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2016 (6) TMI 903 - HC - VAT and Sales TaxRefund of tax deposited - Continuation of exemption after migration from KST Act to KVAT Act, 2003 w.e.f. 1.4.2005 - a tax holiday of ten years was to be granted to information technology units from the date of commencement of commercial production. - refund was denied on the ground that if the unit collects any amount by way of tax, it shall become ineligible for exemption. Held that:- The notification providing for such ineligibility was under the KST Act, which was followed in the case of CST Act up to March 31, 2005. When the subsequent notification dated April 18, 2005 (effective from April 1, 2005) issued under the KVAT Act itself provides for collection of tax, and such benefit of exemption is granted for Karnataka value added tax even when the assessee collects tax, then the same cannot be denied to the same assessee under the CST Act, as admittedly, the procedure provided under the general sales tax law of the State (which presently would be KVAT Act), would be applicable for the purpose of Central sales tax, but the substantive provisions of the CST Act were to be followed. The finding given by the Tribunal with regard to ineligibility of the assessee/petitioner for being granted exemption only because it had collected tax, cannot bejustified in law. As we have already noted above, the procedure under the KVAT Act was to be followed for Central sales tax also and thus, the refund given to the petitioner/assessee was fully justified and ought not to have been reversed. The law is thus clear that once an assessee is found entitled to grant of exemption, the procedure for the same is to be construed liberally in favour of, and for the benefit of the assessee. In the present case, the petitioner is admittedly eligible for grant of exemption. As such, the petitioner cannot be denied the benefit on technical grounds. - Refund allowed - Decided in favor of assessee.
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