Court No. - 38
Case :- SALES/TRADE TAX REVISION No. - 767 of 2010 Revisionist :- M/S Vijay Laxmi Rice Mill Mini Thru Prop. Dharmendra Kr.
Opposite Party :- The Commissioner Commercial Taxes U.P. Lucknow Counsel for Revisionist :- ,Pooja Talwar Counsel for Opposite Party :- C.S.C.
Hon'ble Jayant Banerji,J.
Heard Shri Vipin Kushwaha, learned counsel for the revisionist and Shri Jagdish Mishra, learned Standing Counsel appearing for the opposite party.
This revision has been filed under Section 58 of the U.P. Value Added Tax Act, 20081, challenging the judgement and order dated 2.6.2010 passed by the Commercial Tax Tribunal, Uttar Pradesh, whereby the Appeal No. 10 of 2010 filed against the order passed under Section 42 of the Act of 2008, has been dismissed.
The facts in brief are that the applicant is a proprietorship concern and had established a new mini rice mill at Ram Nagar Vikas Khand, Uruva, Allahabad. Pursuant to an announcement for exemption for a new unit by the State Government, the revisionist applied under Section 4-A of the U.P. Trade Tax Act. The exemption certification was granted for a period of 10 years from 13.2.2001 to 12.2.2011, or to the extent of fixed capital investment of Rs. 9,96,912/- whichever is earlier. Consequently, the assessment orders were passed and the benefit of exemption were quantified by the assessing authority. Up till 31.12.2007, fixed capital investment to the limit of Rs. 8,38,778/-, was utilized and the balance of Rs. 1,57,833.12 was still available to the revisionist. With effect from 1.1.2008, the U.P. Trade Tax Act was replaced by the Act of 2008. Section 42 of the Act of 2008 provided for grant 1 Act of 2008 of deferment from payment of tax provided certain condition is fulfilled. Section 42 of the Act of 2008 was substituted by the Ordinance No. 3 of 2008 made by the State Government which was enforced with effect from 16.7.2008. According to the provisions of the aforesaid ordinance, the industrial unit availing the benefit of exemption from or a reduction in the rate of tax under the U.P. Trade Tax Act may apply for issue of certificate of entitlement in the prescribed form and in the prescribed manner.
On 30.1.2009, the U.P. Value Added Tax Act (Amendment) Rules, 20092 was introduced with effect from 30.1.2009. The amended Rule 70 for the first time provided that an application for issue of certificate of entitlement shall be filed within 30 days from the date of publication of these Rules or upto 31.8.2008 whichever is later. On coming to know of the amended provision, an application under Form XLV dated 04.09.2009 was filed by the revisionist before the Commissioner, Commercial Tax, U.P., on 15.09.2009. A show cause notice dated 29.10.2009 was issued by the Commissioner as to why the application for certificate of entitlement be not dismissed as not maintainable on the ground of limitation. A reply was submitted by the revisionist. However, by an order dated 7.1.2010, the Commissioner, Commercial Tax dismissed the application made under Section 42 on the ground of its being barred by limitation. The appeal filed before the Commercial Tax Tribunal by the revisionist was also dismissed.
It is the contention of the learned counsel for the revisionist that under the Act of 2008, there is no provision prescribing a time limit for filing an application in Form XLV. What is provided is that the Commissioner shall decide it within 60 days from the date of receipt. It is further contended that the Act of 2008 does not specify a period of limitation within which an application is 2 Rules of 2009 required to be moved under the relevant provision of Section 42 of the Act of 2008, and Section 79 of the Act of 2008 does not authorize the State Government to frame a rule to prescribe a period of limitation for the same. The learned counsel has relied upon a judgement of the Supreme Court in the case of Sales Tax Officer, Ponkunnam and another Vs. K.I. Abraham3 in support of his contention that merely because in Clause (a) of sub-section (3) of Section 42 of the Act of 2008, the words 'in the prescribed form and in prescribed manner' have been mentioned, Rule 70 cannot be amended to specify or limit the period of time to file an application in Form XLV. The contention is that the Form XLV was filed before the Commissioner, Commercial Tax, U.P. on 15.9.2009 which was within a reasonable period of time given the fact that the amendment in Rule 70 of the Rules of 2008 came into force by means of a notification dated 30.1.2009.
