2003 (7) TMI 658 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the petitioner's manufacturing unit qualifies as a "newly set up industrial unit."
2. Whether the unit is an expanded portion of an existing industrial unit.
3. Whether the decision of the Revenue authority rejecting the eligibility certificate (E.C.) application can be sustained.

Issue-wise Detailed Analysis:

1. Whether the petitioner's manufacturing unit qualifies as a "newly set up industrial unit":

The petitioner-company, engaged in manufacturing edible rice bran oil, set up a new industrial unit in 1998 after demolishing its old unit in 1997. The company argued that this new unit, with expanded capacity, qualifies as a "newly set up industrial unit" under section 40(12) of the West Bengal Sales Tax Act, 1994. The petitioner contended that the unit started manufacturing goods on or after May 1, 1995, thus meeting the criteria for tax remission. The Assistant Commissioner, however, misinterpreted the provision by focusing on the words "first time in West Bengal" and erroneously linked the new unit with the old one, leading to the rejection of the eligibility certificate application.

2. Whether the unit is an expanded portion of an existing industrial unit:

The respondent argued that the West Bengal Industrial Development Corporation did not recognize the demolition of the old unit and issued a certificate for expanded capacity, not for a new industrial unit. The petitioner's unit was not revived after closure or sickness, making sections 42(2) and 43(3) of the Act inapplicable. The unit was not registered under section 41, and the demolition fact was not brought to the notice of the relevant authorities. The financial assistance for modernization indicated it was an expansion, not a new setup. The respondents concluded that the unit was neither newly set up nor an expanded portion of an existing unit.

3. Whether the decision of the Revenue authority rejecting the eligibility certificate (E.C.) application can be sustained:

The Revenue authority's decision was based on the interpretation that the petitioner's unit did not qualify as a newly set up industrial unit or an expanded portion of an existing unit. The petitioner's application in form 23 was inconsistent, and the registration certificate did not mention the unit as newly set up. The petitioner's unit, manufacturing the same goods as the old unit, did not meet the criteria of producing goods for the first time in West Bengal. The Tribunal found that the petitioner was uncertain about the nature of the unit and failed to provide clear evidence supporting its claim. Consequently, the application for the eligibility certificate was rightly rejected.

Conclusion:

The Tribunal upheld the Revenue authority's decision, concluding that the petitioner's unit did not qualify as a newly set up industrial unit or an expanded portion of an existing unit. The application for the eligibility certificate was dismissed, and the security furnished by way of bank guarantee was to be invoked to the extent of the petitioner's dues. The petitioner's request for a stay was also rejected. The judgment was delivered in open court and both sides were present.