ASHIRVADENTERPRISES Vs. STATE OF BIHAR

JUDGEMENT

(1.) The petitioner firm is a small scale industrial unit. It is a registered dealer under the Finance Act, 1981, and under the BLJ (2)-98 Central Sales Tax Act, 1956. In this writ application, the petitioner assails Annexure '5', an order passed by the second respondent-Deputy Commissioner of Commercial Taxes, Special Circle,-Patna, dated 9 6 1991. By the said order, the second respondent has declined the prayer of the petitioner for the issue of Form XXVIII-B under Rule 45 of the Bihar Sales Tax Rules, 1983 The ground of rejection was that the dealer has not deposited the admitted tax on or after 1.9.1991, by wrongly pleading the facility of set afforded by S. O. No 123 dated 5 3.1990

(2.) The petitioner-firm is engaged in manufacturing P. V. C. Pipes and fittings, H D P E. pipes and fittings and L D. P. E. pipes and fittings. It is stated that the petitioner was availing the benefit of S. O. No. 787 dated 10.9.1986, which was an incentive afforded to the small scale industrial units by the Mate Goverenment. The notification provided for facility of set off the tax paid on the purchase of raw materials used for the manufacture of goods with the sales tax payable by the dealer on sales of such manufactured goods and after such set off to pay only such amount of sales (ax which is in excess of amount paid by the dealer on the purchase of raw materials. This was in force till 31.8.1991. Even before the expiry of the said notification, the State Government promulgated a fresh notification No. S. O. 123 dated 5 3 1990, in exercise of the powers vested in it under section 22 of the Bihar Finance Act, 1981. The said notification dated 5.3.1990 is Annexure '1'. The benefit of the said notification was afforded to existing and newly established small and/or medium scale industrial units in the State. The units were allowed to set off the amount of sales tax paid by them on purchase of raw materials directly required for sale of manufactured goods within the State, with the amount of sales tax payable by such dealer on the sale of such manufactured goods, subject to the condition that such dealer did not purchase the raw materials at concessional rate under section 13 of the Act The petitioner had applied for and was granted a certificate of registration nnder section 13 of the Act. The certificate is granted by the prescribed authority not only for purchase of raw materials at concessional rate of tax but also for sale to Government department and purchase of plant and machineries and packing materials by a dealer engaged or intending to engage in manufacture of goods for sale. By notification No S O. 125 dated 5.3.1990, the facility of set off sales tax was extended for goods sold in the course of interstate trade or commerce. The said notification is Annexure '1'. The petitioner was availing the facility of set off so allowed. It is stated that respondent no. 2 began to create difficulties from March, 1992, and insisted that the petitioner should first deposit the entire amount of sales tax collected by it on sales of manufactured goods and file details of his claim for set off in respect of the amount of tax paid on purchases and the set off will be allowed only in the succeeding months. This direction was illegal. However, the petitioner deposited the entire amount of sales tax in March, 1992 Subsequently, the second respondent raised objection to the very eligibility of the petitioner to set off the tax and wanted the petitioner to file a clarification. Under rule 45 of the rules, the petitioner has to apply for the grant of road permit,"Form XXVIII-B" before the second respondent. It is after verifying the details the Form is issued. When an application was so made, second respondent, by order dated 9.6.1992, rejected the same (Annexure 5). The main ground, on which the application of the petitioner was rejected, is that the petitioner is registered under section 13 (b) of the Act and is entitled to the facility of purchasing raw materials at concessional rate of tax and so the petitioner was not entitled to the facility of set off under notification No. S O. 123. This has resulted in the entire business of the petitioner coming to a grinding halt The petitioner is not able to despatch any manufactured goods to its buyers without the road permits. The petitioner has received many orders. The rejection of the road permits, for the reasons stated by the second respondent, is illegal The proceeding to that effect evidenced by Annexure '5' is invalid. The registration under section 13 by itself does not disentitle the petitioner of the facility of set off. On these grounds, the petitioner prays for quashing Annexure-5 order and for the issue of a writ of mandamus directing the second respondent to issue sufficient Forms XXVIII-B to the petitioner to enable it to despatch the goods manufactured by it. It is the petitioner's case that during the relevant time though as had a certificate under section 13 of the Act, it was subsequently surrendered, and it never purchased any raw material at the concessional rate by using the certificate under section 13 of the Act after April, 1991 (see rejoinder affidavit of 13.1.94).

(3.) The respondents have filed a detailed counter-affidavit dated 7.7.1992. Supplementary counters are also filed. It is stated that Form XXVIII-B was withheld on the ground that though the petitioner has submitted a return, it has defaulted in making payment of admitted tax from the month of September. 1991 to May, 1992. It is further stated that the petitioner is not entitled to claim the facility of set off either on the basis of provisions of notification No. S. O. 787 dated 10.9.1986 or notification No S. O. 123 dated 5.3.1990. Since the petitioner is a registered dealer under section 13 (1) (b) of the Bihar Finance Act and enjoys the facility of purchasing raw materials at concessional rate it is not entitled to the benefit of S. O. 123 dated 5.3.1990.