The learned Standing Counsel has opposed the revision on the ground that after enforcement of the Act of 2008, the revisionist was enjoined to file an application under Section 42 read with Rule 70 of the Rules 2009 within a period of 30 days from the date of publication of the Rules or upto 31.8.2008, whichever is later. Learned counsel has referred to the judgement and order passed by the Tribunal to contend that it is an admitted fact that the revisionist had filed its quarterly returns in Form XXIV and therefore, he cannot take the plea that he was unaware of the provisions of the Act for claiming the benefit of exemption.
Having heard the respective contentions advanced by the learned counsel for the parties and on perusal of the record, the point requiring consideration is whether the Authorities were justified in rejecting the application made by the revisionist in Form XLV on the ground of limitation and whether the judgement 3 AIR 1967 Supreme Court 1823 of the Supreme Court in case of Sales Tax Officer, Ponkunnam (supra) would inure to his benefit.
It is not in dispute that the petitioner filed the application in Form XLV on 15.9.2009. The provisions of the amended Rule 70 were made in exercise of powers under Section 79 of the Act of 2008 read with Section 21 of the U.P. General Clauses Act, on the Governor being satisfied that circumstances existed which rendered it necessary for him to take immediate action to make the rules without previous publication under the proviso to sub-section (3) of Section 79 of the Act of 2008. The amended Rule 70, that is enclosed as Annexure No.4 to the present revision, is as follows:
"(1) Industrial unit availing or granted the facility of exemption or reduction in the rate of tax under erstwhile Act, may apply to the Commissioner for issue of certificate of entitlement duly filled and signed by the person authorized under sub-rule (6) of rule 32, in form XLV up to 31st August 2008 or within thirty days from the date of publication of this rule whichever is later.
(2) A copy of the application along with enclosures, if any, shall be served to the assessing authority and certified copy of such receipt shall be annexed to the application.
(3) The assessing authority shall, after examining relevant record and after giving the dealer a reasonable opportunity of being heard if necessary, send to the Commissioner a report in form XLVI within a period of thirty days from the date of receipt of the application.
(4) If the Commissioner is satisfied that information furnished is correct and complete and report of the assessing authority confirms the particulars of the application, he shall issue the certificate of entitlement in form XLVII within sixty days of the receipt of the application.
(5) If the net tax payable for tax periods commencing on January2008 and ending with 30th June 2008, has not been deposited along with return of the tax period the same shall be deposited in following time schedule:-
(6) The net tax payable for the tax period after the tax period ending on 30th June 2008 shall be deposited along with return of the relevant tax period.
(7) If an industrial unit fails to deposit the net tax payable for the period and within the time prescribed under sub-rule (5) of this rule, the unit shall be liable to pay the interest provided under subsection (2) of section 33 of the Act and penalty, if any, in accordance with the provisions of section 54 of the Act
(8) The amount of refund or interest if any, under section 42 of the Act shall be made in accordance with the provisions of the rules 50 and 51.
(9) Aggregate of amounts of tax payable under the Act and the Central Sales Tax Act, 1956, shall be debited from the amount mentioned in the certificate of entitlement.
(10) Payment of tax, for which facility of deferment is available, for any assessment year, shall be deferred for a period of five years and such period of five years shall commence on the date immediately following the last date prescribed for submission of tax return of the last tax period of such assessment year.
(11) The dealer availing the facility of deferment or refund of net tax payable under the Act shall file statement of computation of net tax payable, total amount of eligibility, amount availed up to last month, amount availed in the month and balance at the end of the month, along with the return of the tax period in form XLVIII."
