TaxTMI 
TaxTMI 
2024 (11) TMI 282
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.... of Goods Act, 1979 (hereinafter refereed to as 'KTEG Act, 1979'). 2. The petitioner contends that it is a public limited Company incorporated under the Companies Act, 1956 and is a wholly-owned subsidiary of PTC India Limited (PTC), which is also a public limited Company, incorporated in the year 1999 under the Companies Act, 1956, on the initiative of the Government of India and was promoted by four Central Government Public Sector Undertakings, namely NTPC Limited, Power Grid Corporation of India Limited, Power Finance Corporation Limited and NHPC Limited. 3. The petitioner contends that as a subsidiary of PTC India Limited, which was incorporated under the objective of developing an asset base in the sphere of business of generation, supply, distribution, transmission and dealing in all forms of energy, including wind energy, coal, conversion of coal/fuel into electricity and providing advisory services in the energy sector and energy efficiency. 4. The petitioner contends that, in the year 2015, Siemens Gamesa Renewable Power Private Limited (hereinafter referred to as "Gamesa") sought to set up and administer a wind energy plant in the State of Karnataka and acco....
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....oods including those brought for the purpose of establishing captive power generation plant, into a local area, by an entrepreneur for use in setting up of a renewable energy project including a co-generation project, for a period of three years from the date of commencement of the project implementation. It also exempted entry tax on the entry of goods into a local area caused by an entrepreneur for use as inputs, component parts and consumables in the renewable energy project, for a period of five years from the date of commencement of commercial generation of electricity in such the project. 9. In order to avail the benefit of the exemption, an entrepreneur had to produce a certificate in original issued by the Department of Energy certifying that (i) it is a project registered as such (ii) the date of commencement of project implementation (iii) the date of commencement of commercial generation of electricity (iv) that it is eligible for exemption from payment of entry tax as per the Government order dated 19.01.2010, at the time of filing his first monthly or quarterly statement under the KTEG Rules. In each of the subsequent years for wh....
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....e liability to pay the entry tax. The petitioner also requested respondent No. 2 to implead Gamesa in the proceedings and in view of COVID-19, requested additional time to file a detailed response. The petitioner contends though additional time was granted to reply to the proposition notice but refused to implead Gamesa. After the COVID-19 restriction was lifted, the petitioner addressed a letter dated 18.06.2020 to respondent No. 2 stating that it was entitled to claim exemption from liability to pay entry tax in view of the notification dated 31.03.2000 and requested to withdraw the proposition notice. However, respondent No. 2, ignoring the claim of the petitioner, passed the impugned order dated 02.07.2020, denying the petitioner from the benefits of exemption and from the payment of entry tax and called upon it to pay Rs. 11,09,39,462/- towards the entry tax and interest thereon. The petitioner contends that, the basis for denying the benefits was that the notification dated 18.12.2010, applied to the petitioner and that the petitioner had not obtained the exemption certificate from the Department of Energy. The petitioner therefore, before this court challenging the aforesaid....
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....le to a given case, the assessee can claim the benefit of a more beneficial one. In this regard, he relied upon the judgment of Hon'ble Supreme Court in the case of Share Medical Care Vs. Union of India and Others [(2007) 4 SCC 573], where it relied on its earlier decision in CCE Vs. India Petro Chemicals [(1997) 11 SCC 318] and H.C.L Limited Vs. Collector of Customs [(2001) SCC 83], where it was held that when two exemption notifications are applicable, the assessee is entitled to the benefit of that exemption notification, which gives him greater or larger relief. The Hon'ble Apex Court held in Share Medical Care (Supra) that, even if an assessee does not claim benefit under a particular notification at the initial stage, he is not debarred, prohibited or estopped from claiming such benefit at a later stage. 16. Per contra, respondent No. 2 has filed a statement of objections contending that, according to Section 3 (2) of the KTEG Act, 1979, every dealer who takes delivery of the goods on its entry into the local area shall be deemed to have brought or caused to be brought the goods into the local area. Therefore, liability to pay the entry tax is on such dealer but no....
