the overall ceiling for which the eligibility certificate issued by the authority. The deferred instalments shall be payable by the assessed units after the completion of the period of deferral together with the sales tax of the current year, without any interest thereon. In the case the units avails the complete deferral/waiver benefit before the completion of specified deferment period of 5 years or 9 years as the case may be, the unit has to pay the normal sales tax immediately after the date of full availment of eligible deferral amount. The assessee of the unit for which the sales tax has been waived will start paying the current sales tax dues after the completion of the waive....
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....venteen thousands only) interest free for nine years from the month in which the holder's unit commenced its commercial production, i.e., from 1/7/1998 to 30/6/2007. 4. The actual shall however be the least of the amounts mentioned in 4.1 and 4.2 below:- 4 .1 (a): Actual sales tax liability on account of General Sales Tax Act, Central Sales Tax Act, Additional Sales Tax, Surcharge and Additional Surcharge liability accruing in favour of the Government during the period of deferral on the sale of finished goods manufactured by the unit. 4.2: 100% of the value of initial gross fixed assets i.e., Rs. 1521.17 lakhs (Rupees One thousand five hundred and twenty one lakhs and seventeen thousand only)." 6. A perusal of the above mentioned paragraphs would show that the eligibility was from 1/7/1998 to 30/6/2007. The appellant Company declared in its letter, dated 27/4/2001 that it had remitted sales tax, upto 31/3/2001 and requested re-schedulement, for the period of eligibility from 1/4/2001 to 31/3/2010. This request of the appellant was accepted, by letter No.ID/ST/JBMSL/2001, dated 14/5/2001. The relevant paragraph reads as under:- "3. Based on the above, the holder ....
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....duct of the appellant. The aforesaid order gives "complete exemption to the products of the industry from sales tax for a limited period of five years". The coal-ash that is produced as a result of the burning of coal as fuel is a product of the appellant-industry though it might not be the principal product for which the industry was established. Even so, being a product of the industry, it is entitled to the exemption given by the said order. This second question, therefore, must be answered in favour of the appellant." 9. The application made by the appellant, seeking benefit of deferral in sales tax, for sale of scrap, was rejected by SIPCOT, by its order, dated 11/5/2004. The rejection was challenged by the appellant, in W.P.No.6754 of 2005. Writ Petition was allowed. Since this judgment will have a significant bearing, on the final outcome of this case, the same is being quoted in its entirety. "5. I have heard Mr. N. Prasad, the learned Counsel appearing for the petitioner as well as Mr. Devaraj, learned Counsel for the first respondent and Mr. Shanmuga Sundaram, the learned Government Advocate representing the respondents 2 to 4, and perused the records. 6. The con....
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.... Mill. After elaborately setting out the manufacturing process in a cotton mill, the Division Bench in paragraph 5 and 6 of the judgment held as follows: 5. The word "product" has not been defined in G.O. P. No. 92. It only refers to the products manufactured by the new units established in the backward taluks to which the G.O. applies. The G.O. clearly recognises that the unit may manufacture more than one product. In the absence of any definition limiting the scope for the product only to the principal product, for the manufacturing of which the unit is established, the term "product" is capable of comprehending within its by-product as well, especially when such by-products are themselves distinct commercial goods, which are capable of being marketed separately and which are also subjected to tax as an item of taxation. 6. Moreover, the scheme of incentives formulated by the State is one which is intended to encourage establishment of new industries. The deferral on sales tax liability, while it would not include the liability, if any, on the purchase or raw material extends to all the products manufactured, is intended to enable the industries to become financ....
