INDIA EXPORTS Vs. STATE OF U.P.

JUDGEMENT

(1.) We have heard Shri Bharat Ji Agrawal, Sr. Advocate assisted by Shri Krishna Agrawal for the Petitioner. Shri S.P. Kesarwani, Addl. Standing Counsel appears for the State Respondents. Addl. Solicitor General of India, High Court, Allahabad has accepted notice on behalf of Respondent Nos. 4 and 5.

(2.) The Petitioner is an industrial unit established in the Noida Special Economic Zone (in short SEZ), manufacturing furniture, which is cleared for sale to Domestic Tariff Area Units (in short DTA Units) under Section 2 (i) of the Special Economic Zone Act and which means whole of India under the Special Economic Zone Act, 2005 (SEZ Act of 2005) but does not include areas of the Special Economic Zones. The sale are mostly made to hotels promoting furniture as capital goods under the Export Promotion of Capital Goods Schemes on concessional customs duty. The Petitioner also exports furniture outside India.

(3.) For the assessment year 2006-07 for Central Sales Tax, the Deputy Commissioner (Administration) Sector 14, Commercial Tax Noida rejected the account books and has imposed tax liability of Rs. 1,08,51,076/- on the Petitioner, on the turn over of Rs. 11,71,68,654/-. He issued demand of Rs. 7347798/-after adjusting the deposit of Central Sales Tax of Rs. 35,03,278/-. The Assessing Authority imposed central sales tax on the sales from SEZ to DTA, on the ground that vide notification dated 5.5.2006 the Central Sales Tax the sales from SEZ to DTA was exempt. By a notification dated 17.1.2007 issued by the State Government, the exemption on Central Sales Tax on sales from SEZ to DTA was withdrawn. Consequently the exemption was applicable only from 5.5.2006 to 17.1.2007. The Circular Letters dated 17.7.2007 and 9.8.2007 issued by the Commissioner, Commercial Tax it was clarified that the exemption was applicable only from 5.5.2006 to 16.1.2007. The assessing authority found that the circulars of the Commissioner of Commercial Tax are binding, and thus assessed and imposed Central Sales Tax.