2014 Supreme(Raj) 499

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
SUNIL AMBWANI and PRAKASH GUPTA ORDER, JJ.
M/s Ambuja Cements Ltd. & anr. – Appellants
V/s
The State of Rajasthan & ors. – Respondents
Civil Writ Petition No.3233/2014,3235,3236,3237,3238,3242,3243,3250 of 2014
Decided On :- 19.12.2014

Headnote:

The petitioner company challenged the order dated 7.4.2014 and the demand notice of the same date served on the petitioners on 23.4.2014, whereby a total demand of Rs.34,30,44,244/-(including interest) has been raised, by way of enforcement of the undertaking given by the petitioner-Company, pursuant to the Notification dated 22.2.2002. The petitioner company challenged the demand as patently without jurisdiction and without authority of law, as well as on the ground that the impugned order is not an order passed under the provisions of the Rajasthan Value Added Tax Act, 2003.

Fact of the Case:

In the year 1996, the predecessor of the petitioner-Company, namely, DLF Cement established a new cement manufacturing unit at Rabriyabas at a total cost of Rs.400 crores and commenced production on 10.9.1996. A Rajasthan Sales Tax New Incentive Scheme for Industries, 1989 (for short, the Incentive Scheme of 1989”) was issued by the State Government vide Notification dated 6.7.1989, providing for grant of partial exemption of Rajasthan Sales Tax (RST) and also Central Sales Tax (CST) to the new industrial undertakings, subject to fulfilment of stipulated conditions. Under the Incentive Scheme of 1989, before or after the amendment dated 10.12.1996, the benefit available to a “Large Scale Cement Unit” was and continued to be 25% of the sales tax liability. The petitioner-Company applied, on which, the Eligibility Certificate was issued to it for grant of incentive to the extent of 25% for 11 years, as it had commenced commercial production before the amendment dated 10.12.1996. The petitioner-Company availed the incentive of 25% of the sales tax liability from 27.3.1997 to 21.2.2002.

Finding of the Court:

The petitioner-Company is a large scale cement unit, which had made a claim as “prestigious unit” under the Incentive Scheme of 1989. It was allowed the benefit as “large scale cement unit”, for which the benefit was available before and after the amendment dated 10.12.1996 to the extent of 25% of the sales tax liability vide Eligibility Certificate issued to it. The benefit was granted as predecessor of the petitioner-unit had commenced commercial production before the amendment dated 10.12.1996 for a period of 11 years. The benefit was availed to the extent of 25% of the sales tax liability from 27.3.1997 to 21.2.2002. The predecessor Company was issued the Eligibility Certificate under the Incentive Scheme of 1989. The Company had filed the review petition, which was rejected on which it approached the Tax Board, which remanded the matter on 29.3.2000 and on such remand, the review petition was rejected on 9.10.2001. The predecessor Company did not challenge the order rejecting the review petition by the SLSC and thus, its order had become final.

Issues: 1. Whether the undertaking given by the petitioner-Company on 19.3.2002 is enforceable against the petitioner-Company and that the petitioner-Company is liable to pay any amount under the said undertaking? 2. Whether the demand raised by the Assistant Commissioner, Commercial Taxes Department, Beawar (Rajasthan) vide order dated 7.4.2014 and the demand notice of the same date served on the petitioners on 23.4.2014, is legally justified?

Ratio Decidendi: 1. The petitioner-Company is clearly, in view of the undertaking given by it on 19.3.2002, in terms of Clause (3) of the Notification dated 22.2.2002, is not entitled to any relief from this Court. 2. The petitioner-Company was not entitled to the RST exemption beyond 25% and on which proceedings were initiated against the petitioner-Company. 3. The undertaking became effective as soon as the Supreme Court decided the matter on 19.2.2014 and that any benefit retained by the petitioner, if allowed to be retained, would result into reverse discrimination, whereas M/s Binani Cements would be able to claim incentive only to the extent of 25%, the petitioner despite its undertaking would get incentive of 75%. 4. The rehabilitation scheme (SS-04) sanctioned by the BIFR on 7.1.2004 did not provide for sales tax incentive beyond 25% nor there was any clause in the SS-04, which may have relieved the petitioner-Company from Benani effect. 5. The State Government was not required to challenge the order, as there was nothing in the Sanctioned Scheme-04, which could have interpreted in a manner to have allowed the exemption to the extent of 75% of sales tax payable without making the exemption subject to the liability to pay back 50% of the exemption amount in the event the judgment of the Rajasthan High Court in M/s Binani Cements was amended by the Hon'ble Supreme Court. 6. The petitioner-Company was availing the deferment of 75% in view of the Notification dated 22.2.2002, which on account of the reversal of the judgment of the Rajasthan High Court by the Hon'ble Supreme Court, was reduced to 25% and thus, the legal entitlement for deferment under the Notification dated 31.3.2006 was reduced to 25% for the years 2006-07 to 2008-09. The petitioner had availed additional benefit of 50%, which was not permissible as an effect of the judgment of Hon'ble Supreme Court in the matter of M/s Binani Cements. 7. The petitioner-Company was liable to pay the interest on the excess of the incentive in terms of the undertaking given by it to return the benefit actually availed and to pay without demur the loss to the revenue.

Final Decision: All the writ petitions are consequently dismissed with costs.