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2019 (4) TMI 924
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....he facts of the case are that thepetitioner is a registered companyincorporated under Indian Companies Act andengaged in the business of manufacture andsales of electric and electronic goods such asColour Television, Washing Machine, PrintedCircuit Board, Microwave, Refrigerator etc. The petitioner has established a new unitand availed exemption under Section 4-A ofthe U.P. Trade Tax Act, 1948 under expansion,diversification, modernization or backwardintegration as provided under the Act/notification. The State Government from time to timehas issued various notifications grantingexemption from payment of tax to the newunit or to the units undertaken expansion,diversification, modernization within a periodprescribed and condition mentioned thereunder. The petitioner established a new unit withthe investment of more than Rs. 50 crores andcommenced its commercial production on9.3.1998. The petitioner was granted EligibilityCertificate for a period of 15 years from thedate of first sale i.e. 27.3.1998 or to theextent of 200% of the fixed capital investmenti.e. Rs. 1,02,75,90,892/-, whichever is earlier. The petitioner undertook the expansion withina period of five years fro....
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....ers from manufacture ofcomponents. The petitioner filed a review applicationunder Rule 25(3)(C) before the authorities. The respondent by order dated 11.7.2013rejected the review application of thepetitioner on the ground that the Tribunal inthe case of Samsung India Electronics Limited,had rejected the claim of exemption in respectof investment made on moulds, dyes and jigswhich was given to the suppliers for useoutside the factory. The petitioner assailed the said order byway of appeal before Full Bench of CommercialTax Tribunal, U.P., Lucknow. The Tribunal by itsorder dated 17.12.2013 allowed the appeal ofthe petitioner and has remanded the matter torespondent No. 3 with the direction as to makean inquiry to the effect that moulds, dyes andjigs were being exclusively used formanufacture of components to be used by thepetitioner along with any other documents ormaterials. In pursuance of the remand order dated17.12.2013, a show cause notice dated 2ndDecember, 2014 was issued seekingexplanation from the petitioner to clarify andprovide material to show as to how moulds,dyes and jigs given to its suppliers/vendors formanufacture of components to be suppliedonly to the p....
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....epetitioner that in pursuance of the Tribunal'sremand order the Divisional Level IndustrialDevelopment Authority Committee has passedthe order after due verification of material onrecord i.e. Chartered Accountant Certificate,agreement with the supplier, affidavit of thesuppliers, assessment orders of the supplier,supplier invoice, supplying component back tothe petitioner etc. Thereafter, a detailedinquiry was made by the G.M.D.I.C., GautamBudh Nagar and Joint Commissioner(Executive), Commercial Tax, Gautam BudhNagar and these two authorities havesubmitted a detailed report in favour of thepetitioner. These reports have not beendisputed by the respondent No. 2. It was alsoargued that no contrary evidence has beenproduced on record by respondent No.2disputing the material brought on record bythe petitioner to show the order grantingaddition of investment made towards moulds,dyes and jigs were not exclusively used formanufacture of components of the petitionerby the respective vendors. It was also argued by the counsel for thepetitioner that the order of the Tribunal hasbecome final. The petitioner is legally entitledfor addition of investment made in moulds,dyes and jigs, as ....
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....ovisions of section 10(2) of the Act in so far as they providean appeal against an order granting or refusing to grant aneligibility certificate would become redundant and theCommissioner would become a Judge in his own cause. In myview the two provisions have to be given a harmoniousinterpretation and when the provisions of sub-section (3) conferpowers of correcting legal or factual error made by the authoritygranting an eligibility certificate, this power has to be restrictedto clerical or arithmetical errors which are patent and apparentfrom record and not errors about which there can be a rationaldebate. As stated above, in the present case, there is a debatebetween the parties as to whether the new products Coca Colaand Fanta which admittedly have different composition from theearlier products can be described to be goods of the samenature or they are of a nature different from thosemanufactured earlier and since the notification dated July 27,1991 also provides for exemption in the case of a unitundertaking expansion, there has also to be a debate whethereven if the two type of goods were of the same nature theeligibility certificate granted to the revisionist should have bee....
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....tate of UP. 1986 SCC Online All 801 "18. We are unable to accept the contention. Theexplanation in the above notification sets down the requisiteprovision for the grant of exemption or the facility of reducedrate of tax for such industrial units which fulfil the conditions. This power is to be exercised by the State Government throughDirectorate of Industries, Uttar Pradesh, as a small, handloomor handicraft industry or an industrial licence granted by theIron and Steel Controller or the Textile Commissioner or theDirector,-Sugar, or the Director-General of TechnicalDevelopment or the Government of India. There is nothing inthe above notification to show that the above power is to beexercised by the Sales Tax Commissioner or any of the officersof the sales tax department. If a party does not fulfill therequirements for the grant of exemption or reduced rate of tax,it would not be granted such exemption or even the eligibilitycertificate. In case it was wrongly issued, the power to cancel itwould be with the State Government or the officers mentionedabove. It is well established that the power to grant includes thepower to cancel. The Sales Tax Officer or the Sales....
