TMI Blog2012 (4) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... Prasad For the Respondents : Manoharan Sundaram, Government Advocate (Taxes) and Ms. Narmadha Sampath, Standing Counsel for SIPCOT, ORDER :- K. CHANDRUJ.- The petitioner-company is an assessee under the Tamil Nadu General Sales Tax Act and is coming within the jurisdiction of the Deputy Commissioner (Commercial Tax), Fast Track Assessment Circle II, Chennai. 2. The petitioner-company had availed of IFST deferral scheme under diversification scheme. The scheme has been conceived by the State Government in order to promote industries in backward areas and referable to the power exercisable by the State in terms of section 17A of the TNGST Act, 1959. Under the said provision, the State Government, subject to such conditions as may be prescribed, by notification issued, can defer the payment by any new industrial unit or sick unit or sick textile mill of the whole or any part of the tax payable in respect of any period. The condition specified includes the intended seekers of such concession to get the eligibility certificate from the State Industries Promotion Corporation of Tamil Nadu Limited (for short, SIPCOT ). The petitioner having availed of the concession f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for deferment. The highest production/sale achieved by the company prior to the proposed expansion/diversification in the last three years is linear alkyl benzene was ₹ 34,981.84 lakhs for the year 1993-94. Accordingly, the revised eligibility certificate amended the stipulated BPV of 42,999 MT and BSV ₹ 17,491 lakhs per half yearly basis. The company stated to enjoy deferral sales tax only on the increased volume of production. Till reaching the volume of production specified in the certificate, the company will have to pay tax and any liability in excess of production specified alone will be eligible for company. 5. But, however the petitioner-company disregarding the conditions stipulated in the eligibility certificate had availed of deferral scheme which reads as follows: Year TNGST/VAT CST Total 2000-01 44,35,021 18,84,311 63,19,332 2001-02 1,18,56,251 13,82,349 1,32,38,600 2002-03 1,15,72,911 66,02,117 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale were deducted from the BPV and BSV, the petitioner-company had not maintained BPV in excess of BSV as stipulated in paragraph 5.3 of the eligibility certificate. 7. Even under G.O. Ms. No. 500, Industries (MIG.II) Department, dated May 14, 1990 and G.O. Ms. No. 119, Commercial Taxes and Religious Endowments Department, dated April 13, 1994, the company was eligible for deferral sales tax only on the increased volume of production. In fact in paragraph 3(v) of G.O. Ms. No. 119, CTRE Department, dated April 13, 1994, it has been stipulated as follows: (v) The base production volume and the base sales volume will have to be worked out and incorporated in the eligibility certificate at the time of issue by SIPCOT and District Industries Centres. 8. The Commercial Tax Department sent a letter to the SIPCOT on August 29, 2008. In their letter, they have sought for a clarification which is as follows: . . . it is observed that the SIPCOT extended the deferral benefit to the diversification project, viz. epichlorohydrin from the date of commencement of the deferral facility. For BPV, branch transfer/sales through agents shall be included. As tax receipts prior to expan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first writ petition, they have sought to challenge the communication sent by the Department, dated September 29, 2009 pursuant to the clarification issued by the SIPCOT. In the second writ petition, they have chosen to challenge paragraph 5.3 of the eligibility certificate dated December 28, 1999 (wrongly shown as December 28, 2009) may be to escape the attack that it was filed after 10 years. The petitioner has not explained as to why they have come forward to challenge the order after 10 years especially when at the instance of the Commercial Tax Department, the SIPCOT had already clarified by a subsequent order dated November 7, 2008 and that order is not under challenge before this court. 13. Both writ petitions were admitted on November 2, 2009. Pending the writ petition, this court had granted an interim stay for a period of four weeks. Subsequently, it was extended from time to time and finally on December 23, 2009, until further orders. On notice from this court, a common counter-affidavit, dated February 6, 2012 was filed by the respondentCommercial Tax Department. The petitioner has filed a common replyaffidavit, dated February 22, 2012. 14. Though elaborate argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had considered the similar question which arose under the Haryana General Sales Tax Rules, 1975 and while rendering findings it was observed in paragraphs 16, 17, 22, 23, 24 and 28 in SCC (paras 10, 13, 14, 16 in VST) as follows (pages 7-9 in 22 VST): 16. At the outset, we may state that there is a vital difference between the scheme of deduction and a scheme for exemption. Even within the scheme of exemption there is a basic difference between the 'basis' for computation of the quantum of benefit and the 'limit' or ceiling to be placed on that quantum. 17. There is no dispute that but for the exemption claimed, the assessee was a dealer, who was subject to incidence of sales tax under the 1973 Act. Its transactions were liable to be dealt with in accordance with the provisions of the Act relating to taxability. What was exempted under the Act and the Rules was payment of tax by a class of dealers who had been issued eligibility/exemption certificates. This is not in dispute. 22. Rule 28A deals with computation of the quantum of tax incentive available to a dealer in whose favour eligibility certificate is issued. In order to regulate the exemption schem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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