| Headnote |
Constitution of India, 1950: Article 226-Writ petition-Alternative remedy-Availing/exhaustion of-Maintainability-High Court entertained writ petition notwithstanding the existence -Of the statutory remedy-Interference with-Held: In such circumstances, the Supreme Court would not reconsider the question of the alternative remedy being efficacious or not. D H.P. :General Sales Tax Act, 1968: Sales Tax-"Prestigious cement unit"-Notification dated 1.12.1994 granted exemption from payment of sales tax and certain incentives to 'prestigious cement units' registered with the Empowered Committee between 1.5.1992 and 31.3.1995-Such units were required to commence commercial production on or after 1.5.1992-However, extension of time to commence commercial production beyond 1.5.1992 was granted to an industrial unit Entitlement to Exemption-Held:Cement manufacturing units registered as 'prestigious unit' between 1.5.1992 and 1.12.1994 were entitled to exemption-Such units not required to seek re-registration as a 'prestigious cement unit'-Once extension of time to commence commercial production was granted, such units entitled to the benefit of the Notification. Sales Tax-AYs 1995-96 and 1996-97-Revisional order-Doctrine of merger-assessment order granted exemption from payment of sales tax fixing certain dates of entitlement-Assessee questioned the dates by filing appeals, which were dismissed-Revisional Authority did not take note of the said appellate orders-Correctness of-Held: The assessment order got merged with the first appellate orders and, therefore, could not be revised without noticing them-In such cases the Doctrine of merger applied. Sales tax-Exemption-Notification granted exemption from sales tax and certain incentives to units registered with the Empowered Committee- Provisional registration certificate granted to assessee for a certain period-Assessee applied for renewal before expiry of the said period and deposited the requisite fee-But renewal certificate was effective from a date which was about two months after the expiry of the provisional certificate-The said renewal certificate was also issued much later-However, application for extension of period of validity never rejected-Entitlement to Exemption-Held: In such cases the question of absence of a valid provisional certificate lost significance-Hence, assessee entitle to exemption from sales tax. Central Sales Tax (Registration and Turnover) Rules, 1957: Rule 12(7)-object of-Declaration Form-Form 'C'-Assessee was denied benefit of sales tax exemption on the plea that defective Form 'C' was filed-Assessee 's prayer to rectify the defects turned down-Held: Object of R. 12(7) is to ensure that the assessee is not denied a benefit available to it under law on a technical plea-Therefore, the provision of filling of declaration form along with the return is directory and not mandatory-In a given case, the declaration form could even be filed before the Appellate or Revisional Authority-Hence, assessee entitled to sales tax exemption-Assessing Officer directed to grant opportunity to the assessee to cure the defects, if any, in the declaration form-Central Sales Tax Act, 1956. Mines and Minerals (Regulation and Development) Act, 1957: Section 9-Removal of minerals-Royalty paid-Purchase tax on Liability-Held: Royalty is an alternative to dead rent-It is nothing but a measure of levy-Royalty is not a payment in respect of any mineral removed or consumed-Hence, royalty does not attract levy of purchase tax. Words & Phrases: "Royalty" and "dead rent"-Meaning of-In the context of Mines and Minerals (Regulation and Development) Act, 1957.The respondent was a public limited company incorporated under the Companies Act, 1956 and, inter alia, carried on the business of manufacture and sale of cement. The Director of Industries issued a registration certificate registering the respondent-company as a 'prestigious unit' whereby certain incentives were granted to the respondent subject to the condition that the production should commence by January 1995. However, further extension was granted to the respondent-company by the Department of Industries till 30.9.1995. Subsequently, by Notifications dated 27.3.1991 and 31.7.1992 the concept of 'Prestigious cement industrial unit' was brought into existence according to which an industrial unit must go into commercial production after 1.5.1992 and registered with the Empowered Committee of the Department of Industries. The respondent was declared as a 'prestigious cement industrial unit' in accordance with the said Notification. In the light of all these, the 'Excise and Taxation Department issued a Notification dated 31.12.1994 granting exemption from payment of sales tax to the respondent-company under the Central Sales Tax Act, 1956 and Himachal Pradesh General Sales Tax Act, 1968. The Assessing Authority passed an order of assessment for the Assessment Year 1995-96 and granted exemption from payment of sales tax w.e.f. 30.1.1996. The respondent-company filed an