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TMI Blog2023 (7) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... dv. Mr. Pradeep Kumar Dubey, Adv. Mr. Siddharth Rajkumar Murarka, Adv. Mr. Soumik Ghosal, Adv. Mr. Gaurav Singh, Adv. Mr. Devvrat, AOR M/S. K J John And Co, AOR Mr. Pratap Venugopal, Adv. Ms. Surekha Raman, Adv. Mr. Akhil Abraham Roy, Adv. Mr. Abhishek Anand, Adv. Dr. M.V.K Moorthy, Adv. Mr. Hitendra Nath Rath, AOR Mr. Sridhar Potaraju, AOR Mr. Aayush, Adv. Mr. Rajat Srivastava, Adv. Mr. Mayank Singhal, Adv. Mr. Nikhil Singhvi, Adv. Ms. Supriya Juneja, AOR Mr. Shikhar Kishore, Adv. Mr. Bilal Ikram, Adv. Mr. Milind Raj Dixit, Adv. Mr. Parth Aggarwal, Adv. Ms. Vidhi Jain, Adv. For the Respondent : Mr. Sriharsha Peechara, Adv. Mr. Duvvuri Subrahmanya Bhanu, Adv. Mr. Rajiv Kumar Choudhary, AOR Mr. G. N. Reddy, AOR Mr. D. Mahesh Babu, AOR Mr. S.. Udaya Kumar Sagar, AOR M/S. Venkat Palwai Law Associates, AOR Mr. Guntur Prabhakar, AOR ORDER I.A. No. 30622/2018 in Civil Appeal NO. 5356/2011 is allowed. As common question of law and facts arise in this group of appeals and as they arise out of the impugned common judgment and order passed by the High Court, all these appeals are being decided and disposed of by this common judgment and order. 1. Feeling aggrieved and dissatisfied wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation dated 20.05.1996 was notified, it was a regime under A.P. GST Act, 1957. However, thereafter, A.P. GST Act, 1957 came to be repealed and the A.P. VAT Act, 2005 (hereinafter referred to as "Act, 2005") came into force w.e.f. 01.04.2005. Section 69(1) of the Act, 2005 provided that an industrial unit, availing tax exemption on the date of commencement of the Act, 2005 to be treated as a unit availing tax deferment. Consequently, the respective petitioners - industrial units were also treated as a unit availing tax deferment. Rule 67 of the Rules, 2005 prescribes the manner in which tax incentives are required to be treated. It specifically provides that where any unit is availing a tax holiday on the date of commencement of the Act, it shall be treated as converted as the unit availing tax deferment and the balance period available as on 31.03.2005 to such units shall be doubled. Meaning thereby, if as on 31.03.2005, an industrial unit was having two years remaining period for tax exemption / holiday, under Rule 67, such unit shall be entitled to the benefit of deferred tax payment for four years, i.e., double the remaining period. However, as per the illustration to Rule 67, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption / tax holiday were converted to the deferred tax units and when under the earlier industrial policy, the deferred tax units were entitled to 14 years deferment in paying the tax without interest and when under Section 69 read with Rule 67, all those, who availed the deferred tax benefit shall continue to avail the same and now, when the industrial units are converted to the deferred tax units, they shall also be entitled to the deferment in tax for a period of 14 years from Act, 2005, i.e., upto the year 2019. 3.2 It is further submitted that as such the industrial policy called "Target-2000" was to encourage and accelerate the industrial growth in the State. It is submitted that as such the earlier illustration to Rule 67 of the Rules, 2005 as such was absolutely in consonance with the said industrial policy and in line with the earlier G.O.Ms. No.108 dated 20.05.1996, which specifically provided for 14 years deferment and, therefore, the High Court has materially erred in dismissing the writ petitions and upholding the G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009 by which the deferred period has been substantially reduced. 3.3 It is further submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment dated 08.05.2009. 4.2 Now, so far as the submission on behalf of the respective appellants on the levy of interest for the period between 2005 to 2009 is concerned, the learned counsel appearing on behalf of the State is not in a position to dispute that the liability to pay the tax has arisen in view of the curtailment of the deferred payment of tax period due to G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009, and, therefore, he is also not in a position to justify the levy of interest for the said period. 5. We have heard the learned counsel for the respective parties at length. 5.1 At the outset, it is required to be noted that as per the original scheme prevailing prior to the VAT regime and under the Sales Tax regime, an industrial unit was entitled to two types of benefits, namely, (i) Tax deferment for 14 years; or (ii) Tax holiday for 7 years. Here are the cases in which the respective original writ petitioners - industrial units had opted for the second option, namely, tax holiday for 7 years. It appears that at the relevant time, when G.O.Ms. No.108 dated 20.05.1996 was issued providing for tax exemption / tax holiday, the same was permissible under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005 and for the period as mentioned in the eligibility certificate. 3) The tax payable and the tax to be claimed as deferment for each period shall be the net tax (i.e. output tax less input tax) which shall be debited to the eligibility amount. ILLUSTRATION: CDL Industries was granted tax holiday for a period of 7 Years from 10-10-1999 to 09-10-2006 for an amount of Rs.65,22,000. As on 31-03-2005, the dealer has availed an amount of Rs.45,10,000. The period originally available as on 01-04-2005 is 18 months & 9 days. As per the above sub-rule the dealer now is eligible to avail tax deferment for the balance amount of Rs.20,12,000/- for a period of 36 months and 18 days, i.e., 01-04-2005 to 18-04-2008. The amount of deferment availed for each month shall be paid at the end of fourteenth year, i.e., the amount of tax deferred for the month of April, 2005 shall be paid on or before 30th April, 2019. 4) Where any VAT dealer is availing deferment, a declaration in Form 502 shall be filed for every tax period in addition to the return in Form VAT 200. 5.3 Thus, under Section 69 read with Rule 67, all those industrial units, who availed the option of tax holiday / ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be any promissory estoppel applied against such Statute. Section 69 of the Act, 2005 and Rule 67 of the Rules, 2005 are very clear and the intention is also very clear, namely, to convert the industrial unit availing the tax holiday / exemption as the unit having tax deferment and the balance period of tax available as on 31.03.2005 to such unit shall be doubled. 5.6 Under the circumstances, the High Court has rightly dismissed the writ petitions upholding the subsequent G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009 and amendment to Rule 67 of the Rules, 2005. However, at the same time, there shall not be any levy of interest on non-payment of the tax for the period between 2005 to 2009, which is due and payable, now, in view of subsequent G.O.Ms. No.503 Revenue (CTII) Department dated 08.05.2009 and till Rule 67 of the Rules, 2005 came to be amended, respective industrial units were entitled to the benefit of deferred payment of tax. Therefore, from the date of the earlier illustration to Rule 67 of the Rules, 2005, which came to be subsequently amended in the year 2009, there shall not be any interest liability and even the penalty for the period between 01.04.2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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