Allahabad High Court
M/S Jalpac India Ltd. vs The Commissioner, Commercial ... on 24 July, 2013
Bench: Arun Tandon
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 10
Case :- SALES/TRADE TAX REVISION No. - 621 of 2013
Applicant :- M/S Jalpac India Ltd.
Opposite Party :- The Commissioner, Commercial Taxes
Counsel for Applicant :- Piyush Agrawal,Bharat Ji Agrawal
Counsel for Opposite Party :- C.S.C.
Hon'ble Arun Tandon,J.
Heard Sri Bharat Ji Agrawal, Senior Advocate assisted by Sri Piyush Agrawal, Advocate on behalf of the assessee and Standing Counsel on behalf of the department.
Assessee before this Court seeks quashing of the order of the Commercial Tax Tribunal dated 26.02.2013 passed in Appeal No. 559 of 2011 along with connected appeals. Under the order impugned the Tribunal has held that the assessee was not entitled to rebate as claimed on the interstate sale of goods effected from NOIDA Depot of assessee within the State of U.P. For the purpose the Tribunal has recorded that under the notification dated 23.11.2000 issued in exercise of powers under Section 5 of the U.P. Trade Tax Act. It has been recorded that the notification dated 23.11.2000, which has been relied upon in support of his case by the assessee, issued in exercise of powers under Section 5 of the U.P. Trade Tax Act permits rebate in the tax only in respect of within state sales and even otherwise under the State Act there could not be an exemption in the matter of tax to be levied under the Central Sales Tax Act. It has further been held that the judgment of the Apex Court relied upon by the assessee in the case of Commissioner of Commercial Tax, Ranchi and another vs. Swarn Rekha Cokes and Coals Pvt. Ltd. and others, reported in 2004(Vol 136) STC page 57 has no applicability. Accordingly, the second appeals filed by the assessee have been dismissed.
Challenging the order so passed by the Tribunal Sri Bharat Ji Agrawal, Senior Advocate submitted before this Court that since under notification dated 23.11.2000 issued in exercise of powers under Section 5 of the U.P. Trade Tax Act rebate has been provided in the matter of sales effected within the State of U.P. from the NOIDA depot qua the goods manufactured by the assessee from its unit situate in Uttarakhand the same rebate would become applicable in respect of interstate sales also effected from the NOIDA depot situate within the State of U.P. in view of Section 9(2) of the Central Sales Tax Act. Since the said aspect of the matter has been completely ignored by the Tribunal, the order impugned cannot be legally sustained.
He then submitted that the law laid down by the Apex Court in the case of Commissioner of Commercial Tax, Ranchi and another (supra) has been completely misread by the Tribunal while holding that the law so laid down does not apply in the case to the assessee.
Standing Counsel in reply disputes the correctness of the contention so raised and it is submitted that no exemption/rebate notification under Section 8(5) of the Central Sales Tax Act has been issued in respect of the goods in question and that Section 9(2) only provides for the powers which are conferred upon the authority in the matter of exemption, assessment, recovery, appeals, revision etc. It cannot be read to confer a substantive right of rebate, as has been claimed by the assessee.
He explains that whenever the State Government desired for providing exemption/rebate in respect of the interstate sales, a notification under Section 8(5) has always been issued simultaneously with the notification under Section 5 of the U.P. Trade Tax Act. He further states that the facts of the case of Commissioner of Commercial Tax, Ranchi and another (supra) are clearly distinguishable, inasmuch as in the aforesaid case the State of Jharkhand vide notification adopted the statutory provisions which were applicable in the parent State of Bihar. It is in this background that the Apex Court held that the exemption provided to the unit under the Financial Act of State of Bihar would continue to apply to the unit situate in Jharkhand. He contends that the finding of the Tribunal that the judgment has no application in the facts of the case is correct.
I have heard learned counsel for the parties and have examined the records.
For the purposes of appreciating the controversy raised by means of the present revision it is worthwhile to reproduce Section 5 of the U.P. Trade Tax Act, which confers a power upon the State Government to provide rebate up to the full amount of tax levied on such conditions and restrictions as may be specified in the notification to be issued for the purpose. For ready reference Section 5 is being quoted herein below:
"Section 5. Rebate of tax on certain purchases or sales.
(1) Where the State Government is satisfied that it is expedient in the public interest so to do, it may by notification, and subject to such conditions and restrictions as may be specified therein, allow a rebate up to the full amount of tax levied on any specified point on:
(a) the sale or purchase of any goods, or
(b) The sale or purchase of such goods, by such person or class of persons as may be specified in the said notification.
(2) The rebate under sub-section (1) may be allowed with effect from a date prior to the date of the notification."