The relevant provisions of Section 42 of the Act of 2008 as follows:-
“42. Treatment of industrial units availing exemption or reduction in the rate of tax under erstwhile Act.- (1) No industrial unit,-
(a) availing benefit of exemption from or reduction in the rate of tax under the erstwhile Act or under the Central Sales Tax Act, 1956 on the turnover of sales or purchase or both as the case may be, before the commencement of this Act; or
(b) which is granted the benefit of exemption from or reduction in the rate of tax on the turnover of sale or purchase or both as the case may be, under the erstwhile Act or under the Central Sales Tax Act, 1956;
shall be permitted to avail the benefit of exemption from, or reduction in the rate of, tax on the turnover of sale or purchase or both as the case may be, on or after the commencement of this Act.
(2) The industrial unit availing the benefit of tax deferment under the erstwhile Act or under the Central Sales Tax Act, 1956 before the commencement of this Act or a unit which is granted facility of tax deferment under the erstwhile Act or under the Central Sales Tax Act, 1956 shall continue to avail the facility of deferment for net tax payable under this Act and the Central Sales Tax Act, 1956, subject to such conditions and restrictions as may be prescribed.
(3) (a) the industrial unit availing or granted benefit of exemption from, or reduction in the rate of tax under the erstwhile Act or under the Central Sales Tax Act, 1956 on the turnover of sales of manufactured goods or turnover of purchase of any raw material, processing material, consumable stores, fuel other than petrol and diesel, lubricant required for use in manufacture of goods or in the packing of goods manufactured by such industrial unit or both, and
(i) whose facility of exemption or reduction in the rate of tax is based on the fixed capital investment as provided under the erstwhile Act or notification issued there under; or
(ii) an industrial unit purchased from the State Government or any corporation or undertaking owned or controlled by the State Government and to whom exemption or reduction in the rate of tax has been granted under the erstwhile Act may apply to the Commissioner for issue of the Certificate of Entitlement in the prescribed form and in prescribed manner.
(b) The Commissioner after examining the relevant records and report from the assessing authority and if he is satisfied that the information furnished is correct and complete, shall issue within 60 days from the date of receipt of the application, the Certificate of Entitlement in prescribed form and in prescribed manner containing such particulars as may be prescribed including period of validity of certificate and amount of entitlement if any.
(c) If the Commissioner is satisfied that particulars furnished by an industrial unit in the application is wrong or incomplete or is not worthy of credence, he shall after giving the applicant the opportunity of being heard, reject the application and inform the industrial unit accordingly.
(d) Subject to an appeal to the Tribunal under section 57 the order passed by the Commissioner in this behalf, shall be final.
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Section 42 of the Act of 2008 provides for treatment of industrial units availing exemption or reduction in the rate of tax under the erstwhile Act. Sub-section (1) prohibits industrial units to avail the benefit of exemption from or reduction in the rate of tax on the turnover of sale or purchase or both, as the case may be, before the commencement of the Act of 2008. Sub-section (2) provides that industrial units that are availing the benefit of tax deferment under the erstwhile Act or under the Central Sales Tax Act, 1956 before the commencement of the Act of 2008, or a unit which is granted facility of tax deferment under the erstwhile Act or under the Central Sales Tax Act, 1956 shall continue to avail the facility of deferment for net tax payable under this Act and the Central Sales Tax Act, 1956 subject to such conditions and restrictions as may be prescribed. Sub-section 3(a) provides for making an application to the Commissioner by the industrial unit availing or granted benefit of exemption under the erstwhile Act and whose facility of exemption is based on the fixed capital investment, for issuance of Certificate of Entitlement in the prescribed form and in the prescribed manner. Clause (b) of sub- section (3) of Section 42 provides for issuance of certificate of entitlement within 60 days from the date of receipt of the application by the Commissioner after examining relevant records and report from the Assessing Authority and if he is satisfied that the information furnished is correct and complete. Clause (c) of sub-section (3) of Section 42 provides for rejection of such an application by the Commissioner if the particulars furnished by the industrial unit in the application is wrong or incomplete or not worthy of credence.
Thus, the entitlement of industrial units to avail the benefit of exemption under the erstwhile Act or under the Central Sales Tax Act, 1956 is governed by the provisions of sub-section (3) of Section 42 which provides for applying to the Commissioner in the prescribed form and in the prescribed manner. The purported prescribed form and manner are mentioned in the aforesaid Rule 70 of the Rules of 2009.