appeal before the Additional Excise and Taxation Commissioner/Appellate Authority challenging the said assessment order on the ground that the exemption should have been granted from the date of commencement of the commercial production, namely, 26.9.1995 and not from 30.1.1996, the date of issuance of the exemption Notification. Subsequently, the Sales Tax Department passed an assessment order for the year 1996-97 granting exemption from payment of sales tax w.e.f. 6.2.1996, which was the date on which the Notification was actually published instead of from 30.1.1996 with reference to which it was granted earlier. Once again the respondent-company filed an appeal against this assessment order also. While the appeals were pending a show cause notice under Section 31(3) of the State Act was issued to the respondent as to why the exemption granted could not be revoked on the ground that the declaration of the respondent as a 'prestigious cement unit' within the meaning of paragraph 1(c) of the Notification dated 31.12.1994 was not correct and, therefore the respondent was not entitled to any exemption from sales tax either under the Central Act or the State Act. The appeals filed by the respondent were also dismissed notice demanding payment of sales tax to the tune of Rs. 18.50 crores under the Central Act as well as the State Act was also served on the respondent company. The respondent-company filed an appeal against this demand before the Additional Excise and Taxation Commissioner. The Revisional Authority cancelled and annulled the sales tax exemption certificate with retrospective effect and also made a reference to certain defects in the declaration form i.e. A 'Form C' to highlight as to how the respondent had failed to comply with the requirements for entitlement of sales tax exemption benefits. The High Court allowed the writ petition filed by the respondent and quashed the orders of the Sales Tax authorities and also held that the levy of purchase tax on the royalty paid was not legally sustainable. Hence the appeal. On behalf of the appellant, it was contended that the High Court ought not to have entertained the writ petition when alternative remedy was available under the Central Ad and the State Sales Tax Act, if the respondent-company was aggrieved by the revisional orders; that several factual controversies were involved and the High Court was not justified in holding that no factual controversy was involved; that whether the exemptions claimed were available in factual background needed factual adjudication and, therefore, the High Court should not have entertained the writ petition; that the respondent-company was not a 'new industrial unit' registered with the Empowered Committee between 1.5.1992 and 31.3.1995 and had not commenced Commercial production on or after 1.5.1992; that there was no evidence before the revisional authority that the respondent-company was registered with the Empowered Committee on 13.1.1993 and, therefore, the High Court should not have taken the same into account; that the High Court confused between 'prestigious units' and 'prestigious cement units'; that the question of declaring the respondent-company as a 'prestigious cement unit' did not arise till it had started commercial production; that the Notifications clearly showed that at different points of time either no benefit was granted to cement industries or such industry was entitled to only deferent of payment of sales tax and exemption; that submission of defective declaration form (Form 'C') clearly indicated that the respondent-company had not complied with the various Statutes, Rules and Notifications; that even if there was a registration with the Empowered Committee on 13.1.1993, the same was of no consequence after the new definition of prestigious cement industrial unit' was introduced by the notification dated 1.12.1994; that the High Court erroneously held that royalty paid did not attract levy of purchase tax; that there was a contrast between sale and purchase and the definition of purchase is wider; that according to Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957 what was being taxed was the consideration as minerals were being removed; and that in any event, purchase tax on royalty had not been paid and, therefore, that also amounted to violation of the conditions stipulated. On behalf of the respondent-company, it was contended that the revisional authority clearly acted without jurisdiction; that there was really no factual dispute involved; that resort to the statutory remedies would have been an exercise in futility as the Appellate Authority was only subordinate to the Revisional Authority; that this Court should not interfere since the High Court had entertained the writ petition indicating reasons as to why the writ petition was entertained when alternative remedy was available; and that the respondent's prayer before the Revisional Authority for grant of an opportunity to rectify the defects, if any, in the Form 'C' was turned down. |