In exercise of powers under Section 5 the State Government has issued a notification on 23.11.2000 providing for grant of rebate in the matter of sales of goods by a manufacturer situate in the State of Uttarakhand from a depot situate within he State of U.P., so far as the goods are sold within the State. For ready reference the notification dated 23.11.2000 is being quoted herein below:
"K.NI.-2-3913/XI-9(129)/2000-U.P. Act-15-48-Order-(47)-2000
Dated:Lucknow: November 23, 2000
(Gazette dt. 23.22.2000)
WHEREAS, the State Government is satisfied that it is expedient in the public interest so to do:
NOW, WHEREFORE, in exercise of the powers conferred by section 5 of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act no. XV of 1948), the Governor is pleased to allow, within effect from November 24, 2000, a rebate of tax on the sale of goods by any dealer having his place of business in the State of Uttar Pradesh to the extent of exemption from or reduction in the rate of tax available to the manufacturing dealer having his place of business in the State of Uttaranchal on the sale of such goods, subject to the following conditions, namely:-
CONDITIONS
(i) Such goods are manufactured in a unit established in the State of Uttaranchal having eligibility certificate (validity commencing prior to November, 9, 2000) issued under section 4-A of the aforesaid Act for the manufacture of such goods.
(ii) such goods are sold for the first time after their manufacture within the period of exemption or within the period in which 95 percent monitory limit of exemption has been availed, whichever is earlier, after bringing them into the State by way of transfer other than sales by manufacturer having his place of business in the State of Uttaranchal.
(iii) certificate issued by the assessing authority of the State of Uttaranchal is produced before the assessing authority of the State indicating therein that the amount has been reduced in the overall limit of exemption available to the manufacturer.
(iv) rebate shall be withdrawn, if the certificate referred to in clause (iii) is found false."
It may be recorded that this notification has no application so far as interstate sales made from the depot at NOIDA are concerned nor any notification under Section 5 of the U.P. Trade Tax Act can provide for rebate/exemption in the matter of interstate sales which are taxable under the provisions of the Central Sales Tax Act.
The power to grant exemption/rebate under the Central Sales Tax Act flow from Section 8(5) of the Central Sales Tax Act. For ready reference Section 8(5) reads as follows:
"8(5) [Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, and subject to such conditions as may be specified therein, direct,-- (a) that no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sales by him, in the course of inter- State trade or commerce, from any such place of business of any such goods or classes of goods as may be specified in the notification, or that the tax on such sales shall be calculated at such lower rates than those specified in sub- section (1) or sub- section (2) as may be mentioned in the notification;
(b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter- State trade or commerce, by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in sub- section (1) or sub- section (2) as may be mentioned in the notification.]"
It is admitted on record that no notification under Section 8(5) has been issued by the State Government providing any exemption/rebate which could support the claim of the assessee.
Their entire claim for such rebate is based on Section 9(2) of the Central Sales Tax Act. It would be worthwhile to reproduce Section 9(2) of the Central Sales Tax Act, which reads as follows:
"9(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India, assess re-assess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references. refunds, rebates, penalties, Charging or payment of interest, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly;"
From a simple reading of the aforesaid provision it would be apparently clear that it is a provision for laying down the powers and procedure to be adopted by the authorities in the matter of assessment/re-assessment, collection, enforcement, appeal and revision etc. under the Central Sales Tax Act and it has been provided that the power and the procedure shall be the same as conferred under the State General Act. The clause does not confer a power to provide rebate in absence of a notification under Section 8(5) of the Act.
The clause itself starts from the word 'subject to the other provisions of this Act'. Meaning thereby that Section 9(2) is subject to the provisions of the other sections of the Central Sales Tax Act. Other sections would include Section 8(5) and therefore in absence of any notification under Section 8(5) providing for such exemption from interstate sales from the depot of NOIDA, the claim of the assessee appears to be unjustified. Section 9(2) cannot come to his rescue, inasmuch as there is no notification under Section 8(5) of the Central Sales Tax Act providing for exemption/rebate, as has been claimed. Therefore, the first ground raised on behalf of the assessee has not substance and is accordingly rejected.
So far as the judgment of the Apex Court in the case of Commissioner of Commercial Tax, Ranchi and another (supra) is concerned, suffice is to refer to paragraph 12 of the judgment wherein the notification issued by the State of Jharkhand dated 15th December, 2000 had specifically been quoted. The notification provided that the Governor of Jharkhand in exercise of power under section 85 of the Bihar Re-organization Act, 2000 read with Part 2 of section 283 of the Constitution of India had directed adoption of the Bihar Finance Act, 1981 and other Acts of the State of Bihar. It is in this background that the Apex Court has held that the law which were applicable to the undivided State of Bihar would continue to apply to the new State created by Act.
The facts in hand are clearly distinguishable. Therefore, the Tribunal appears to be justified in recording that the judgment relied upon by the assessee has no application.
In the facts and circumstances of the case, this Court finds no good ground to interfere with the order of the Tribunal.
Revision is dismissed.
Order Date :- 24.7.2013
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