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....he exemption notification dated 31.03.2000, then it was bound to explain why Clause 2.1.3 of the supply contract with Gamesa shifted the burden of payment of entry tax on the contractor. Therefore, it was contended that the petitioner was fully aware of the fact that it was bound by the notification dated 18.12.2010. He also contended that the supply price of 25 WTGs is inclusive of the entry tax as per clause 2.1.3 of the supply contract, which makes it more evident that the notification dated 18.12.2010 was applicable. It was contended the Karnataka Renewable Energy Policy 2009-14 (hereinafter referred to as 'Energy Policy 2009-14') was announced vide a Government order dated 19.01.2010. The respondent No. 2, sought a clarification from Karnataka Renewable Energy Development Limited (hereinafter referred as 'KREDL'), whether the petitioner's Wind Mill Project at Babaleshwar was covered under the policy vide letter dated 02.07.2020. The KREDL had confirmed that the petitioner unit was covered vide letter dated 02.07.2020. The petitioner had acknowledged the applicability of the notification dated 18.12.2010. However, when it realized that it did not follow the procedure contemplat....
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...., Kalburagi, Belagavi and Chitradurga district. The Government of Karnataka by its order no.EN 32 NCE 2015, Bangalore dated 06-08-2015 had accorded permission to enhance wind power project capacity from 38.6MW to 200 MW at Babaleshwar and Mulvad Villages of Vijayapura Taluk and District, out of 205MW allotted to M/s GM Navarra Wind Energy Pvt Ltd for installation of 205MW capacity wind power project at Vijayapura kalaburagi Kalaburagi, Belagavi and Chitradurga district The Government of Karnataka by its order No. EN 257 NCE 2016 Bangalore dated 1-10-2016 had issued corrigendum to GO Number EN 32 NCE 2015 Bangalore dated 06-08-2015 Further the Government of Karnataka by its order No. EN 318 NCE 2016 Bangalore dated 28-11-2016 had issued corrigendum to G.O No. EN 32 NCE 2015 Bangalore dated 6-08-2015 and withdrawn GO No. EN 257 NCE 2016, Bangalore dated 1-10-2016. The Government of Karnataka by its Order No. EN 341 NCE 2016 Bangalore dated 16-12-2016 had accorded permission to transfer 26MW and 24MW totaling 50MW capacity out of 200MW wind power project located at Kakhandaki villages of Vijayapura Taluk and district from M/s G.M Navarra wind energy Pvt Ltd ....
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....mini hydel project iii) 50% of VAT paid on plant and machinery procured for renewable energy projects will be reimbursed. Exemption from Entry Tax to Large, Mega, Ultra Mega and Super Mega Enterprises In other than HK Zone 1, 2 & 3 and HK Zone 1 & 2 these units are eligible for 100% exemption from payment of Entry Tax on 'Plant & Machinery and Capital Goods' for an initial period of three years for large and mega and five years for ultra mega and super mega enterprises from the date of commencement of project implementation. For this purpose, the term Plant & Machinery and Capital Goods also includes Plant & Machinery and Equipments procured for captive generation of electricity. On raw materials, inputs, component parts & consumables (excluding petroleum products) [wherever applicable] for a period of five years from the date of commencement of commercial production. In respect of Mega, Ultra Mega and Super Mega Enterprises, additional One, Two and Three years will be allowed respectively for operational period." 23. Therefore under the Energy Policy of the State during the years 2009-14 and 2014-19, the exemption from payment of entry tax was allowed on pl....
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....979 had issued a notification bearing No. FD 37 CET 2000 (1) Bangalore dated 31.03.2000, which reads as follows: "NOTIFICATION No. FD 37 CET 2000(1), Bangalore, dated 31-3-2000 In exercise of the powers conferred by sub-section (1) of Section 11-A of the Karnataka Tax on Entry of Goods Act, 1979 (Karnataka Act 27 of 1979), the Government of Karnataka being of the opinion that it is necessary in the public interest, so to do, hereby exempts with effect from First day of April, 2000, the tax payable by any dealer on all kinds of wind mills and parts and accessories thereof brought into any local area for consumption, use ors therein." 28. The State formulated an exhaustive Energy policy for the term 2009-14 and granted several concessions and incentives to encourage to encourage "entrepreneurs" to set up renewable energy projects in the State of Karnataka. In order to pass on the incentives and grant concession to the sector relating to generation of electricity through renewable sources, the State Government issued a notification under Section 11A (1) (i) of the Act, 1979 bearing No. FD 10 CET 2010, Bangalore dated 18-12-2010 which reads as follows: "NOTIF....
