I V P LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners have challenged the letter dated 6-9-1989 wherein the respondents had informed the petitioners that the money credit accumulated to the extent of Rs. 35,52,578. 50 ps. as per the Notification No. 27/87, dated 1-3-1987 cannot be utilised by the petitioners in view of the fact that the said Notification No. 27/87 has been rescinded with effect from 25-8-1989. By the said letter, the petitioners were called upon to reverse the credit to the extent of Rs. 1,59/245/- taken during the period 25-8-1989 to 28-8-1989. The petitioners have also challenged the validity of Notification dated 25-8-1989.

(2.) WHILE admitting the petition and granting interim relief, this Court on 18-10-1989 stayed the operation of Notification dated 25-8-1989 and directed that pending the hearing and final disposal of the petition, the petitioners will be entitled to utilise the credit already accrued to them up to 25-8-1989 as per Notification No. 27/87, dated 1-3-1987. In the said order the undertaking of the petitioners that if the petitioners ultimately fail then they would abide by the orders of the Court regarding credit taken pursuant to the interim order of this Court, was accepted.

(3.) THE Apex Court, in the case of Tungabhadra Indus, Ltd. v. Union of India, reported in 2000 (118) E. L. T. 545 (S. C.) held that the accumulated credit under Notification No. 27/87 does not lapse after the said Notification is rescinded on 25-8-1989. The Apex Court however clarified that where the assessee is entitled to take money credit under subsequent Notification No. 45/89, dated 11-10-1989, then the assessee cannot utilise accumulated credit under Notification No. 27/87 and under Notification No. 45/89 simultaneously. In other words, the Apex Court held that even after the Notification No. 27/87 was rescinded on 25-8-1989, the accumulated credit could be utilised by the petitioners. As per the above decision of the Apex Court, the petitioners are entitled to succeed and the impugned letter dated 6-9-1989 denying utilisation of the accumulated credit is liable to be quashed and set aside.