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2015 (9) TMI 370 - SUPREME COURT

2015 (9) TMI 370 - SUPREME COURT - 2015 (324) E.L.T. 248 (SC), [2015] 84 VST 489 (SC) - Rate of CST @2% or 1% - Industrial Policy of the State of Himachal Pradesh - period 01.04.2009 to 17.06.2009 - The whole thrust of the contention advanced by the State is that since the notification under the Act providing for tax concession was issued only on 18.06.2009 wherein it was specifically mentioned that the notification would have immediate effect and would operate for the period ending on 31.03.201 .....

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ication, it cannot be held that the eligible units are not entitled to the concession till the Department issued the notification.

No doubt, the statutory notification issued by the Excise and Taxation Department under Section 8(5)(b) of the Act on 18.06.2009 has stated that the eligible units will be entitled to the concession with immediate effect. Merely because such an expression has been used, it cannot be held that the State Government can levy the tax against its own policy. .....

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Kurian, J. Leave granted. 2. Whether the appellant is liable to pay Central Sales Tax (hereinafter referred to as CST ) @ 2 per cent on the inter-State sales for the period 01.04.2009 to 17.06.2009 or @ 1 per cent in view of the Industrial Policy of the State, is the dispute arising for consideration in this case. It is not in dispute that as per the Industrial Policy of the State of Himachal Pradesh, the appellant had been enjoying the concessional rate in CST @ 1 per cent upto 31.03.2009. It .....

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the CST @ 1 per cent wherein the expression … with immediate effect for the period ending 31.03.2013 was used. 3. The High Court, as per the impugned judgment, took the view that the expression … with immediate effect has to be given a plain meaning, and therefore, the appellant is not entitled to the concession which it had been enjoying upto 31.03.2009 till the Notification dated 18.06.2009 is issued by the Excise and Taxation Department. 4. Heard Shri M.P. Devanath, learned Cou .....

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ds manufactured by new and existing industrial units (as defined under these Rules) unless provided otherwise elsewhere under these Rules, upto 31-03-2009. This incentive will not be provided to industrial unit engaged in the production of breweries, distilleries, non-fruit based wineries and bottling plants (both for country liquor and Indian made foreign Liquor). 6. It is not in dispute that the appellant was found eligible for the said concession since it satisfied the parameters prescribed i .....

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e case for the extension of the Special Package for our State announced in January 2013 till at least March 2013 as it expires in March 2010. In the absence of any decision or any positive indications so far, it is imperative that the State Government also at its own level considers taking such initiatives by way of which Industrial Enterprises being set up in our State could be provided some basic attraction in the form of tax incentives and a facilitating environment. Availability of such ince .....

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dversely and majority of big Enterprises may resort to branch transfer/consignment sales outside the State to avoid 2% CST to maintain their competitiveness. It is therefore proposed that the incentive of concessional rate of Central Sales Tax @ 1% be allowed to be continued beyond 31st March, 2009 till March 2013 or till the time CST is phased out. 4. With this proposal there would be no adverse financial implication and State will continue to earn the same rate of revenue through CST sale as I .....

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2013 or till the time the CST is phased out by the Central Government? 7. The Council of Ministers, in the Meeting held on 20.05.2009, approved the above proposal and, accordingly, the State Government through Principal Secretary (Industries) issued the following Notification on 29.05.2009: Government of Himachal Pradesh, Department of Industries (A) No. Ind.A(F) 6-3/2008 Dated Shimla - 02,29th May, 2009 NOTIFICATION In partial modification of this department notification No. Ind.A(F)6-7/2004 d .....

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and Taxation Department of the State Government issued statutory Notification under Section 8(5)(b) of the Central Sales Tax Act, 1956 (hereinafter referred to as the Act ). The relevant portion of the Notification reads as follows: 2. Now, therefore, in exercise of the powers conferred by clause (b) of sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), the Governor of Himachal Pradesh is pleased to direct that in respect of the sale in the courses of .....

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al Pradesh, the tax levied under sub-section (1) of section 8 of the said Act shall be calculated and payable at the rate of 1% of the taxable turnover of such goods with immediate effect for the period ending 31.03.2013. (Emphasis supplied) 9. The whole thrust of the contention advanced by the State is that since the notification under the Act providing for tax concession was issued only on 18.06.2009 wherein it was specifically mentioned that the notification would have immediate effect and wo .....

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of the notification issued under Section 8(5)(b) of the Act. Heavy reliance is also placed on the decision of this Court in State of Bihar and others v. Suprabhat Steel Limited and Others (1999) 1 SCC 31. 10. We do not think it necessary to go into the various contentions raised by the parties in view of the undisputed factual position we have referred to above. The State Government cannot speak in two voice. Once the Cabinet takes a policy decision to extend its 2004 Industrial Policy in the ma .....

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policy. Once the Council of Ministers has taken a decision to extend the 2004 Industrial Policy and extend tax concession beyond 31.03.2009, merely because the Excise and Taxation Department took some time to issue the notification, it cannot be held that the eligible units are not entitled to the concession till the Department issued the notification. It has to be noted that the Finance Department of the State Government had concurred with the proposal of the Department of Industries to extend .....

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bound by the policy decision taken by the Council of Ministers and duly notified by the Department concerned, viz., Department of Industries. 11. That apart, it appears, the Excise and Taxation Department itself has not actually intended the notification to take effect from 18.06.2009. The definition given to the new and the existing industrial units in the Notification dated 18.06.2009 would indicate so. To quote: Explanation I:- For the purposes of this notification,- (i) new industrial unit .....

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