TMI Blog2004 (5) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... and 41E framed under the Bombay Sales Tax Act, 1959 (for short "the Act"). The set-off claimed by the assessees was in terms of rules 41D and 41E read with rule 44D framed under section 42 of the Act which enables a drawback, set-off or refund of the whole or any part of the tax in such circumstances and subject to such conditions as may be specified in respect of tax paid or levied or leviable in respect of any earlier sale or purchase of goods under the Act or any earlier law to be granted to the purchasing dealer. Rule 41D enables drawback, set-off or refund of tax paid by the manufacturers in respect of certain purchases made by claimant- dealer. It lays down that in assessing the tax payable in respect of any period by a registered dealer who manufactures taxable goods for sale or export, the Commissioner shall, in respect of purchases made by such dealer on or after the notified day of any goods specified in Part II of Schedule C and used by him within the State in the manufacture of taxable goods for sale or in the packing of goods manufactured, grant him a drawback, set-off or, as the case may be, a refund of the aggregate of the sums determined in accordance with rule 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with the provisions of rule 44D." 3.. Section 27 of the said Amendment Act of 1989 further amended the rule 41E as follows: "27. Amendment of rule 41E of the Bombay Sales Tax Rules, 1959.-In the existing rule 41E of the Bombay Sales Tax Rules, 1959, during the period commencing from 1st April, 1984, and ending on 31st March, 1988, after the words 'manufacture of goods' the brackets and words '(not being waste goods or scrap goods or by-products)' shall be deemed to have been inserted." 4.. Section 30 of the Act (9 of 1989) also enacted a validating provision. The effect of the amendment is that facility of drawback, set-off, etc., of tax paid by a manufacturer of goods specified in Schedule B is not applicable to manufacture of goods out of waste, scrap goods or by-products for the period between July 1, 1981 and March 31, 1988 by virtue of sections 26 and 27 of the said Amendment Act of 1989. 5.. By the Bombay Sales Tax (Amendment) Rules, 1992 rule 41E was amended as follows: "(a) for the words, brackets, figures and letter 'from one Group to another of the Groups specified in clause (xviii-a) of rule 3', the words, figure and letter 'specified in entry 6 of Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to which it pertains to the manufactured goods specified in entry 6 of Schedule B and where such purchase prices are not ascertainable, the apportionment shall be on the basis of the sale prices of such manufactured goods and shall be allowed only to the extent that it pertains to the manufactured goods specified in the entry 6 of Schedule B. Explanation .-For the purpose of this rule, the expression 'export' means a sale in the course of inter-State trade or commerce or in the course of export of the goods out of the territory of India, where such sale occasions movement of the goods from the State." 7.. These amendments had the effect of removing exclusionary clause of goods manufactured out of waste or scrap goods or products thereby restoring the position as it stood prior to 1981. Some amendments have been effected to this Rule on November 19, 2001 but the same have no bearing on the present case. 8.. The validity of the amendment made to rules 41D and 41E of the Bombay Sales Tax Rules, 1959 retrospectively by section 26 of the Amendment Act 9 of 1989 was challenged before the High Court. The High Court upheld the validity of the same and the writ petitions were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to entry 6 of Schedule B in 1984 and in the assessment order passed for 1982-83, set-off under rule 41E was allowed by the quantum restricted to tax collected on sale of iron and steel scrap. Computation of this amount was disputed in the writ petition filed before the High Court. The Tribunal in the meanwhile rendered a decision and held that rule 41E did not provide for apportionment of set-off where the manufactured goods were partially covered under Schedule "B" and partially under any other Schedule and in such a case the manufacturer would be entitled to claim set-off of tax paid on entire purchases falling under Schedule B. Thereafter the Maharashtra Act 9 of 1989 was enacted and by clauses 26 and 27, the benefit of rule 41E set-off was denied altogether where the manufactured goods falling under Schedule B are in the nature of waste goods/scrap goods/by-products for the period July 1, 1981 to March 31, 1988. 12.. The constitutional validity of the amendment was challenged before the High Court on the basis that the withdrawal with retrospective effect of any relief granted by a valid statutory provision to an assessee stands on a footing entirely different from tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same form has been reintroduced deleting the amendment made by repealing of the provisions which have been introduced, it is submitted that there is no material forthcoming to show as to why a special treatment has to be given only for that period of eight years to which we have adverted to. 14.. The learned counsel for the State of Maharashtra, except to make available the amendments of the enactment and Rules, was not able to meet the arguments advanced on behalf of the appellant. We specifically and repeatedly asked him as to why the denial of benefit of rule 41E as amended was confined only to the period between July 1, 1981 and March 31, 1988 but he had no answer at all. 15.. It is no doubt true that the Legislature has the powers to make laws retrospectively including tax laws. Levies can be imposed or withdrawn but if a particular levy is sought to be imposed only for a particular period and not prior or subsequently it is open to debate whether the statute passes the test of reasonableness at all. In the present case, the High Court sustained the enactment by adverting to Rai Ramkrishna's case (1964) 1 SCC 897 when the benefit of the rule had been withdrawn fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by striking down the words "not being waste goods or scrap goods or by-products" occurring in the said section 26 of the Maharashtra Act 9 of 1989 and the authorities concerned shall rework assessments as if that law had not been passed and give appropriate benefits according to law to the parties concerned. 16.. Another contention has been advanced with regard to the requirement under rule 41D that the assessee concerned has to register in the place to which the goods are "exported" under the Central Sales Tax Act and such requirement is impossible of performance because the Central Sales Tax Act was not extended to Silvassa, Dadra and Nagar Haveli, where the assessee's branch office is located. Inasmuch as what is claimed by the appellant is one in the nature of benefit under taxation law, all conditions thereto must be complied with. One of the conditions imposed therein is that he should have registered under the Central Sales Tax Act at the appropriate place to claim the benefit claimed thereunder. It is not necessary for the appellant to carry his business in a place where the Central Sales Tax Act is not extended. It is open to the appellant to carry on his business elsew ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
