INDIA CEMENTS LIMITED Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) THE CONTROVERSIES

(2.) IN the G.O. first read above, Tvl. Ashok Leyland Limited were granted incentive of sales tax deferral for a period of 10 years in respect of their project for manufacture of HINO/IVECO engines and expansion of capacity of existing vehicle assembly units at Ennore and Hosur. They were also granted sales tax deferral for 14 years in respect of their programme for introduction of new range of vehicles with State of the art technology to be obtained from M/s.IVECO at an estimated cost of Rs.438 crores. Subsequently, the Special Commissioner and Commissioner of Commercial Taxes, Madras raised a presumption that the company will be eligible for deferral only in an year when the annual actual production of a particular unit exceeds the benchmark figure for production in their units, as specified by SIPCOT (as a corollary, naturally the company would not be eligible for deferral where the actual production is lower). In the connection, the Government after detailed examination have issued clarifications in their letter Ms.second read above by fixing the Base Production volume and Base sales volume as eligibility for claiming deferral of sales tax by M/s.Ashok Leyland Limited for their expansion schemes. As these clauses protect the past revenue of the Commercial Taxes Department before the expansion, it was considered that the above conditions, i.e., fixing of base production volume and base sales volume may be insisted in all industries seeking the benefits of deferral of sales tax to their taking up of expansion projects. The Special Commissioner and Commissioner of Commercial Taxes, Madras has now reported that while issuing Eligibility certificate for expansion cases, SIPCOT alone adds a clause that past revenue before the expansion should be protected as other organisations, particularly District Industries Centre do not seem to be aware of this system and issue very open ended eligibility certificates, which often causes problems the Commercial Taxes Department, especially when some industries tend to take on more and more of the manufacture and same in the expanded units and decrease it in the old units. Accordingly, Taxes for the reason stated above, has recommended that the principles laid down for the Ashok Leyland Limited referred to in Government Letter Ms.No.113, Industries dated 15.3.1993 may be adopted as a general principle for all expansion cases and therefore he has suggested certain conditions.

(3.) THE actual shall however, be the least of the amounts mentioned in 4.1. and 4.2. below: