TOSHBRO SHIMADZU LIMITED Vs. COMMISSIONER OF COMMERCIAL TAX

JUDGEMENT

(1.) THE petitioner, a limited company incorporated under the Companies Act, 1956, is aggrieved by the order dated July 26, 1995 (annexure P/12) of the District Level Committee (respondent No. 4) as also the orders dated July 26, 1998 and May 19, 1999 (annexures P/16 and P/18), passed in appeals by the State Level Committee (respondent No. 3) and the State Appellate Forum (respondent No. 2) respectively, disallowing petitioner's claim for including the amount of fees paid by it in acquiring technical know-how (for short, "tkh"), in the capital investment in fixed assets, for the purpose of grant of eligibility certificate to claim deferment in payment of commercial tax under the Madhya Pradesh (Deferment of Payment of Tax) Rules, 1986 (annexure P/5) (for short, "the Deferment Rules") read with State Government Notification No. A-3-l-92-ST-V (56) dated March 31, 1992 (annexure P/7) issued under Section 12 (1) of the Madhya Pradesh General Sales Tax Act, 1958 and Section 8 of the Central Sales Tax Act, 1956 and as amended by a subsequent Notification No. A-5-l-92-ST-II (68) dated August 16, 1993 (annexure P/8), so as to include within its ambit exemption from commercial tax payable under the Madhya Pradesh Commercial Tax Act, 1995.

(2.) THE petitioner-company has its factory in Electronic Complex, Pardeshipura, Indore, and carries on business of manufacture of ultra sound scanners. It has got registered as dealer under the Madhya Pradesh General Sales Tax Act, 1958 as also under the Central Sales Tax Act, 1956. After the repeal of Act 1958 it is now registered under the present Madhya Pradesh Commercial Tax Act, 1995. It is also registered as small-scale industrial unit with the Industries Department of Government of M. P. The petitioner-company, it appears has entered into a collaboration agreement with a Japanese company--Shimadzu Corporation for acquiring amongst other things, TKH and claims to have paid fee Rs. 78,99,068 for that purpose. For the purpose of this petition it is also not disputed that the petitioner-company has commenced its commercial production from May 9, 1993.

(3.) THE petitioner-company made an application under the Deferment Rules to the District Level Committee for grant of eligibility certificate which would enable it to claim benefit of deferment of payment of commercial tax. The petitioner claimed deferment in respect of the total capital investment to the tune of Rs. 1,33,35,586 which included the said amount of fees allegedly paid by the petitioner for acquiring TKH. The District Level Committee, vide its letter dated July 26, 1995 (annexure P/12) informed the petitioner-company that its claim for deferment certificate has been accepted in part only, i. e. , to the extent of Rs. 55,20,604. The petitioner's claim for inclusion of the said amount of fees was disallowed by the Committee. The appeals filed by the petitioner before the State Level Committee and the State Appellate Forum were also disallowed (vide orders, annexures P/16 and P/18 ). All the three authorities were concurrently of the view that the amount so spent was not an "investment in fixed assets" within the meaning of the Deferment Rules.