Commercial Taxes Officer, Alwar Vs Vijay Solvex Limited and Another

@JUDGMENTTAG-ORDER

J.K. Ranka, J.@mdashInstant sales tax revision petition is directed against the order dated March 6, 1998, passed by the Rajasthan Tax Board, Ajmer (for short. "Tax Board") by which the Tax Board directed the State Level Screening Committee, Jaipur (for short, "SLSC") to consider the application of the respondent-assessee in the light of the directions given by the Tax Board. Brief facts, as emerging on the face of record, are that the respondent-assessee is a limited company and is engaged in the manufacturing of "vanaspati ghee" and applied on March 25, 1995 to DIC, Alwar, for the benefit under the Sales Tax Incentive Scheme, 1989, on the basis of diversification. Though the application was to be submitted in the office of the SLSC at Jaipur but the same was submitted on March 25, 1995 at Alwar. This application was forwarded by the DIC, Alwar, to the SLSC on May 17, 1995, i.e., after more than 45 days. The respondent-assessee also submitted an application directly to the Directorate on May 29, 1995, i.e., after more than two months of submitting it at the office of DIC, Alwar.

2. The SLSC, in its meeting held on June 29, 1995, while agreeing in principle to allow the benefit to the unit, desired a reference to be made to the Government of Rajasthan proposing that if "vanaspati ghee" units, which were put in the negative list on March 27, 1995, made 50 per cent investment or more before the aforesaid date and commenced commercial production by March 31, 1995, might be treated eligible for the benefit of the above incentive scheme. It was brought on record before the SLSC that a completion certificate was already issued in the case of the respondent-assessee on June 13, 1995, which was made effective from June 2, 1995 and the respondent-assessee, on the strength of such certificate, was entitled to avail of the benefit in accordance with the provisions of the Sales Tax Incentive Scheme, 1989.

3. The SLSC had series of meetings with reference to the respondent-assessee and other matters on June 29, 1995 and thereafter on March 29, 1996, however, the decision was deferred since necessary clarification/amendment in terms of SLSC decision dated June 29, 1995, was still awaited from Government. However, on an application moved by the respondents for early disposal dated March 13, 1996 to the Principal Secretary, Industries, the matter was taken up by the SLSC and it was felt that the unit, i.e., the respondent-assessee, in the light of the Explanation 1(c) under clause 8 of 1989 Scheme, was ineligible for the benefits under the scheme. Accordingly, the case was rejected. Against the said rejection, the respondent-assessee preferred an appeal before the Rajasthan Tax Board, who, vide order dated September 6, 1996, set aside the order of the SLSC and directed the SLSC to give a reasonable opportunity of being heard to the respondent-assessee and to pass a speaking order.

4. In pursuance to the order passed by the Tax Board, the SLSC again granted personal hearing to the director of the unit and it was pleaded by the director of the respondent-company that the date of submission of the application to DIC, Alwar may be treated as application submitted to the SLSC and if the SLSC did not treat the application given to the DIC, Alwar, the delay in submission may be condoned. It was also pleaded that the honourable Chief Minister of Rajasthan, in his budget speech in March, 1995, had declared that such units, which had made substantial investment prior to March 27, 1995, would not be deprived of the benefit of Sales Tax Incentive Scheme, even if they had not started commercial production before March 27, 1995.

5. However, the SLSC was not satisfied and it was observed by it that there was no occasion for the respondent-assessee, who was aware of the provisions of law and by no stretch of imagination, could have filed an application to DIC, Alwar on March 25, 1995, i.e., a day before the "vanaspati ghee" unit was put in negative list and, therefore, it was observed by the committee that there appears to be some manipulation of dates vis-a-vis the dates of production and submission of application with a view to take advantage of the benefit under the Sales Tax Incentive Scheme and accordingly the application was again rejected.

6. The matter was again carried to the Tax Board, who, vide impugned order, agreed with the submissions of the respondent-assessee and after referring to the submissions of counsel for the respondent-assessee, held that the respondent-assessee was entitled to the benefit conferred under the Incentive Scheme. Hence, this revision petition by the petitioner-assessing officer.

7. Shri R.B. Mathur, learned counsel for the petitioner-assessing officer submitted that it was widely known and it was already made aware to everyone or rather the units, which were manufacturing "vanaspati ghee" that there is excess production vis-a-vis the demand and on March 27, 1995, the honourable Chief Minister, considering the said aspect, put "Vanaspati ghee" in the negative list and on and from March 27, 1995, the benefits under the Sales Tax Incentive Scheme, 1989 were curtailed. He submitted that no case was made out by the respondent-assessee, who happened to be a limited company, being unaware of the provisions of law, supported by large number of advisers and running large unit that it filed an application silently with the DIC, Alwar, when it ought to have been submitted, in all respect, before the SLSC Jaipur and, therefore, he submitted that the SLSC was justified in coming out against the respondent-assessee. He also submitted that nowhere it has been brought on record by the respondent-assessee that the respondent-assessee had invested huge amount as claimed, in the unit. He submitted that the Tax Board is silent as also the respondent-assessee as to what was the total capital investment and as to how much capital investment was made on or before March 26, 1995. He also submitted that it has not been proved that the respondent-assessee started production on March 26, 1995 when application itself was moved by the respondent-assessee at DIC, Alwar on March 25, 1995 and at SLSC on May 29, 1995. He submits that the judgment, relied upon by the Tax Board in the case of Lokendra Industries v. State reported in (1993) 89 STC 277 (Raj), has been reversed by a later judgment of the honourable Supreme Court in the case of State of Rajasthan and Another Vs. Gopal Oil Mills and Another, and in the case of State of Rajasthan and Another Vs. M/s Mahaveer Oil Industries and Others, and, therefore, no case is made out for eligibility of the respondent-assessee for availing of benefits under the Incentive Scheme. He submits that vital and important aspects were ignored by the Tax Board without any material having been brought on record.

