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Rajasthan High Court · body

2001 DIGILAW 477 (RAJ)

C. T. O. Jalore v. Quality Granites

2001-03-22

RAJESH BALIA

body2001
Honble BALIA, J.–Heard learned counsel for the parties. (2). This petition is directed against the order passed by the Rajasthan Tax Board on 9.2.99 in appeal filed by the respondent- dealer against the order dt. 8.1.98 and 11.3.98 passed by the District Level Screening Committee (for short `DLSC). (3). The facts giving rise to this case are that the respondent had moved an application for sanctioning grant of eligibility certificate in his favour under the Rajasthan Sales Tax Incentive Scheme, 1987 (for short `1987 Scheme). His application was complete in all respects on 13.5.97. The claim to incentive was made on the basis that the commercial production at the new unit of the respondent-dealer started on 12.3.97. Before the DLSC considered and decided the application, by its letter dt. 29.10.97 gave his option that his application pending under 1987 Scheme may be treated as an application under New Sales Tax Incentive Scheme, 1989 which has also been made effective from the same date on which 1987 Scheme has come into force. (4). The DLSC which has decided this application on 8.1.98 considering the Explanation to definition of `New Industrial Unit under Clause 2(a) of 1987 Scheme which provided that date of commencement of commercial production would be taken as 61st day from the date on which the raw-material for the first time was put in the process of production including trial production, held that since the applicant has put the raw-material for the first time in the process of production on 12.03.1997 only, the date of the commencement of production shall be deemed to be 12.05.1997. Since the 1987 Scheme was in force only upto 31.03.1997, this application could not have been considered under 1987 Scheme. (5). With these findings the application of the dealer was rejected which was treated to be under 1987 Scheme only and he was left free to move fresh application under 1989 Scheme to the very same authority. In these circumstances petitioner thereafter moved a fresh application also in terms of aforesaid order dated 8.1.98 which was granted by DLSC in its meeting held on 11.3.98. However, the date of the commencement of benefit under the Scheme of 1989 was directed to be 29.12.97 when the petitioner has given option to treat his pending application for consideration under 1989 Scheme. (6). Aggrieved with both the orders the dealer appealed before the Rajasthan Tax Board. However, the date of the commencement of benefit under the Scheme of 1989 was directed to be 29.12.97 when the petitioner has given option to treat his pending application for consideration under 1989 Scheme. (6). Aggrieved with both the orders the dealer appealed before the Rajasthan Tax Board. The Rajasthan Tax Board found that application for grant of incentive was filed on 13.5.97 when the application was complete in all respects including the deemed date of commencement of production under Clause 2(a) of the Scheme of 1989 or under the Scheme of 1987 and therefore merely because in view of the opinion of the DLSC about the deemed date of commencement of production, on its finding the DLSC had desired to consider his application under 1989 Scheme, date of application remains the same because the Scheme of 1989 does not require fresh or new application to be made under the New Scheme, but accepts the pending application for consideration merely on the basis of a letter of option. (7). With these findings it accepted the appeal of the assessee to the extent it had made a request for amending the date of commencement of eligibility to avail benefit under the Scheme of 1989 w.e.f. 13.5.97 instead of 29.12.97. (8). The plea of the dealer that since he has commenced production on 12.03.1997 as per the certificate granted by the District Industries Centre on 12.03.1997 during the currency of the Scheme of 1987, he should be allowed to avail the benefit of Scheme of 1987, was rejected in view of option given by him on 29.12.97 and held that benefit given under 1989 Scheme was correctly given in view of option exercised by the dealer. (9). Learned counsel for the revenue contended that since the application under 1987 Scheme was rejected because of its not maintainability in 1987 Scheme, and the dealer has made a fresh application, he cannot be granted permission with effect from the date of application under 1987 Scheme but only w.e.f. 29.12.97 when he exercised option to avail benefit under 1989 Scheme. (10). Learned counsel for the respondents has supported the order of the Tribunal by pointing out that the dealer has appealed against both the orders and there being no fresh application and only option furnished by the applicant has been acted upon the date of application does not alter. (11). (10). Learned counsel for the respondents has supported the order of the Tribunal by pointing out that the dealer has appealed against both the orders and there being no fresh application and only option furnished by the applicant has been acted upon the date of application does not alter. (11). Having given my careful considerations, I am of the opinion that the respondents contention merits acceptance. (12). Under the Scheme of 1989 there is a clear provision in shifting of the option for availing the benefit of 1987 to 1989 Schemes even in the pending cases. The Scheme of 1989 has been brought into effect by notification dated 6.7.89 and it became operative w.e.f. 5.3.87 that is to say with effect from the same date on which 1987 Scheme became operative, and both the Scheme continued to be operative simultaneously until 31.3.97. It is for that reason Scheme of 1989 was given nomenclature of `New Incentive Scheme. (13). Sub-clause (b) of Clause 1 of 1989 Scheme envisages that industrial unit other than the new scheme covered by 1985 dispensation shall have an alternative option to seek the benefits under the Old Incentive Scheme or under the New Incentive Scheme. This benefit was not restricted to the applications made after the promulgation of the Scheme but was applicable even to cases pending before any Screening Committee when the new Scheme