ATUL AUTO LTD Vs. STATE OF GUJARAT

JUDGEMENT

(1.) All these appeals and writ petitions relate either to the levy of additional tax under section 4A of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Act") and the mode and manner of payment of such additional tax, or both. The facts and contentions raised by the respective parties are also more or less common and hence, the same were heard together and are decided by this common judgment.

(2.) The appellants in these appeals and the respondents in the writ petitions are dealers who at the relevant time were enjoying the benefit of exemption from payment of general sales tax, sales tax or, as the case may be, purchase tax under the relevant notification issued by the State Government in exercise of powers under sub-section (2) of section 49 of the Act. Under the incentive schemes framed under section 49(2) of the Act, exemption was granted to a particular limit calculated in terms of the Scheme. The Scheme also lays down the method for computing the entitlement limit of tax exemption. For the purposes of such computation, the amount of tax leviable under the relevant provisions of the Act is required to be calculated and the same is adjusted against the exemption limit.

(3.) In the appeals, the appellants have questioned the act of the assessing authority in adjusting the additional tax against the exemption limit by contending that additional tax under section 4A of the Act was not leviable in relation to sales or purchases which are wholly exempt from payment of sales tax, general sales tax or, as the case may be, purchase tax. In the writ petitions, the dealers had computed the additional tax and adjusted the same against the ceiling of exemption, however, according to the respondent authorities, additional tax not being a tax as envisaged under section 2(32) of the Act is not exempt under the Scheme and hence, could not be adjusted against the exemption limit and, therefore, the amount of additional tax was required to be paid in cash. Accordingly, recovery of additional tax adjusted against the exemption limit was sought to be made together with interest thereon. Subsequently, the State Government issued a notification dated 3rd March, 2001 amending the aggregation clause in the main exemption notification issued under section 49(2) of the Act whereby the amount of additional tax under section 4A of the Act was permitted to be adjusted against the limit of exemption. It was the case of the tax authorities that prior to the issuance of such notification, the dealers were liable to pay the additional tax in cash and from the date of the notification, viz., 3rd March, 2001, the additional tax could be adjusted against the limit of exemption. The matters ultimately reached the Gujarat Value Added Tax Tribunal (hereinafter referred to as "the Tribunal"), which by a common order dated 4th May, 2006 held that sub-section (1) of section 4A of the Act requires every dealer liable to pay tax under sections 3, 3A and 4 to pay additional tax. The dealers who are covered under sub-section (2) of section 49 of the Act are also dealers who are liable to pay tax under sections 3, 3A or 4 of the Act and hence, are liable to pay additional tax. The Tribunal also held that the amount of additional tax could be adjusted against the ceiling limit from the date of the notification viz. 3rd March, 2001, however, for the period prior thereto, such amount was payable in cash. By a common order dated 12th June, 2006 rendered in the case of M/s. D.K. Trivedi & Sons v. State of Gujarat which is subject matter of challenge in these appeals, the Tribunal followed its earlier decision rendered in Second Appeal No.18/2006 and 19/2006 and allied matters.