The State Government's powers to make Rules under the Act of 2008 is provided in Section 79 which is as follows:-
“79. Power to make rules.-
(1) The State Government may make rules to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing powers, such rules may provide for-
(a) all matters expressly required or allowed by this Act to be prescribed;
(b) the registration of persons engaged in the sales or purchase of goods and the imposing of condition in respect of the sale for the purpose of enforcing the provisions of this Act;
(c) the determination of the turnover for the purpose of assessment of tax under this Act;
(d) compelling the submission of tax returns and the production of documents and enforcing the attendance of a person and examining them on oath or affirmation;
(e) the appointment, duties and powers of the officers appointed for the purpose of enforcing the provisions of this Act;
(f) generally regulating the procedure to be followed and the forms to be adopted in proceedings under this Act;
(g) refunds of amounts deposited under sub-section(1) of Section 40 or 41, the procedure for such refunds and the period within which they may be made;
(h) the custody of the goods seized under this Act; and
(i) the matters which are to be or may be prescribed;
(3) The power to make rules conferred by this section shall be subject to condition of the rules being made after previous publication for a period of not less than four weeks:
Provided that if the State Government is satisfied that circumstances exist which render it necessary for it to take immediate action, it may make any rule without such previous publication.
(4) All rules made under this section shall be published in the Gazette and upon such publication shall have effect immediately as if enacted in this Act.”
In the case before the Supreme Court in the matter of Sales Tax Officer, Ponkunnam (supra), the time period prescribed in Rule 6 of the Central Sales Tax (Kerala) Rules, 1957, for filing a declaration form required to be furnished under the provisions of Section 8 of the Central Sales Tax Act was being considered. Clause (a) of sub-section (4) of Section 8 of the Central Sales Tax Act provided for a dealer furnishing to the prescribed authority in the prescribed manner by filling in a declaration in the prescribed form obtained from the prescribed authority. While considering Rule 6 of the Central Sales Tax (Kerala) Rules, 1957, the Supreme Court held that the time period prescribed in the Rules was beyond the scope of the prescription made in Clause (a) of sub-section (4) to Section 8 of the Central Sales Tax Act and accordingly, the third proviso to Rule 6(1) prescribing a time limit for filing of the declaration by the registered dealer, was held to be ultra vires. In the case before the Supreme Court, the date prescribed by the third proviso to Rule 6 (1) was 16.02.1961 and the dealer had filed the declaration form on 08.03.1961. It was held by the Supreme Court that in the absence of any such time limit, it was the duty of the assessee to furnish the declaration in Form C within a reasonable time, and it was the admitted position that the assessee did file the declaration on 08.03.1961 before the order of assessment was made by the Sales-tax Officer. The opinion accordingly was that the assessee had furnished the declaration in Form C within a reasonable time and there had been a substantial compliance of S. 8
(4) (a) of the Act.
In the present case, the Section 42 of the Act of 2008 provides for conditional entitlement of benefit of the exemption granted to the revisionist under section 4-A the U.P. Trade Tax Act, 1948. Moreover, this case is a revision under Section 58 of the Act of 2008. It is not the case of the revisionist that he has filed a writ petition or that any writ petition has been filed challenging the vires of the provision for limitation prescribed for filing an application in Form 45 under Rule 70 of the Rules of 2009. Thus, the contention of the learned counsel for the petitioner that the limitation prescribed by Rule 70 of the Rules of 2009, being not in consonance with the judgement of the Supreme Court in the case of Sales Tax Officer, Ponkunnam (supra), would not disentitle the revisionist to the benefit of exemption, is unmerited in the facts and circumstances of the present case.
For the reasons aforesaid, the decision of the Commissioner, Commercial Tax, dated 7.1.2010 made under section 42 of the Act of 2008 and the order dated 02.06.2010 of the Commercial Tax Tribunal in appeal, cannot be faulted. The questions of law are accordingly answered, and this revision is, accordingly, dismissed.
Order Date :- 20.12.2021 A. V. Singh (Jayant Banerji, J.)