was notified. (14). In this connection sub-clause (c) of Clause 1 is very relevant which reads as under: ``An industrial unit, of which the application under the Old Incentive Scheme has been rejected on the ground of limitation only, or is pending before any Screening Committee shall be entitled to opt for the New Incentive Scheme by making a simple application on a plain paper to this effect before the appropriate Screening Committee. (15). The perusal of the aforesaid provisions goes to show that the industrial unit, of which the application under the 1987 Incentive Scheme was pending before any Screening Committee, was entitled to opt for the New Incentive Scheme by making a simple application on a plain paper. It is not in dispute that while the application of the respondent was pending before the DLSC and for consideration under the Scheme of 1987, he made an option to avail the benefit of incentive under the Scheme of 1989 by making an application as envisaged therein. It is not in dispute that while the application of the respondent was pending before the DLSC and for consideration under the Scheme of 1987, he made an option to avail the benefit of incentive under the Scheme of 1989 by making an application as envisaged therein. No new application was required to be filed. For that reason apparently requirement of the DLSC from the applicant to make a fresh application under 1989 Scheme was contrary to this provision. There is no doubt that date of the application of the industrial unit for grant of benefit remains the same and it has been left to owner either to opt benefit under the Scheme of 1987 or under the Scheme 1989, during the parallel continuance of both the Schemes, for the period to the extent the period covering both the Schemes remained the same. Taken in this light the option given on 29.12.97 by the dealer can only be considered in continuation of the pending application for considering the same under the Scheme of 1989. The completion of the said application was undisputedly 13.5.97. Because it was matter of considering pending application under either of the Scheme. Therefore after option to avail benefit under New Incentive Scheme, 1989 was given in December, 1997, it was academic whether the commercial production has commenced during the continuance of the Scheme of 1987 or it started commercial production after the period of 1987 Scheme has come to an end. As on the date the DLSC has considered the case of the respondent, the assessee has given his option to avail benefit under New Incentive Scheme and could be considered only under the New Incentive Scheme. Under the Scheme of 1989 the date of commencement of availability of benefit is only with effect from the date of application, therefore the question of commencement of commercial production prior to 31.03.1997 was merely academic and not germane. The DLSC was not justified in rejecting the application under 1987 Scheme and insist upon making a fresh application. To such extent the order of the DLSC dt. 8.1.98 was apparently erroneous. (16). The application for consideration under New Scheme remains the same. It is to be noticed that New Incentive Scheme of 1989 was brought into effect retrospectively w.e.f. 3.5.87 (almost from two years before the date of notification). To such extent the order of the DLSC dt. 8.1.98 was apparently erroneous. (16). The application for consideration under New Scheme remains the same. It is to be noticed that New Incentive Scheme of 1989 was brought into effect retrospectively w.e.f. 3.5.87 (almost from two years before the date of notification). If the contention of revenue is to be accepted and the date of application under New Incentive Scheme is to be treated date of exercise of option, it will result in nullifying the effect of making the New Scheme operative retrospectively parallel with 1987 Scheme. To make it clear option under New Scheme in respect of pending application could be made only after coming into existence of notification dt. 6.7.89. Hence in no case any question of option to treat the pending application under the New Scheme w.e.f. a date prior to date of notification will arise, so as to make the New Scheme operative during the period prior to date of its notification. Obviously fresh application under the New Incentive Scheme could also be made only after the date of its notification. That being so in no case the New Incentive Scheme can become operative prior to date of its notification w.e.f. 3.5.87. Such a mirage of making operative the Scheme retrospectively was not envisaged, nor such an interpretation can be adopted which defeats the clear provision. In these circumstances only view possible is that on exercise of option the pending application has to be considered as having been made under New Scheme as on the date such application was completed in first instance, else it will result in depriving the benefit of the concession in the very nascent period of the New Industry for tiding over the teething trouble and initial period by the New Industry is the primary object of the Incentive Scheme whether under 1987 Scheme or New Incentive Scheme. (17). It is apparent from the notice dt. 8.1.98 itself that application dt. 13.5.97 as well as option furnished on 29.12.97 were already before the DLSC on that date. The Rajasthan Tax Board has merely taken note of this factual position while considering the application about the date of completion of which is not in dispute, the application under the Scheme of 1987 automatically became effective under the Scheme of 1989 on furnishing option. (18). The Rajasthan Tax Board has merely taken note of this factual position while considering the application about the date of completion of which is not in dispute, the application under the Scheme of 1987 automatically became effective under the Scheme of 1989 on furnishing option. (18). In that view of the matter the only reasonable conclusion is one reached by the Tribunal that the date of commencement of the benefit to avail the sanction issued by DLSC in pursuance of application moved by the New Industrial Unit on 13.5.97 could be that date only and and no other date. (19). As a result, this revision fails and is hereby dismissed with no order as to costs.