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2018 (11) TMI 342 - HC - VAT and Sales TaxExemption from tax under package Scheme of Incentives - eligibility - prorata turnover or entire turnover of Ratnagiri unit - exemption from whole of tax under Serial No.1 of N/N. VAT/1505/Cr 122/Taxation dated 1.4.2005 issued under Section 8(4) of Mah.VAT, 2003 - Chapter 14 of MVAT Act, 2002 as retrospectively amended/substituted by Mah.Act 22 of 2009 - applicability of Section 93 of MVAT Act, 2002 as amended by Act 22 of 2009 - monetary ceiling limits of exemption before 28.08.2009 being the date of coming into force Maharashtra Act 22 of 2009 Held that:- the appellant availed a fresh eligibility and entitlement certificate on 21st October 2002/10th February 2003 and in the said certificate, the SICOM has not incorporated any condition to the effect that the availment of benefit would be proportionate to the increase in production capacity additional investment. The certificates have been issued after issuance of circular dated 17th January 1998 There is force in the submission of the learned counsel when he submits that Section 93 would come into effect only from 27th August 2009 and the units which have not already exhausted the monetary ceiling limits by the said date would continue to be governed by the amended Section 93 irrespective of the date of the eligibility or entitlement certificate. i.e. before 1st April 2005 or after 1st April 2005 or whether before 27th August 2009 or after 27th August 2009. The appellant who has already exhausted the ceiling limit on 27th August 2009 thus cannot be governed by Section 93(1) since its cumulative quantum benefits are already availed. If the assessment order is perused, it can be seen that the appellant has paid full tax on sales from 1st April 2009 i.e. after exhausting the Cumulative Quantum of Benefits in terms of the eligibility certificate in March 2009. The life of the certificate was till May 2011 but since the ceiling limit was exhausted by March 2009 from April 2009, the appellant unit becomes liable for payment of sales tax. The returns were filed by the appellant for the years 2005-06 and he was also granted refund of ₹ 5,65,39,588/ on 4th February 2006 and 1st March 2006. However, subsequently, the assessment order had been passed on 22nd March 2013 which raised a demand of tax of ₹ 1,42,36,378/ by partially recalling the refund already granted. This also includes the interest of ₹ 1,49,48,197/levied under Section 30(3) of the MVAT Act, 2002. The dealer though had claimed 100% exemption without applying prorata and he has not produced any books of accounts nor has he enlisted the goods manufactured by his old and new units and there is no identification as a dealer is liable for prorata application. In this backdrop, the appellate authority confirmed the order passed by the Assessing Authority and held that the appellant is liable to pay an amount of ₹ 2,91,84,575/. This order was upheld by the Tribunal on more or less same grounds and the Tribunal concluded that there is no conflilct between Section 8(4) of the Bombay Sales Act and Section 93 of the MVAT Act, 2002 and they are independent provisions, mutually exclusive for units holding entitlement certificate and both operate in separate sphere. The Tribunal held that the argument of the appellant that he is entitled for full exemption is not accepted since Section 93 came to be amended with retrospective effect from 2009 and this amendment has been upheld by the Hon'ble High Court as well as the Apex Court and thus, the appellant is entitled to enjoy the benefits on prorata basis. The amendment inserted by Act No.XXII of 2009 would only govern those units where the Cumulative Quantum of Benefits has not yet lapsed without full utilization and is in the process of being availed. The eligibility availed under Section 93(1) is computed for a particular year and if there is excess availment, then, the benefits can be withdrawn. The orders passed by the Assessing Authority, the Appellate Authority and the Tribunal cannot be sustained and they suffer from a gross illegality. The appellant could not have been made to pay the tax for the sales affected from 1st April 2005 to 27th August 2009 and the assessment order is liable to be quashed and set aside. The assessment order quashed - decided against Revenue.
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