VICTOR CANE INDUSTRIES Vs. COMMISSIONER OF TAXES

JUDGEMENT

(1.) The appellant is a partnership firm having its place of business at Makum in the District of Dibrugarh, Assam. The firm is engaged in the manufacture of cane baskets and furniture and is a registered dealer under the Assam Sales Tax Act, 1947 as also under the Central Sales Tax Act, 1956. In order to foster industrial growth and development in the country, the Central Government and various State Governments from time to time have introduced a number of schemes offering incentive and subsidies to various industries keeping in view the industrial grown. Such benefits are limited for a certain duration of time, which is from the date of commencement of commercial production by an industrial unit. The main purpose being that during the period of infancy new industrial unit may secure a foothold in the industrial world.

(2.) The Government of Assam, in the Department of Industries, had also under its industrial policy, with a view to provide impetus to speedy industrial development in the otherwise industrially backward State announced a package of incentive by Notification dated 8.3.1969. With the passage of time, the necessity for the revision of the scheme already in existence was felt and the Government of Assam by a Notification dated 12.10.1982 announced new package of incentive, which was called, "The 1982 Scheme". The scheme was to be given effect from 15.10.1982 and was to last upto 31.3.1985. Apart from the other subsidies and incentives, one of them was sales tax exemption. Latter on the State of Assam passed an Act known as the Assam Industries (Sales Tax Concessions) Act, 1986 (Assam Act I of 1987) (hereinafter called the 1986 Act). This was with the object to consolidate and amend the provisions of law relating to sales tax in the matter of concessions to industries. By this Act the provisions of the Assam Sales Tax Act were amended to provide that no dealer would be liable to pay tax under the Assam Sales Tax Act in respect of sales of such goods produced by a new industrial unit as may be specified in the notification for a period of 5 years from the date of commencement of production. The aforesaid Act was brought into force with effect from 1.4.1988. The Government of Assam issued a notification as contemplated by the 1986 Act on 13th July, 1988. It provided that no dealer would be liable to pay tax under the Assam Sales Tax Act in respect of the sale of goods produced by the industrial unit in Assam for a period of 5 years from the date of commencement of production. However, the said notification, inter alia, provided that the sales made during the period 15th October to 31st July would be exempted only on furnishing certificate of eligibility issued by the authority as specified in sub-rule(a) of Rule 4 of Assam Industries (Sales Tax) Concession Rules, 1988. The appellant being a new industry established under the 1982 scheme of the Government of Assam, applied for eligibility certificate as contemplated under the scheme and was issued eligibility certificate on 28.3.1988, which was valid from20.10.87 to 21.10.92. The appellant being a new industry established under the 1982 Industrial Policy of the Government of Assam was generally exempted from the payment of tax under the Assam Sales Tax Act, 1947, who submitted its sales tax return for the period ending 31st march, 1988, 30th Sept., 1988 and 31st March, 1989 before the Superintendent of Taxes, Tinsukia with no tax liability under the Assam Sales Tax Act. It was the case of the appellant that as the goods produced by the appellant in its; unit were generally exempted from tax U/S. 3A of the Assam (Sales Tax) Act, 1947, the sales made by it in course of inter State Trade and Commerce were also exempted from the payment of tax by virtue of Section 8(2A) of the Central Sales Tax Act, 1956. It is further alleged that the appellant sold the goods produced in the new industrial unit in course of inter State Trade and Commerce without charging Central Sales tax Act as according to the appellant it was exempted from the payment of tax u/s.8(2A) of the Central Act. The Superintendent of Taxes, Tinsukia completed the assessment for the period ending 31.3.88,30.9.88 and 31.3.89 granting exemption and determining the tax liability to be nil in view of Section 8(2 A) of the Central Sales Tax Act, 1956. These assessments were done on 29.4.89, 20.12.89. and 28.12.89 respectively.

(3.) On 9.5.91 a show cause notice was issued to the appellant by the Assistant Commissioner of Taxes, Tinsukia zone directing the appellant to show cause by appearing before the authority as well as in writing as to why the assessment orders for the periods ending as mentioned above should not be cancelled and proceedings be not initiated u/s. 31(1) of the Assam Sales tax Act, 1947 read with Section 9(2) of the Central Sales Tax Act. The appellant showed cause, inter alia, contending that in view of the specific provision in the Assam Sales tax Act providing that no dealer would be liable to pay tax in respect of sales of goods produced by it in the new industrial unit for a period of 5 years and thereby granting general exemption from sales tax, no tax is payable under the Central Sales Tax Act by virtue of Section 8(2A) of the Central Sales Tax Act, 1956. It was also pointed out that similar matter was pending before this court in case of M/s. D.K. Enterprises -vs- State of Assam in Civil Rule No. 1776/90 and by the order dated 17.9.90 this court had issued rule and granted stay in respect of further proceedings.