Back
2015 Supreme(Bom) 288
High Court of Judicature at Bombay
S.C. DHARMADHIKARI & SUNIL P. DESHMUKH, JJ.
M/s. Jitendra R. Gandhi - Applicant
Versus
The Commissioner of Sales Tax, Maharashtra State - Respondent
Sales Tax Reference No. 1 of 2007 in Reference Application No. 12 & 13 of 2001
Decided on: 26-02-2015
For the Applicant:P.V. Surte a/w. S.P. Surte i/b. P.V. Surte & Co., Advocates.
For the Respondent: V.A. Sonpal, Special Counsel.
The main legal point established in the judgment is that the revisional authority's powers under Section 57 are independent of the pendency of the appeal, and the eligibility for exemption benefits is determined based on the specific products listed in the eligibility certificate.
Headnote:
Bombay Sales Tax - Referral of questions under Section 61 - Sections 57 and 55 of the Bombay Sales Tax Act, 1959 - Summary of Acts and Sections: The court discussed the legal provisions contained in Sections 57 and 55 of the Bombay Sales Tax Act, 1959, and their interpretation in relation to the revisional jurisdiction and appellate powers of the authorities. The court also considered the 1979 Scheme of Incentives and Notification Entry 136 under section 41 of the Bombay Sales Tax Act, 1959, and its application to the exemption benefits for the manufacture of brass sheets.
Fact of the Case:
The assessee, engaged in the manufacture and sale of various utensils, claimed exemption benefits for the manufacture and sale of brass sheets under an eligibility certificate. The Sales Tax Officer initially allowed the claim, but the Assistant Commissioner later revised the assessment orders, disallowing the exemption and levying sales tax.
Finding of the Court:
The court found that the revisional authority was justified in exercising its powers under Section 57, independent of the pendency of the appeal before the appellate authority. It held that the brass sheets did not qualify for exemption under the eligibility certificate, as they were not specifically mentioned in the list of products eligible for exemption.
Issues: The issues involved the legality of the revisional jurisdiction exercised by the Assistant Commissioner and the eligibility of brass sheets for exemption benefits under the eligibility certificate.
Ratio Decidendi: The court held that the revisional authority's exercise of powers was not affected by the pendency of the appeal, and the brass sheets did not qualify for exemption under the eligibility certificate.
Final Decision: The reference was decided against the assessee, and in favor of the revenue, with no order as to costs.
Sunil P. Deshmukh, J.
1. The questions which have been referred to pursuant to provisions of Section 61 of the Bombay Sales Tax, 1959 are as under:
(i) Whether on the facts and circumstances of the case and on a true and correct interpretation of the provisions contained in Sections 57 and 55 of the Bombay Sales Tax Act, 1959, the Tribunal was legally justified in holding that the Administrative Asstt. Commissioner was legally justified in assuming the revisional jurisdiction under section 57, despite the appeals against the very assessment orders being pending under section 55 before the Appellate Asstt. Commissioner who was his co-ordinate authority?
(ii) Whether on the facts and in the circumstances of the case and on a true and correct interpretation of the provisions contained in the 1979 Scheme of Incentives and the Notification Entry 136 under section 41 of the Bombay Sales Tax Act, 1959, the Tribunal was legally justified in holding that the appellant was not entitled to the exemption benefits in the context of manufacture of brass sheets for the reason of the brass sheets being not specifically mentioned in the class of manufactured goods as specified in the eligibility certificate?
2. The facts giving rise to the present reference may be succinctly given as under.
The assessee M/s. Jitendra R. Gandhi was engaged in the manufacture of and sale of stainless steel utensils, aluminum utensils, milk cans etc. and is a registered dealer under the relevant provisions of the Bombay Sales Tax Act, 1959 (for short, “the Bombay Act”). The manufacturing unit of the assessee is situated at MIDC, Kherdi in Taluka–Chiplun, District–Ratnagiri which has been declared as a backward area for the purposes of grant of sales tax incentives, under the Package Scheme of Incentive, 1979. Under the same, the assessee has been granted Eligibility/Entitlement Certificate, conferring benefits of exemptions pursuant to Notification Entry 136 under Section 41 of the Bombay Act for the period 1986 to 1995 and did not have any monetary ceiling because his was a small scale unit. The eligibility certificate was issued on 4.6.1986 by the Development Corporation of Konkan Ltd. (DCKL) which referred to class of the goods/products manufactured in the unit to which the benefits could be availed, namely,
(i) Domestic stainless steel utensils,
(ii) Hospital equipment wares, furniture made of S.B. Strips and sheets,
(iii) Melting rolling of aluminum and aluminum alloys into terms of sheets, strips, circle product,
(iv) Aluminum utensils, household wares, outum, milk cans and rolling for mill for copper.
3. The assessee during the period from 23.10.1987 to 31.3.1989 and 1.4.1989 to 31.3.1990 inter alia, manufactured and sold brass sheets and claimed benefit of exemption under the Eligibility/Entitlement certificate held by the unit. Brass sheets being not referred to specifically in the class of manufactured goods in said certificate, the Sales Tax Officer disallowed claim of exemption and assessed sales tax dues in respect of manufacture and sale of brass sheets during the period.
4. The assessee, however, persisted with claiming benefit contending brass is an alloy of copper and as such it should be considered to be covered by the term “copper” appearing in class of goods considered for exemption pursuant to the Eligibility certificate. The Sales Tax Officer had acceded to the request of the assessee and dropped the demand/proposal levying sales tax in respect of the manufacture and sale of brass sheets. Accordingly the assessment orders dated 1.11.1991 in respect of aforesaid periods resulted into refunds.
5. However, being aggrieved by certain other disallowances, appeals were preferred by the assessee before Assistant Commissioner of Sales Tax (Appeals), Kolhapur Division, Kolhapur.
6. Along side, the Assistant Commissioner of Sales Tax (Administration-I), Kolhapur Division, Kolhapur issued notices dated 10.6.1992 proposing revision of the assessment orders i
