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2018 (10) TMI 1003 - HC - VAT and Sales TaxBenefit of tax remission - sales tax benefit to new industry, setting up its manufacturing unit in Kutch district - Notification dated 09.11.2001 - exemption scheme or the tax deferment scheme - switch over to the sales tax remission scheme - rejection of request for Change of option. Held that:- The said Scheme envisaged sales tax incentives. The eligible unit could either opt for tax exemption in which case, on the raw material and the inputs purchased by the unit, no tax would be payable and upon sale of the petitioner's product, no sales tax would be payable. The other option was tax deferment, in which, the eligible unit would be allowed to collect sales tax otherwise payable to the Government upon the sales of the intermidiatory or final products but would not be required to deposit such tax with the Government revenue immediately. The same would be deposited at a later point of time in installments. Third scenario under the scheme was in case of a unit having eligible investment in excess of ₹ 100 crores. Such a unit could opt for a composite scheme of sales tax exemption and deferment in parts. Clause 4.4 of the Scheme provided that the option would have to be exercised by unit at the time of making the application for the benefits. However, such option could be changed once before the certificate is issued by the Sales Tax Department. This clause thus clearly envisaged one time change of option before the certificate is issued by the Sales Tax department - In case of the petitioner, final eligibility certificate was not issued till the VAT Act was introduced making major changes in existing exemption schemes. The certificate issued by the department was a provisional eligibility certificate granting exemption upto a limit of 25% of the eligible investment of the petitioner. In terms of Clause 4.4 of the said Scheme, therefore, the choice of the petitioner to change the option was not yet lost. In absence of any clear provision providing that a unit enjoying tax exemption under the earlier scheme would automatically come within the fold of tax remission benefits under the Rules, there is no reason to presume that no option could be exercised. Further, if the legislature desired that there would be no further options of either of the two classes of units, language used would have been more explicit providing that the units availing tax deferment under the earlier law shall not be allowed to change the option - In a case where, as held by us earlier, when the choice for changing the option for the petitioner [in terms of clause 4.4 of the scheme] had not yet been closed since final eligibility certificate was not yet issued, the introduction of the Rules of 2006 would not eliminate such option. We may recall, the Rules of 2006 brought about fundamental shift in the benefits available to such eligible units. The respondents therefore committed an error in not allowing the petitioner's request for change of option. The respondent shall allow the petitioners to switch over to the sales tax remission scheme in terms of Chapter IV of the Rules of 2006 from the date of the application and issue eligibility certificate and entitlement certificate accordingly and further work out the benefits and pass necessary orders in terms thereof - petition disposed off.
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