9911796707
TMI Blog1988 (9) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax under the Package Scheme of Incentives, 1979. On notice being issued in the writ petition, the respondent, State of Maharashtra, has filed an affidavit in reply and the petitioner has filed a rejoinder. In order to exempt in public interest any specified class of sales or purchases from payment of the whole or any part of the tax payable under the Act, the State Government gave to itself powers of exemption under section 41 of the Act. In exercise of its powers under section 41 the Government had been issuing notifications so as to grant exemption in appropriate cases from payment of sales tax or purchase tax or both, as the case may be. One of such notifications issued by the Government under entry 136 was for granting full tax exemption for the purchases of the inputs and the sales of finished goods of new units set up in the backward areas of the State. The Government also issued notification under section 8(5) of the Central Sales Tax Act to exempt the sales of finished goods of such units from payment of Central sales tax. These tax exemption benefits were accorded to the new industries by way of (1) incentives for development of industries in backward areas, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Incentives Scheme to the extent of 100 per cent of the gross fixed capital investments of the eligible units as approved at the time of the grant of eligibility certificate or to such other lower ceiling of percentage that may have been provided for under the eligibility certificate issued to the small-scale unit. Since both the Houses of the State Legislature were not in session, the Governor passed Ordinance No. 5 of 1985 and, inter alia, introduced section 41A which read as under: "41A. (1) Notwithstanding anything contained in this Act or in any judgment, decree or order of any court or tribunal to the contrary, on and after the date of commencement of the Bombay Sales Tax (Amendment) Ordinance, 1985 (hereinafter in this section referred to as 'the commencement date') the cumulative quantum of benefit drawn or availed of by any registered dealer of an eligible unit in respect of payment of any tax by virtue of the exemption granted under the provisions of section 41 shall not exceed one hundred per cent of the gross fixed capital investment of the eligible unit as approved at the time of grant of eligibility certificate, or such other lower ceilings of percentage, if any, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tives shall cease to have any effect in relation to the exemption from payment of tax under this Act or under the Central Sales Tax Act, 1956, and the certificate of entitlement issued in favour of such registered dealer by the Commissioner under entry 136 of the Schedule to the notification issued under section 41 shall stand automatically cancelled on the commencement date and such registered dealer shall not be entitled to claim any further benefit of exemption from payment of such tax under the eligibility certificate or the certificate of entitlement on and after the commencement date, and he shall surrender the certificate of entitlement together with all the unused form BC which have been attested by the sales tax authorities to the Commissioner forthwith and in any case on or before the 31st day of August, 1985, unless he has already surrendered the same earlier." Section 8 of the Amendment Act which repealed Ordinance 5 of 1985 further provided as follows: "8. (2) It is hereby declared that notwithstanding anything contained in section 7 of the Bombay General Clauses Act, 1904, on such repeal, the following consequences shall ensue,- (a) the eligibility certificate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally made mention of the particular oil as the finished product produced and sold by the concerned eligible unit. The trade circular stated that the clarification was being given "after obtaining the opinion of the concerned department of the Government of India about what constitute edible oil and non-edible oils". Notwithstanding the amended sections and the trade circular, the petitioners who are engaged in producing washed cotton seed oil tried to contend before the authorities that washed cotton seed oil would also fall in the category of edible oil and that several technical authorities have given their opinion to that effect and as such the extension of sales tax exemption facility to units engaged in the production of non-edible oils was against law and was not only depriving the Government of its legitimate revenue but was also detrimentally affecting the interests of the old units which were engaged in producing washed cotton seed oil, etc. These contentions were not accepted by the State Government with the result that the withdrawal of the tax exemption provision remained confined only to the units engaged in producing edible oils and not to units engaged in producing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been provided in order to enable the State Government to grant exemption from payment of purchase tax and sales tax of any specified class of sales or purchases if such grant of exemption was felt justified. It is open to the Government to give the benefit of tax exemption either to the full extent or to a partial extent. The section itself states that the power of exemption is being conferred on the Government in order to enable it to act in public interest. It is not, therefore, as if power has been given to the Government to act in an arbitrary manner or for conferring largess on any section of manufacturers or traders. In exercise of its powers under section 41 the Government has been granting exemption by means of several notifications in favour of various trades and industries as and when the circumstances warranted the granting of exemption in public interest. It can, therefore, be safely taken that section 41 has withstood the test of time and has enabled the Government to promote public interest, by granting tax exemption benefit, whenever needed. One of the contentions advanced by the petitioner's counsel was that while the power of exemption can be granted on any spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales and purchases effected by new entrants would constitute a specified class by themselves in contradistinction with the class of sales and purchases effected by the older and seasoned units. In so far as the second contention is concerned, viz., that washed cotton seed oil would also fall in the category of edible oils in spite of the fact that it has to be processed still further for being made fit for human consumption, we find that the contention is not a tenable one. The petitioners had contended before the Government that washed cotton seed oil is also one type of edible oil but the Government have rejected this contention stating that since washed cotton seed oil cannot be made use of without further processing for direct human consumption, it would not fall in the category of edible oil. This position is not controverted by the petitioners and, therefore, as long as the washed cotton seed oil that is produced is sold without further processing it will not constitute edible oil. The Government therefore, are well within their powers in refusing to accept the petitioner's contention that washed cotton seed oil is also edible oil and, therefore, all the new units whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
