TaxTMI 
TaxTMI 
2023 (10) TMI 953
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....under Section 42(1) of the H.P. General Sales Tax, 1968 (in short "GST Act"), granting incentives of exemption from State Sales Tax to existing and new Information Technology Industrial Units, subject to conditions specified therein. 3) They had also issued another Notification on the same day under Central Sales Tax Act, 1956 (in short "CENTRAL SALES TAX Act"), granting incentive exemption from Central Sales Tax under that Act, subject to conditions similar to those applicable in the cases of exemption from State Sales Tax. 4) Four years later, on 29.07.2006, the said Government issued another Notification, amending the Notification dt. 05.08.2002, adding special conditions apart from provisions extending period for exemption of Central Sales Tax. 5) Pursuant to the extension of the Central Sales Tax exemption vide Notification dt. 29.07.2006, the petitioners' industrial units came into production of UPS, Inverters, Stabilizers etc on 31.3.2010. 6) On 20.03.2014, the Assistant Excise and Taxation Commissioner-cum- Assessing Authority, District Solan, passed an order of "Scrutiny of Returns" under Section 60 of the HP VAT Act, 2005, for the period from April, 2013 to Ja....
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.... exemption of CENTRAL SALES TAX for full notified period of 6 years and 8 months in the case of the Petitioner but grant of such exemption for the said full notified period to the existing Information Technology units (which obviously cannot be rebutted cogently) under the same notification amounts to be arbitrary and discriminatory and thereby offending equality clauses of Article 14 of the Constitution?" 12) Before we consider these substantial questions of law, we deem it appropriate to take note of the Notification dt. 05.08.2002, which was initially issued by the Excise and Taxation Department of the Government of Himachal Pradesh under Section 42(1) of the HP GST Act, 1968 to the extent relevant. 13) The said Notification issued under Section 8(5) of the Central Sales Tax Act, 1956, is as under:- "2. Now, therefore, in exercise of powers conferred by clause (b) of subsection( 5) of section 8 of Central Sales Tax Act, 1956 (Act No.74 of 1956) the Government of Himachal Pradesh is pleased to direct that no tax under this Act shall be payable on the sale of goods manufactured by the existing and new Information Technology Industrial units situated in H.P., in the ....
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....2006. 3 years (iii) Unexpired period of incentive as on 1st August, 2006." 3 years 8 months (emphasis supplied) 15) Admittedly, the petitioners' industrial units had come into production on 31.03.2010, which fact is not disputed by the respondents. Contentions of the parties 16) The petitioners contend that they are entitled to the benefit of exemption from Central Sales tax under the Notification dt. 29.07.2006 for a period of 6 years and 8 months, i.e. upto 30.11.2017, but the stand of the respondents is that the benefit of exemption from Central Sales Tax was granted under the Notification dt. 29.07.2006 only upto 31.03.2013 in view of the language employed in Para- 3, as amended. 17) Petitioners contend it would be hard to believe that a unit which would come into existence after the issuance of the Notification dt. 29.07.2006, could be denied the exemption because it would take more than two years for the unit to establish itself, in which event, no unit would practically avail the benefit for 6 years and 8 months, as mentioned in Para-4 of the Notification dt. 29.07.2006, by 31.3.2013, and the very purpose of the incentive notification would be d....
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.... the Cabinet Memorandum that the Information Technology Department had sought approval for extending the incentive of exemption from the payment of CENTRAL SALES TAX for the existing and new IT industrial units only up to 31-03-2013. This is also apparent from para 3 of the minutes of the meeting that the incentive was made available approximately for a period of 5 years which however, was extended for a period of 6 years and 8 months through the proposal submitted to the Cabinet. At no stage the IT Department had sought approval for extending this benefit to those new Information Technology industrial units which were to come into production upto 31-03-2013 or till the period upto 30-11.2019 i.e. for 6 years and 8 months, as has been claimed by the appellants. There is no ambiguity in the approval sought by the Information Technology Department and it is absolutely clear from the perusal of its proposal that the incentive was to remain operative till 31-03-2013 only, even if a new Information Technology industrial unit commenced commercial production on 31-03-2013. Accordingly, the appellants who had commenced commercial production w.e.f. 31-03-2010 are entitled to the incentive o....
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....t, 2006." 3 years 8 months 24) The amended notification also defined the expression "new Information Technology Industrial Unit" as a unit which came into commercial production on or after 01.08.2005. 25) After reading Paras-3 & 4, we are of the opinion that Para-3 is applicable for deciding which new Information Technology Industrial Units would be entitled to the benefit of exemption and it mandates that only those units which commenced commercial production on or after 01.08.2006 upto 31.03.2013 would be entitled for the incentives mentioned in the Notification dt. 05.08.2002. 26) Since the petitioners' units commenced commercial production on 31.03.2010 (between the dates 01.08.2006 upto 31.03.2013), they would be entitled to the incentives contained in the Notification dt. 05.08.2002. 27) We are also of the opinion that para-4 over-rides para-3 in view of the nonobstante clause contained therein; and para 4 indicates the period for which incentives would be enjoyed by both existing and new Information Technology Industrial Units, as mentioned therein, i.e. that such period will not exceed 6 years and 8 months. 28) Para-3, in our opinion, does not deal at all ....