8. Accordingly, he submitted that the SLSC was justified in rejecting the claim of the respondent-assessee and the Tax Board was unjustified in brushing aside these relevant considerations and accordingly requested for reversal of the order.

9. Mr. Alkesh Sharma, learned counsel for the respondent-assessee, on the other hand, submits that the application was submitted in the office of the DIC, Alwar, as the respondent-assessee was conveyed that the application can be submitted in the office of the DIC, Alwar, who will forward it to the SLSC, Jaipur in due course of time. He submits that the application was submitted on or before the due date, therefore, the benefits, arising/accruing on account of such Incentive Scheme, ought to have been allowed by the SLSC itself and the Tax Board has considered the issue at length and, therefore, the order of the Tax Board deserves to be sustained. He further submits that on the basis of the certificate issued by the appropriate authority, commercial production was started on March 26, 1995 which has been admitted by the Tax Board and there is no doubt about such fact. He also referred to the fact about the budget speech delivered by honourable Chief Minister wherein it was categorically observed that in all such cases where the substantial capital investment has been made, then in those cases, the benefits would be conferred. He also relied upon the judgments in the case of State of Punjab Vs. Nestle India Ltd. and Another, and Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, He also submitted that thereafter, as per direction of the Tax Board, the SLSC was satisfied and passed an order granting benefit to the respondent-assessee vide order dated September 26, 1998. He further submitted that these are beneficial provisions and the benefit had been rightly allowed by the Tax Board and it should continue.

10. I have considered the arguments advanced by the learned counsel for the parties and perused the impugned order as well as the order passed by the SLSC and the judgments, relied upon by counsel for the parties.

11. At the outset, it has to be observed that during the course of arguments, it was desired from both the sides to provide the order by which it was claimed by the respondent-assessee that the production of "vanaspati ghee" started on March 26, 1995 as has been referred to by the Tax Board in para 14 of the said order, however, counsel for both the parties, showed their inability to provide copy of the certificate to the said claim. Similarly, a query was also made about copy of the application filed by the respondent-assessee in the office of the DIC, Alwar on March 25, 1995 so as to better appreciate the facts on record, however, copy of this application was also not provided and both the sides showed their inability to place on record copy of the said application. This application dated March 25, 1995 has a great bearing on the facts of the instant case, in as such as the SLSC has alleged that the dates were manipulated on the part of the unit to show the production and submission of the application with a view to take advantage of the benefit under the Sales Tax Incentive Scheme as it is claimed that the application was filed at Alwar on March 25, 1995 when the competent authority was SLSC, Jaipur, the production is shown to have started on March 26, 1995 and the budget speech is on March 27, 1995, i.e., the time gap is so little that the SLSC even doubted about the manipulation of the dates particularly in view of the fact that there was no occasion for the respondents to file an application at DIC, Alwar, when as per counsel for the petitioner-assessing officer, the application was widely known to have been submitted to the SLSC, Jaipur, to avail of benefits as per scheme.

12. It is true that the benefit arising as per the Incentive Scheme for the benefit to the assessees at large and being beneficial, should be granted but in the instant case, the facts have not been clearly stated on record and something more is required to be placed on record by the respondent-assessee as both the material facts, which the court wanted to peruse, were not available with either side of the parties. Be that as it may, without going into merits of the case any further as it may affect the final judgment, I set aside and restore the matter to the Tax Board again to re-decide the issue in the light of the observations made hereinbefore; (1) To call for and peruse the application dated March 25, 1995 which was submitted by the respondent-assessee in the office of the DIC, Alwar and as to why DIC, Alwar could have received the same and why it was forwarded to SLSC after more than 45 days; (2) The Tax Board will also verify the correctness with reference to the actual production having commenced on March 26, 1995; (3) The Tax Board will also consider the judgment in the case of Lokendra Industries v. State reported in (1993) 89 STC 277 (Raj), relied on by the Tax Board, which has been reversed by the honourable apex court in the case of State of Rajasthan and Another Vs. Gopal Oil Mills and Another, and in the case of State of Rajasthan and Another Vs. M/s Mahaveer Oil Industries and Others, and its impact on the facts of the instant case; (4) Total capital investment which was required to be made in the process of diversification and actual investment made by March 27, 1995. Accordingly, this revision petition is partly allowed and the matter is 14 restored back to the Tax Board to re-decide the issue afresh and denovo after affording proper opportunity of hearing to the respondent-assessee as well as the petitioner. Since considerable period has already expired, therefore, in the fitness of the matter, the Tax Board is directed to re-decide the issue finally within a period of four months from the date of receipt of certified copy of this order. No order as to costs.