2023 (3) TMI 572 - HC - CST, VAT & Sales Tax

Exemption from payment of sales tax on the sales turnover of finished products namely molasses, bagasse and filter mud - G.O. No. CI 30 SPC 96 dated 15-03-1996 read with notification No. FD 32 CSL 96 (I) dated 15-11-1996 - Revenue’s specific case is, the exemption notification specifically mentions the word ‘manufacture’, hence, the by-products cannot be considered as products manufactured.

Whether the petitioner is entitled for exemption from payment of tax on molasses, bagasse and filter mud under 1996-2001 Industrial Policy?

HELD THAT:- It is not disputed that the activities of both petitioner and Chamundeshwari are identical. There is no pleading on behalf of the State Government that the benefit is denied to the petitioner based on the interpretation of the words ‘manufacture’ and ‘production’. It is only at the time of final hearing of this writ petition the learned Additional Advocate General sought to justify the action of the State Government by placing reliance of Arihant Tiles. The indubitable fact remains that, according to both petitioner and the State Government, the activities of petitioner and Chamundeshwari are one and the same. The State Government’s action amounts to conscious discrimination between two similarly situated industrial units.

It is relevant to note that Chamundeshwari Industry was granted sales tax exemption on sale of by-products of sugar under Industrial Policy 1993-98 and it also enjoyed the benefit of deferral of purchase tax as interest free loan from 2000 to 2010.

The petitioner being similarly situated as that of Chamundeshwari shall be entitled for exemption from payment of sales tax on by-products namely molasses, bagasse and filter mud - petition allowed.