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....viso to section 4-A(3) of the Act furtherprovides that no order under subsection (3) cancelling theeligibility certificate shall be passed without giving the dealer areasonable opportunity of being heard. Learned StandingCounsel could not place before us any provision in the Act whichempowers the Sales Tax Officer to examine the validity ofeligibility certificate granted under section 4-A of the Act or tocancel the same and, therefore, respondent No. 2 had nojurisdiction to ignore the eligibility certificate issued undersection 4-A of the Act so long it was not cancelled or withdrawnby the competent authority. The contention of the learnedStanding Counsel that since by suppressing the material facts,the petitioners have obtained the certificate, in our view, doesnot give handle to the Sales Tax Officer to ignore the certificateuntil it is cancelled by the competent authority, i.e., the StateGovernment or any officer empowered by the State Governmentin this regard. In our view, if an applicant or industrial unit haswrongly obtained eligibility certificate by furnishing wronginformation, it is open to the Sales Tax Officer to move theauthority who has granted the eligibility certific....
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.... ifaggrieved there is remedy to file an appealbefore the Tribunal and writ petition is notmaintainable. He relied upon the judgment ofApex Court reported in AIR 2013 SC 3518 CITvs. Vijaybhai N. Chandani. Mr. R.P. Singh, counsel for the RespondentNos. 3 & 4, has relied upon the report ofG.M.D.I.C. and argued that District LevelCommittee has rightly granted the EligibilityCertificate, as there is no infirmity in the orderWe have heard the counsel for the partiesand perused the record. We also take judicial notice that theexemption from payment of Sales Tax wasinitially granted by the State Governmentthrough U.P. Act No. 22 of 1984 with effectfrom 12.10.1983 by introducing Section 4Awhich provides that "the State Government isof the opinion that it is necessary so to do forincreasing the production of any goods or forpromoting the development of [any] industryin the State generally or in any districts orparts of districts in particular, it may onapplication or otherwise, [in any particularcase or generally, by notification,] declare thatthe turnover of sales in respect of such goodsby the manufacture thereof shall, during suchperiod not exceeding [ten years] [from suchdate on or....
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....businessaccordingly. The case in hand shows that fourtax regime have changed and presentlycountry in under new G.S.T. Regime, the oldpending cases should be decided at theearliest which will be in the interest of both theparties i.e. petitioner as well as the State andwe, therefore, reject the contention of therespondent for relegating back the petitionerto approach the Commissioner in pursuance ofnotice issued under Section 4-A(3) of the Act. Now, we proceed to examine the matteron merit. It is admitted between the parties that theinvestment of Rs. 19,93,91,721/- has beenmade by the petitioner is Fixed CapitalInvestment towards moulds, dyes and jigs. These items have been given by the petitionerto its vendors to use for manufacture ofcomponents. The Tribunal by order dated 17.12.2013has remanded the matter back to DivisionalLevel Committee with the direction to make aninquiry as to whether the moulds, dyes andjigs which were given by the petitioner tovarious vendors for manufacture ofcomponents were exclusively been used formanufacture of components of the petitionerand after manufacture of such componentswere supplied back only to the petitioner. After remand order....
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....essmentorders and vendor supply invoices etc. werebrought on record and the same was dulyverified by the two independent authorities i.e.G.M.D.I.C. and Joint Commissioner(Executive), respondent Nos. 4 and 5, nodiscrepancy whatsoever, has been pointed outin their reports. The Hon'ble Supreme Court in the case ofVadilal Chemicals Ltd. vs. State of A.P. Andothers reported in (2005) 6 SCC 292 whileentertaining the writ petition has held inparagraph Nos. 12, 13, 18, 22 and 23 asunder:- "12. The appellant replied to the show cause notices inwhich the jurisdiction of the DCCT to issue the notices wasquestioned. It was clarified that the appellant was liable to dutyunder the Central Excise Tariff Act 1985 and that the appellanthad been paying 16% Excise Duty on both Anhydrous Ammoniaand Liquor Ammonia manufactured by it in accordance with theprocedure prescribed under that Act. The details of theprocesses undertaken in producing the products were alsogiven. It was also drawn to the attention of the DCCT that theauthority to determine the eligibility under the G.O. Ms. was notthe Commercial Taxes Department, but the Department ofIndustries & Commerce. 13. Subsequent....
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....s, can only speak withone voice. Having regard to the language of the 1993 G.O. itwas the view expressed by the Department of Industries whichmust be taken to be that voice." In view of the above judgment we lookinto the background of the present case whichis apparently clear that District LevelCommittee, respondent No. 3 afterconsidering the report submitted by G.M.D.I.C.and the Sales Tax department i.e. JointCommissioner (Executive) respondent Nos. 4and 5 have rightly came to the conclusion byincluding investment made by the petitionerin moulds, dyes and jigs in the fixed capitalinvestment. In other words, there is no infirmity in theorder of District Level Committee (RespondentNo. 3) in addition of Rs. 19,93,91,721/- in themonetary limit of exemption mentioned inEligibility Certificate dated 12.05.2013. The power of the Commissioner underSection 4-A (3) is not in dispute in the presentcase but, such a power has to be exercisedjudicially only. The judgment relied upon bythe parties are not of any help. The Tribunal while remanding the matterback to the Divisional Level Committee, hasrelied upon the judgment passed in Appeal No.38 of 2000 M/s Honda CL Cars India Limite....