TMI Blog2007 (9) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal petition before the Tamil Nadu Taxation Special Tribunal challenging the order of the Assistant Commissioner of Commercial Taxes, Zone-IV, Madras made in his proceedings No. Rc. 1377/A2, dated nil May, 2002, whereby the Assistant Commissioner cancelled the agreement entered by him on June 28, 1996 with the petitioner for breach of certain covenants contained in the agreement. The correctness of the said order was canvassed before the Taxation Special Tribunal, which rejected the contention and confirmed the order of the Assistant Commissioner by its order dated October 28, 2002. The facts are as follows: The writ petitioner is the proprietor of the company Bhoomi Bottling, which carried on the business of purchasing bulk liquified petroleum gas and stored the gas in its storage point; from there it refilled the LPG gas in the cylinders and sold the same to the consumers through dealers appointed by it. The petitioner applied for and obtained an eligibility certificate from the District Industries Centre for sales tax deferral not exceeding Rs. 75,53,400 as interest-free sales tax for nine years from the month in which the petitioner's unit commenced commercial produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanation offered is not in accordance with the statutory provision and not in accordance with the agreement. According to Mr. Ramani, learned counsel appearing for the petitioner, the petitioner never stopped production for a continuous period of six months but was carrying on the business operation, of course, with a minor deviation in the transaction, in the sense, originally the petitioner has purchased bulk LPG gas from Reliance and it was stored and after refilling it in the cylinders sold the same to the general public through distributors. However, from 2002 onwards, it was doing the same activity of refilling the gas in cylinders as a job work to HPCL and hence, the activity of the petitioner cannot be regarded as a violation of condition No. 9 or 11. On that ground, the order of the Assistant Commissioner is not in accordance with the agreement and the order of the Tribunal confirming the order is also not sustainable. Hence, the order has to be set aside. On the other hand, learned Government Advocate appearing for the respondents submitted that once the petitioner entered into an agreement with the respondent authorities that would tantamount to a conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion/diversification are also eligible for full waiver of sales tax dues for a period of five years subject to a ceiling of the total investment made in fixed assets under expansion/diversification. 4.. With view to encourage more industries in Tamil Nadu, the Government direct that the following concessions also be made available to the industries: (a) For the industries to be started in the 75 backward taluks, i.e., other than the 30 most backward taluks, from among the 105 backward taluks, and in the industrial estates developed by any of the Government agencies including Madras Export Processing Zone, Madras Metropolitan Development Authority, the scheme of interest-free sales tax loan/deferral ordered in the Government order first, third and fourth read above is modified as follows: (i) For the existing units undertaking expansion or diversification, deferral of sales tax will be given for nine years and the total amount thus given shall not exceed 80 per cent of the additional investment made in fixed assets. (ii) For the new units, the total amount of deferral of sales tax will be given for nine years to the full extent of the total investment made in fixed asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l appearing for the petitioner has argued making reliance on the judgment of the Taxation Special Tribunal reported in the case of Ghouseiya Gram Flour Mills v. Deputy Commercial Tax Officer, Krishnagiri reported in [1996] 101 STC 149. The facts of the above case is not similar to the facts of the present case, in the sense that the activity was continuously going on in the same that instead of gram dhall flour maize flour has been manufactured by the petitioner therein. In that case, the scheme of interest-free deferral has not been taken into consideration for resolution of the dispute therein but the mere covenant contained in the agreement has been taken into consideration and held that the covenant has not stated that there should be a manufacturing activity. Hence, the above decision is not applicable to the facts of the present case particularly when the scheme as extracted above required the activity of the petitioner to generate the sales tax, then only they are entitled to get the deferral or waiver of the sales tax that is postponement of the sales tax for a later period. The counsel also relied on the decision of the Supreme Court in Commercial Taxes Officer, Jodhpur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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