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....ing of this Contract, the same would be to Employer's account. 2.1.4 The Employer agrees to submit requisite sales tax declaration form(s) such as "Form C" wherever applicable as per the Central Sales Tax Act, 1956, depending upon the submission of original tax invoice by the Contractor, falling which, the Employer shall compensate the Contractor for the differential tax, interest, any fax reversal and any other liability as per law. The Contractor shall facilitate the same by providing the requisite information to the Employer in a timely manner and in accordance with Applicable Laws." 30. The Appendix-2 to the Supply Contract which contained the standard terms and conditions defined taxes as; "Taxes" means any fees, taxes, levies, interest, penalties or other sum levied pursuant to any Applicable Law, including but not limited to all sales, value added, excise and storage taxes, service taxes, license and permit fees, entry tax, works contract tax, levies, octroi, cess, import duties, imposts, deductions, charges, withholdings and duties". 31. Clause 8 of the standard terms and conditions of supply contract dealt with the change in law and the same is ....
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.... payment totalling to INR 215,00,00,000/- (INR Two Hundred Fifteen Crores Only) against Delivery at site of complete WIG Components and upon submission of the following documents: a. Tax Invoice; b. Copy of Delivery Challan issued by Contractor; c. Copy of Delivery Certificate issued by Employer or copy of Deemed Delivery Certificate issued by the Contractor. d. Inspection Report and Test Certificates of WIG Components." 34. By the time, the supply contract was entered into between the petitioner and Gamesa, the State Government had issued a notification dated 18.12.2010 under Section 11A of the KTEG Act, 1979 exempting "entrepreneurs" from the tax payable under the said Act on the entry of plant and machineries and capital goods including those brought for the purpose of establishing captive power generation plant, into a local area for use, in setting up a Renewable Energy Project including a co-generation project in terms of Government order No. EN354NCE 2008 dated 19.01.2010, for a period of three years from the date of commencement of the project implementation and entry of goods into a local area for use as inputs, components and consuma....
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....the taxes, including entry tax if any, were the liability of Ms. Gamesa only". Further, it was claimed that respondent No. 1, in terms of a notification dated 31.03.2000, had exempted the petitioner from levy of entry tax and goods that were in the nature and description of Wind Mills and Parts and accessories thereof, that were brought into the local area for consumption, use or sale therein. Thus, the petitioner claimed that no entry tax is leviable on the capital goods brought into the State of Karnataka. It therefore, contended that the notification dated 31.03.2000 was specific and related to Wind Mill / Wind Turbine Generators and Components, while the notification dated 18.12.2010 referred to Plant and Machineries and Capital Goods for use in setting up a Renewable Energy Project. It therefore, contended that since the notification dated 31.03.2000 was not rescinded, the WTGs, parts and accessories thereof, were to be excluded from the levy of entry tax. 38. The respondent No. 2, after considering the reply of the petitioner, held that the notification dated 18.12.2010 was comprehensive in nature and covered entry of all Plant and Machineries and Capital Goods for use in ....
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....ds" means all kinds of moveable property (other than newspapers, actionable claims, stocks and shares and securities) and includes livestock". 43. The word "Local Area" as defined in Sub-Section 5 of Section 2 the KTEG Act, 1979 reads as follows: "Local area" means an area within the limits of a city under the Karnataka Municipal Corporations Act, 1976 (Karnataka Act 14 of 1977), a Municipality under the Karnataka Municipalities Act, 1964 (Karnataka Act 22 of 1964), a Notified Area Committee, A Town Board, a Sanitary Board or a Cantonment Board constituted or continued under any law for the time being in force and a Mandal under the Karnataka Zilla Parishads, Taluk Panchayat Samithis, Mandal Panchayats and Nyaya Panchayats Act, (Karnataka 1983 Act 20 20 of 1985) Land panchayath area under the Karnataka Panchayath Raj Act, 1993 (Karnataka Act 14 of 1993). 44. Sub Section (5-a) of Sub Section 2 of the KTEG Act, 1979 defines an "Occasional Dealer" reads as follows: "Occasional dealer" means any person who, in the course of occasional transactions of business nature, whether on his own account or on account of a principal or any other person bring or causes to b....