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....ight of this judgment, the appellant filed a representation, dated 31/10/2006 and a reminder, dated 26/11/2007. Despite the order passed by the High Court, in W.P.No.6754 of 2005, reported in {(2007) 6 VST 527}, the assessing authority, refused to give deferral, to the appellant, for the sale of scrap on the turnover of Rs. 8,12,27,823/-, Rs. 14,15,36,795 and Rs. 9,26,82,244/-, for the years 2001 - 02, 2002 - 03 and 2003 - 04, respectively. This order, was challenged in the instant writ petitions in W.P.Nos.18273 to 18275 of 2006. A learned single judge by the impugned judgment has dismissed the writ petitions. 11. Heard Mr.N.Prasad for Mr.N.Inbarajan, learned counsel for the appellant, Mrs.Narmada Sampath, learned Additional Government Pleader for the respondents 1 and 2 and Mr.Ramesh Venkatachalapathy for the third respondent. 12. Relevant paragraphs of the impugned common order, dated 25/4/2012, are extracted hereunder:- "26.Though reliance was placed upon a judgment in (2007) 6 VST 527 (Mad), in which a direction was given to the SIPCOT to reconsider the issuance of fresh eligibility certificate, the same was rejected. It was rather unfortunate when that writ petition ....
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....STC 58 (Mad)}, and the judgment of the Hon'ble Supreme Court, in ITC BHADRACHALAM PAPER BOARDS LTD., Vs. STATE OF ANDHRA PRADESH {126 STC 541}, quoted supra, came to the conclusion that left over residue would be a by-product and the sale of the by-product is also eligible for deferral of sales tax. 14. Reasoning of the learned Single Judge that earlier order was passed without hearing the authorities, is not correct. A perusal of the order, dated 13/9/2006, made in W.P.No.6754 of 2005, would show that Government Advocate was very much present. 15. Mrs.Narmada Sampath, learned Additional Government Pleader would contend that W.P.No.6754 of 2005 was challenged by Technical Stampings Automotive Ltd., which thereafter, became JBM Sungwoo Ltd., which thereafter, became Sungwoo Gestamp Hitech (Chennai) Ltd. She would further submit that till date, SIPCOT has not granted any eligibility certificate in favour of the present appellant. 16. According to her, in the absence of the receipt of any modified eligibility certificate from SIPCOT, tax levied on the sale of steel scrap, for the years 2001 - 02, 2002 - 03 and 2003 - 04, is perfectly valid. According to her since the elig....
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....standing. The project in India in the name of M/s. Sungwoo Gestamp Hitech (Chennai) Limited was conceived, successfully established and expanded to reach the current status and we are the No.1 Tier 1 vendor mainly solely for Hyundai Motor India (HMI) and providing employment for more than 2000 employees including direct and indirect workers (the "Indian Business"). The company has focused its operation from the beginning to manufacture and supply sheet metal components to HMI. Even though there are financial/equity participation by other investors, the entire Indian business in substance, belongs to, controlled and managed in entirety by Sungwoo Hitech, Korea. Share Holding Pattern We would like to reiterate that even though there was a change in shareholding pattern, the shareholders have ensured and will ensure at all times the main purpose of the Lease Deed has, is and will be complied with at all times, as described in the last recital of the Lease Deed: the plot is being utilised and has the character of an industrial plot for the benefit of other plots of the SIPCOT. Therefore, the purpose contemplated in Section 15 of the Lease Deed has been com....
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....t undergone a change in that the original promoters of the project viz., Tata Autocomp Systems Limited have now directly invested in the project. The Company is thus entirety is vested with the original principal promoter only, who alone manufactures the auto parts under their own technology, originally envisaged. Share transfer on16th March 2005 From : M/s. Mitsubishi Corporation To : M/s. Sungwoo Hitech Company Ltd, Korea % of shares : 19% Existing shareholder M/s. Sungwoo Hitech, Korea has bought the shares M/s. Mitsubishi Corporation to enable the company to concentrate on Hyundai, since Hyundai being Korea based customer. Share transfer on 4t h Feb 2009 From : Tata Autocomp Systems Limited To : M/s. Gestamp Toledo % of shares : 50% Our Company has allowed M/s. Gestamp Toledo to buy the shares from M/s. Tata Autocomp Systems, since Gestampt being a global auto player and supplying to Volkswagen, Ford, BMW, Nissan, etc., and company would like to take advantage of Gestamp global experience to support Hyundai operations. We, Sungwoo Hitech has ensured and never sold its shareholding (a....