OM SHIV SHAKTI CEMENT PVT LTD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THESE writ petitions raise common questions for consideration and, therefore, they are being disposed of by a common order. In sub-section (2) of section 4 of the Rajasthan Sales Tax Act, 1954, it has been provided that where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, the State Government may, by notification in the Official Gazette, exempt, whether prospectively or retrospectively, from tax the sale or purchase of any goods or class of goods or any person or class of persons on such conditions and on payment of such fee as may be specified in the notification. Similar provision with regard to grant of exemption from Central sales tax is contained in sub-section (5) of section 8 of the Central Sales Tax Act, 1956. In exercise of the aforesaid power conferred by sub-section (2) of section 4 of the Act and sub-section (5) of section 8 of the Central Sales Tax Act, the State Government issued two notifications dated 23rd May, 1987 whereby it introduced two Schemes called the "sales Tax Incentive Scheme for Industries, 1987" (hereinafter referred to as "the Incentive Schemes" ). The Incentive Scheme under section 4 (2) of the Rajasthan Sales Tax Act has been issued in order to exempt industrial units from payment of tax under the Rajasthan Sales Tax Act on the sales of the goods manufactured by them within the State, in the manner and to the extent and for the period as covered by the notification. The Incentive Scheme under section 8 (5) of the Central Sales Tax Act has been issued in order to exempt industrial units from payment of tax under the Central Sales Tax Act on the sales made in the course of inter-State trade or commerce of the goods manufactured by them within the State, in the manner and to the extent and for the period as covered by the notification. Both the Incentive Schemes introduced by the said notifications came into operation with effect from 5th March, 1987 and are to remain in force up to 31st March, 1992. The provisions of the Incentive Schemes are identical and they are applicable in the areas mentioned in annexure A to the notifications to new industrial units, industrial units covered by 1985 dispensation, sick units and to expansion and diversification of existing units. Under clause 4 of the Incentive Schemes the industrial unit which is granted eligibility certificate under the abovementioned notifications is exempted from payment of tax on sales made within the State of the goods manufactured by it. The quantum of sales tax exemption and the period of eligibility of exemption are prescribed in annexure C to the Incentive Schemes. Clause 7 of the Incentive Schemes makes provision for grant of eligibility certificate and requires the industrial unit eligible for sales tax exemption under the Incentive Schemes to make an application in form A appended to the notifications to the Member-Secretary of the appropriate screening committee as mentioned in clause 2 (k) of the Incentive Schemes within 90 days of the publication of the notifications or commencement of commercial production, whichever is later. The screening committee has been empowered to pass appropriate orders for sanction/refusal of eligibility certificate an in case of sanction of eligibility certificate, the sanction is to be conveyed in writing to the assessing authority concerned and the assessing authority is required to issue the eligibility certificate in form B appended to the notifications within a period of seven days from the date of receipt of the sanction. Clause 8 of the Incentive Schemes lays down that the eligibility certificate once granted, shall be normally valid for a period of one year and the eligible units desirous of extending the period of the eligibility would have to apply for renewal of the eligibility certificate in form A to the Commercial Taxes Officer having jurisdiction, not less than one month before the expiry of the eligibility period of the certificate and the Commercial Taxes Officer is required to dispose of the said application within a period of 15 days of the receipt of the application and in the event of failure to do so, the applicant is required to apply for renewal to the appropriate screening committee and the said committee is required to dispose of the application before the expiry of the eligibility period of the original certificate. The said clause also prescribes that the renewal shall be made for one year at a time. Clause 9 of the Incentive Schemes lays down that the industrial unit covered by the Incentive Schemes shall be subject to all the provisions of the Act and the Rules made thereunder and the terms and conditions contained in the notification and of the assessing authority, after affording an opportunity of being heard to the industrial unit, is satisfied that the breach of any conditions has been committed, he shall, after obtaining prior permission of the Commissioner of Commercial Taxes, levy tax on the finished goods not taxed under the tax exemption scheme, as if there was no exemption and there was escapement of tax.

(2.) IN Writ Petitions Nos. 3141 of 1987, 3310 of 1987, 1157 of 1988 and 1169 of 1988, the petitioner is M/s. Om Shiv Shakti Cement Private Limited, a private limited company, having a small-scale unit at Sikar and it manufactures and sells Portland cement. The said unit of the said petitioner commenced production from 11th September, 1985. The said petitioner submitted applications for grant of eligibility certificates under both the INcentive Schemes on 12th June, 1987, on the basis that it is a "new industrial unit covered by 1985 dispensation". The case of the said petitioner is that while the said applications of the petitioner were pending consideration, the assessing authority, viz. , the Commercial Taxes Officer, Sikar, passed orders dated 6th October, 1987 making provisional assessment under section 7-B of the Rajasthan Sales Tax Act in relation to the turnover for the month of July, 1987 and for the period 12th June, 1987 to 30th June, 1987 and issued demand notice for the recovery of the tax assessed under the said assessment orders and further a notice dated 21st October, 1987 was issued under the section 7-B of the Rajasthan Sales Tax Act in relation to the turnover for the months of August and September, 1987. IN Writ Petition No. 3141 of 1987, the said petitioner has prayed that a writ, order or direction be issued directing the issuance of the eligibility certificate to the petitioner under the INcentive Scheme and also for quashing the assessment orders and demand notices dated 6th October, 1987 and for issue of a writ of prohibition and prohibiting further proceedings on the basis of notice dated 21st October, 1987. It appears that assessment orders and demand notices dated 6th October, 1987 were also issued by the assessing authority under section 9 of the Central Sales Tax Act read with section 7-B of the Rajasthan Sales Tax Act and a notice dated 21st October, 1987 was also issued under section 9 of the Central Sales Tax Act read with section 7-B of the Rajasthan Sales Tax Act. Writ Petition No. 3310 of 1987 has been filed by the petitioner to challenge the aforesaid assessment orders and demand notices dated 6th October, 1987 and the notice dated 21st October, 1987. After the filing of these writ petitions eligibility certificates were granted to the petitioner under the INcentive Schemes on 8th February, 1988 and the said eligibility certificates have been made effective from 8th February, 1988 to 7th February, 1989. Assessment order date 6th November, 1987 was also passed by the assessing authority under section 7-B of the Rajasthan Sales Tax Act and under section 9 of the Central Sales Tax Act read with section 7-B of the Rajasthan Sales Tax Act in respect of the period 1st August, 1987 to 30th September, 1987 in pursuance of the notices dated 21st October, 1987 under challenge in Writ Petitions Nos. 3141 of 1987 and 3310 of 1987 referred to above. The petitioner, therefore, filed Writ Petitions Nos. 1157 of 1988 and 1169 of 1988 to challenge the said assessment orders dated 6th November, 1987 and the demand notice issued for the recovery of the tax assessed under these assessment orders. IN these writ petitions the petitioner has submitted that the eligibility certificates issued to the petitioner under both the INcentive Schemes should be operative from 12th June, 1987, the date of submission of the applications by the petitioner and the petitioner is entitled to avail the exemption under the INcentive Schemes on the turnover subsequent to 12th June, 1987.

(3.) BEFORE we deal with the aforesaid contentions of the learned counsel for the petitioners, we may refer to the decisions on which reliance has been placed by the learned counsel for the petitioners.