TMI Blog2010 (2) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, 2810 and 2938 of 2004, 4298 and 4299 of 2009 and 2056 of 2010. - - - Dated:- 26-2-2010 - KAPADIA S.H. AND AFTAB ALAM JJ. Sunil Gupta, Senior Advocate and S.K. Dwivedi, AAG, (Aarohi Bhalla, Ms. Vandana Mishra, Manoj Kumar Dwivedi, Kamlendra Mishra and Gunnam Vekateswara Rao, Advocates, with them) for the appellants. Dhruv Aggarwal, Senior Advocate, (Ms. Nandini Gore, Debmalya Banerjee, Ms. Sonia Nigam, Kartik Bhatnagar, R.N. Karanjawala, Ms. Manik Karanjawala, Praveen Kumar, Ms. Rani Chhabra, Siddhartha Chowdhury, Mukesh Verma, Aftab Alam, Yash Pal Dhingra, Kavin Gulati, Ms. Rashmi Singh, Ms. Ruby Singh Ahuja, Manu Nair (for M/s. Suresh A. Shroff Co.), Ashok Kumar Sinha, Sudhanshu Goil, Ms. B. Vijayalakshmi Menon, K.R. Sasiprabhu, Arvind Kumar Sharma, Naresh Kumar, B.K. Satija, Pravir Kumar Jain, E.C. Agrawala, Ms. Suruchi Aggarwal, Pramod Dayal, Nikunj Dayal, Rupesh Kumar, Rajesh Kumar, Krishna Kumar, R.S., K.S. Mahadewan, Sanjeev Malhotra, Prakash Kumar Singh, Jatin Zaveri and Ms. Shally Bhasin Maheswari, Advocates, with him) for the respondent. -------------------------------------------------- The judgment of the court was delivered by S.H. KAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessional rate since such HSD was not directly used in the manufacture of notified goods (chemicals); rather, it was used for generating electricity in the generating set which electricity was then captively used for manufacturing chemicals. On the basis of the said decision dated June 12, 2000, the Additional Commissioner, Trade Tax, Meerut, Uttar Pradesh, issued a circular on June 20, 2000, to all the subordinate officers for its implementation and, accordingly, all trade tax authorities of the State, who, at the relevant time, were under the administrative control of the Commissioner, issued notices for deletion of HSD, an item mentioned in the company's recognition certificate. It is this show-cause notice which came to be challenged by Vam Organic Chemicals Limited and others by filing writ petitions in the Allahabad High Court. In the writ petition filed by the company, it was submitted that HSD was a fuel, which was absolutely essential for operating the diesel generating set (D.G. set) in the factory as the company's factory was engaged in a continuous process chemical industry and, in the absence of HSD, the D.G. set would become non-functional and if electricity cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 4B(2) of the 1948 Act. Against the said judgments, the State has come to this court by abovementioned civil appeals. We may clarify that, in all, there are approximately 138 appeals against the impugned judgments of the Allahabad High Court in various writ petitions. Suffice it to state that a common issue arises for determination in this batch of cases, namely, whether the Department was right in issuing show cause notices calling upon the companies to show-cause as to why HSD should not be deleted as an item from their respective recognition certificates issued under section 4B(2) of the 1948 Act. Mr. Sunil Gupta, learned senior counsel appearing for the Department, invited our attention to annexure CA(I) of the paper book, which is a list of items registered under section 4B of the 1948 Act. It appears to be a list annexed to the registration certificate. What is argued by the learned senior counsel is that, under section 4B(2) of the 1948 Act read with the Explanation thereto, a dealer has to satisfy the assessing authority, empowered to issue recognition certificate, that he requires the duly itemised goods mentioned in the recognition certificate for use in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to in sub-section (1) for use in the manufacture by him, in the State of any notified goods, or in the packing of such notified goods manufactured or processed by him, and such notified goods are intended to be sold by him in the State or in the course of inter-State trade or commerce or in the course of export out of India, he may apply to the assessing authority in such form and manner and within such period as may be prescribed, for the grant of a recognition certificate in respect thereof, and if the applicant satisfies such requirements including requirement of depositing late fee and conditions as may be prescribed, the assessing authority shall grant to him in respect of such goods a recognition certificate in such form and subject to such conditions, as may be prescribed. Explanation . For the purposes of this sub-section, (a) 'goods required for use in the manufacture' shall mean raw materials, processing materials, machinery, plant, equipment, consumable stores, spare parts, accessories, components, sub-assemblies, fuels or lubricants; and (b) 'notified goods' means such goods as may, from time to time, be notified by the State Government in that behalf. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required by the dealer for use in the manufacture of any notified goods. In the present case, the assessee(s) is manufacturing chemical goods. On issuance of the recognition certificate, a concessional rate of tax becomes applicable in respect of items enumerated in such certificate. It is a conditional exemption which is given to the dealer (assessee). It is important to bear in mind that a recognition certificate is issued under section 4B of the 1948 Act in respect of notified goods (see sub-section (2A) of section 4B). Power to grant exemption from payment of duty or to pay concessional duty is expressly conferred on the assessing authority. It is a case of conditional exemption. While exercising that power, generally no hearing or reasons are required to be given unless the Act so provides. In this case, a proviso is inserted in section 4B(4)(ii) of the 1948 Act to say that no recognition certificate shall be cancelled or amended by the assessing authority without giving reasonable opportunity of being heard to the dealer. It is for this reason that, in the present case, the assessing authority has given show-cause notices to all the respondent-dealers calling upon them to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the high- est, from the date of the show-cause notice when the assessing authority proposes to delete an item from the recognition certificate. In our view, such a show-cause notice has been given in each of the cases before us. Accordingly, we construe such show-cause notice to be for amending the recognition certificate in the facts and circumstances of this case, particularly because, in some of the cases, we find that recognition certificates have been issued as far back as in 1980. For the reasons given hereinabove, we remit all these cases to the assessing authority with a direction to treat the show-cause notice(s) issued for the purposes of amending the existing recognition certificate(s). Each assessee will be given a hearing. Each case for amendment of recognition certificate will be decided in accordance with the procedure laid down in section 4B(4)(ii) of the 1948 Act. The assessing authority will decide each case on its own merits uninfluenced by the decision of the High- Power Committee dated June 12, 2000. It will also decide each of such cases uninfluenced by circulars issued by the Additional Commissioner dated June 20, 2000, and others. The assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
