TAMILNADU PETROPRODUCTS LIMITED Vs. DEPUTY COMMISSIONER (CT) FAST TRACK ASSESSMENT CIRCLE II PAPJM BUILDING THIRD FLOOR GREAMS ROAD CHENNAI

JUDGEMENT

(1.) The petitioner-company is an assessee under the Tamil Nadu General Sales Tax Act and is coming within the jurisdiction of the Deputy Commissioner (Commercial Tax), Fast Track Assessment Circle II, Chennai. The petitioner-company had availed of IFST deferral scheme under diversification scheme. The scheme has been conceived by the State Government in order to promote industries in backward areas and referable to the power exercisable by the State in terms of section 17A of the TNGST Act, 1959, Under the said provision, the State Government subject to such conditions as may be prescribed, by notification issued, can defer the payment by any new industrial unit or sick unit or sick textile mill of the whole or any part of the tax payable in respect of any period. The condition specified includes the intended seekers of such concession to get the eligibility certificate from the State Industries Promotion Corporation of Tamil Nadu Limited (for short, "SIPCOT"). The petitioner having availed of the concession for deferring the payment of sales tax for the period from March 1, 1995-March 31, 1995 to April 1, 2004-February 28, 2005 for a period of 10 years, has to repay the tax in addition to the existing tax starting from March 1, 2005-March 31, 2005 till April 1, 2014-March 31, 2015. Paragraph 5.2 of the eligibility certificate obliges the petitioner-company to enter into an agreement with the Assistant Commissioner (Commercial Taxes) concerned as per the terms and conditions stipulated by the Department.

(2.) In the present case, the controversy arose out of paragraph 5.3 of the eligibility certificate which reads as follows:

(3.) After having availed of the eligibility certificate, they had entered into an agreement with the Sales Tax Department for manufacturing of epichlorohydrin under diversification scheme for a period of 10 years. The eligibility certificate dated December 28, 1999 was rescheduled on April 24, 2000 issued by the Managing Director, SIPCOT rescheduling the deferral period from April 1, 2000 to March 31, 2010 with corresponding repayment period from April 1, 2010 to March 31, 2020. As noted already, as per the eligibility certificate, the petitioner-company is eligible to get deferral sales tax only on the increased volume production/sales. For the purpose of determining the increased volume of production, the base production volume would be the highest volume of production or sale of the company in any one year during the last three years. Till reaching the volume of production/sale specified, the company will have to continue to pay the tax and any liability in excess of the production/sale specified above alone will be eligible for deferment. The highest production/sale achieved by the company prior to the proposed expansion/diversification in the last three years is linear alkyl benzene was Rs. 34,981.84 lakhs for the year 1993-94. Accordingly, the revised eligibility certificate amended the stipulated BPV of 42,999 MT and BSV Rs. 17,491 lakhs per half yearly basis. The company stated to enjoy deferral sales tax only on the increased volume of production. Till reaching the volume of production specified in the certificate, the company will have to pay tax and any liability in excess of production specified alone will be eligible for company.