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2017 (10) TMI 1219 - HC - VAT and Sales TaxRescinding of sales tax exemption - The Government of Gujarat had provided certain exemptions from payment of sales tax in case of certified manufacturers registered under the Khadi Board. On the purchases also, the petitioner was subject to certain condition not liable to pay tax. These exemptions were granted under the Gujarat Sales Tax Act. With the replacement of the State Sales Tax Act by the VAT Act w.e.f. 01.04.2006, such exemptions stood withdrawn. Held that: - section 41 of the Act pertains to remission of tax penalty or interest. It was in exercise of powers under sub-section (1) of section 41 that the Government had issued a notification dated 27.02.2009 granting remission of whole of the tax payable on the specified products by a certified manufacturer on the sale of such goods. This was subject to limits imposed in terms of condition No.1 to the notification. Condition No.3 provided that the said certified manufacturer would issue tax invoice or retail invoice in accordance with the provisions of the VAT Act. In essence, the Government desired to waive tax component on sale of such specified goods by the certified manufacturer dealers. In whatever manner the accounting treatment may be given to such tax component, the loss to the ex-chequer would be limited to 4+1% of the tax which, under the said notification, Government had decided to forgo. If the contention of the Assessing Officer is that the assessee having shown to have collected the tax from the purchaser and not deposited with the Government refund by granting refund of such amount, the Government revenue would suffer double loss, such contention is plainly erroneous. The decision of the Assessing Authority to deny the tax remission to the petitioner is set aside. The Assessing authority shall pass fresh order granting such benefit to the assessee with further statutory benefits if any available - petition allowed by way of remand.
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