D J CHEM INDUSTRIES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) Gujarat Sales Tax Tribunal, Ahmedabad has made Reference to this Court under Sec.69 of the Gujarat Sales Tax Act, 1969 arising out of Reference Applications No. 28 and 29/94, the question referred to this Court for its opinion is as under:- Whether the tax applicable to the sales made against the certificates in Form-1 prescribed under Entry 118[2] of the Notification would also be required to be taken into consideration for computing aggregation of the tax exemption limit, after discarding the said certificates in Form No.1??

(2.) Short facts necessary for disposal of the present matter are that by, Notification issued under Sec.49[2] of the Gujarat Sales Tax Act, 1969 [?the Act? for short], Entry-118 was inserted in the Schedule appended to the Notification. Subject to conditions mentioned therein, sales by a specified manufacturer of goods manufactured by him were exempted from payment of the whole of the tax during the period specified in the eligibility certificate. Purchases by a specified manufacturer from unregistered dealers, and sales by dealers to the specified manufacturers, of raw material, processing material, consumable stores and packing material were also made exempt. The limit of maximum amount of tax up to which the assessee could claim benefit and the period during which such exemption could be availed of, were determined and certified in his eligibility certificate. In order to control and regulate this part of the scheme, so that an assessee does not avail of more benefit than allowed under the scheme, both as to the tax limit and time-limit, the liability of assessee to tax is required to be determined also for the period during which exemption certificate operates. Entry-118 envisages a general condition that as soon as the aggregate of amounts of tax which would have become leviable from the specified manufacturer but for the exemption under this entry or under Government Notification No. [GN 12] CST-1081-S. 8[5][32]-TH dated February 5, 1981 issued under sub-section [5] of section 8 of the Central Sales Tax Act, 1956 or under any drawback, set-off or refund during the period commencing on and from June 1, 1980 or as the case may be the date of commissioning the new industry becomes equal to the amount specified in the certificate as the eligible quantum of tax exemption, the exemption would cease.

(3.) For purposes of operating this condition, all the three turnovers under three sub-entries of Entry-118 have to be subjected to regular assessment as per the provisions of the Act as if Entry-118 does not exist and whatever tax that is assessed on such assessment under each of the sub-entries has to be aggregated and adjusted against the assessee's exemption limit.