APOLLO TYRES LIMITED Vs. SALES TAX OFFICER

JUDGEMENT

(1.) THE petitioners challenge the order made by the Sales Tax Officer (3), Division IV, Baroda, dated M4 at S. annexure C to the petition to the extent of deduction thereunder of Rs. 4,98,01,531 as the sales tax incentives enjoyed by the petitioner during the assessment period and to the extent of not allowing the petitioner-assessee, as sales tax incentives, the turnover tax to the tune of Rs. 14,88,380 and purchase tax to the tune of Rs. 37,52,821. A direction is sought on the respondent No. 3, the Assistant Commissioner of Sales Tax (Administration) for permanently restraining him from applying the provisions of paragraph 8 (iii) of the resolution dated June 16, 1987 and paragraph 13 (iii) of entry No. 175 of the notification of exemption issued under section 49 (2) of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the said Act" ). THE petitioners have prayed for quashing clause (iii) of paragraph 8 of the resolution dated June 16, 1987 as well as paragraph 13 (iii) of entry No. 175 of the notification under section 49 (2) of the said Act as arbitrary, illegal and unconstitutional.

(2.) AT the outset it may be mentioned that during the arguments, the learned counsel for the petitioners confined the reliefs sought to the challenge against the provision of paragraph 8 (iii) of the resolution dated June 16, 1987 and paragraph 13 (iii) of entry No. 175 of the notification issued under section 49 (2) of the said Act and the deduction of Rs. 4,98,01,531 in respect of goods transported for sale outside the State as sales tax incentives enjoyed by the petitioner under the order made by the Sales Tax Officer and did not press the challenge in this petition as regards turnover tax and purchase tax on the ground that an appeal was already preferred as regards those items by the petitioners-assessee and that they could be dealt with by the appellate forum.

(3.) THE Finance Department of the State Government had in respect of the Sales Tax Incentive Scheme for New Industries, 1986 issued resolution dated June 16, 1987 in context of the sales tax deferment incentives and it was provided that the new industrial units which had started commercial production of goods on or after April 1, 1986 shall be eligible for the benefit under the scheme. As per annexure II of the said resolution the quantum of sales tax deferment for pioneer units was indicated as 90 per cent of the fixed capital investment with a time-limit of 14 years from the date of commencement of commercial production in respect of the category A of the area. Under clause 8 of the said resolution which is sought to be challenged by the petitioners it was laid down that the limit of deferment shall be arrived at as indicated therein. Accordingly, as per clause 8 (iii) an amount calculated at the rate of 4 per cent or the rate applicable under the Gujarat Sales Tax Act, 1969 whichever was lower on the sale price of the goods transported by the new industrial unit to his own place of business or of his agent at any place within India but outside the State of Gujarat for sale there, was to be computed for arriving at the limit of deferment besides the aggregate amount of tax including additional tax that might have become leviable on the sales as well as the aggregate amount of Central sales tax which would have become leviable on inter-State sales. In this context, it may be mentioned that the provisions regarding payment of tax and deferred payment of tax are incorporated in section 47 of the said Act. Under the scheme of deferred payment of tax, the tax which is collected on the sales of the taxable goods is not required to be paid within the time prescribed for its payment but the payment is deferred. This facility was by way of an incentive and it had preceded by the facility of interest free loan for payment of the sales tax collected in respect of taxable sales.