Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2016 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 354 - HC - VAT and Sales TaxRecovery of benefit availed - cancellation of exemption certificate eligibility certificate benefit of exemption from payment of tax - valid from 20.3.1993 to 19.3.2002 - exemption certificate was issued on 28.10.1993. Benefit of ₹ 27,95,959/- was availed of by the appellant out of the total benefit admissible ₹ 72,11,700 upto June, 2000. The unit stopped production thereafter. The benefits, which were availed of by the appellant during the period of its eligibility have been withdrawn and the amount is sought to be recovered in exercise of powers conferred under the Rules Sections 28 (4) and 28(5) of the Act - Rules 28A(2)(j)(k), (6) to 11 of the Rules. Held that: - the exemption certificate issued shall be valid unless cancelled or withdrawn from the date of commercial production or from the date of issue of exemption certificate as the case may be to the 30th June next year or when notional sales tax liability first exceeds the permissible limit, whichever is earlier. Sub-rule (9) of Rule 28A of the Rules provides for cancellation of exemption/ entitlement certificate under certain specified conditions and one of them being discontinuance of its business by the unit for a period exceeding six months or closing down its business during the period of exemption/ deferment. The facts of the case are that the period of eligibility of the appellant was from 20.3.1993 to 19.3.2002. The unit had stopped production in July, 2000. Out of the total amount of Rs. 72,11,700/-, the benefit to the extent of Rs. 27,95,959/- was availed upto 30.6.2000. There was violation of Rule 28A(9)(i) of the Rules as the unit discontinued its business for a period exceeding six months during the period of exemption. Hence, the exemption certificate was liable to be 'cancelled' for violation of the conditions of Rule 28A(11)(a). Order of Assessment - time barred Held that: - a perusal of the order shows that in fact, it is not an assessment order, rather an order passed for demand of tax and interest on account of violation of conditions laid down in Rule 28A(11)(a)(i) of the Rules, which specifically provides that in case after availing the benefits, the unit does not remain in production for next five years, the entire amount of tax benefits availed of, shall be payable along with interest order of demand maintainable demand of benefit availed with interest justified
|