Tax authorities cannot reduce a total authorized cumulative tax exemption quota by the amount of tax forfeited for a period prior to the issuance of an eligibility certificate. Such a deduction imposes an inequitable double burden on the taxpayer, thereby constituting double jeopardy regarding the exemption limit.

ORDER :

Vivek Rusia, J.

This petition has been filed by the petitioner challenging the order dated 03.10.2005 whereby the Additional Commissioner, Commercial Tax, Indore has dismissed Revision Cases No. 37/05/Indore/Regional & 19/05/Indore/Central, filed under Section 62(1) of the MADHYA PRADESH COMMERCIAL TAX ACT , 1994 (hereinafter referred to as the ‘MPCT Act’) read with Section 9 (2) of the Central Sales Tax Act, 1956 (hereinafter referred to as the ‘CST Act’) affirming the order dated 03.12.2024 passed by the Appellate Commissioner, Commercial Tax, Indore and order dated 29.06.2022 passed by the Assistant Commissioner, Commercial Tax, Indore Division – 2.

2. FACTS OF THE CASE IN BRIEF :

2.1 The petitioner is a company registered under the Companies Act, 1956 [now Companies Act, 2013] and engaged in the business of manufacturing facilities for motor vehicles in its plant situated at Pithampur, District Dhar (MP). The petitioner is also a registered dealer and an assessee under the provisions of the MP Commercial Tax Act (MPCT Act). The regular assessment of the commercial tax of the petitioner for the Assessment Year 1998-99 was completed by the Assistant Commissioner, Commercial Tax, Indore Zone -2 on 29.06.2002 under Section 27(3) of the MPCT Act.

2.2 Petitioner has challenged the assessment order dated 29.06.2002 by way of appeal before the Appellate Deputy Commissioner, Commercial Tax, Indore under Section 61 of the MPCT Act ,except the claim of Rs. 38,92,585/- allowed by the Assessing Officer, for the period 01.04.1998 to 31.03.1999 (which is a subject matter of this writ petition). Admittedly, the petitioner was declared eligible by the government for exemption from payment of commercial tax under Notification No. A-3-34-94-ST-V(5) dated 28.02.1995 for a period of six years commencing from 29.04.1998 to 28.04.2004 or for the aggregate amount of Rs. 2,97,58,902, whichever is earlier. The appeal was considered on other issues and vide dated 17.12.2003 the first appeal was dismissed. Thereafter, petitioner approached the Commercial Tax Appellate Board, Bhopal by way of a second appeal. Vide order dated 31.08.2004, the Appellate Board set aside the order dated 17.12.2003 and remitted the matter back to the Assessing Officer for fresh assessment. The Assistant Commissioner Commercial Tax, Indore Division II reopened the case under Section 28(1) of the MPCT Act and reassessed the return of the petitioner vide assessment order dated 23.04.2003 whereby the tax of Rs. 73,81,605/- has been forfeited under Section 73(3) of the MPCT Act and the quantum of exemption of Rs. 2,97,58,902/- has also been reduced. The exemption was reduced up to Rs. 2,58,16,895/- due to forfeiture of Rs. 73,81,605/- on the ground that the petitioner was issued provisional eligibility certificates on 28.01.1999 with effect from 29.08.1998, therefore during the period from 29.04.1998 till 31.01.1999 he was not holding the exemption certificates in his possession and wrongly recovered the taxes.

2.3 Being aggrieved by the aforesaid reassessment order dated 23.04.2003, the petitioner preferred the first appeal before the Appellate Deputy Commissioner which came to be dismissed vide order dated 03.12.2004. Thereafter, the petitioner filed a revision, which was also rejected by the impugned order dated 03.10.2005. Hence, the present petition before this Court.

SUBMISSIONS OF THE PETITIONER

3. Shri Manoj Munshi, learned Senior Counsel appearing for the petitioner submitted that in the original assessment order dated 29.06.2002, the Ass