ALFA CYMEX TECHNOLOGIES LTD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THE petitioner, said to be engaged in the business of manufacturing of digital and electronic clocks, applied for and was granted benefits under the Sales Tax Exemption Scheme 1987 ('the Scheme'). The case of the petitioner in this writ petition is that due to recession in the market, it was unable to make optimum utilisation of the capacity and, therefore, could not avail full benefit under the Scheme and possession of the Unit has also been taken over by Bank of Baroda in enforcement of their security.

(2.) ACCORDING to the petitioner, the respondent No. 3 issued a wholly without jurisdiction notice on 15.11.2003 for withdrawal of benefits under the Scheme for not maintaining the average production as per Clause 4(e)(i) of the Scheme that was represented against; but then, the respondent No. 2 without any notice and without opportunity of hearing suddenly passed the impugned order dated 08.03.2004 (Annex.6) under Clause 9(b) of the Scheme for withdrawal of the benefit of the exemption granted to the petitioner with retrospective effect. The petitioner has further pointed out that the matter was pending before the District Level Screening Committee but the respondent No. 2 proceeded to pass the order and directed the Assessing Authority to recover the entire amount of sales tax; and the respondent No. 3 in pursuance of the order dated 08.03.2004 issued the impugned notice dated 15.03.2004 to the petitioner for payment of the entire amount of alleged sales tax; and thereafter though the petitioner made representation, the respondent No. 2 by the impugned order dated 21.07.2004 rejected the representation and Department has adopted coercive recovery proceedings. While challenging such withdrawal of benefits under the said Scheme, the petitioner has prayed for quashing of the demand raised and for striking down the proviso inserted below Clause 9(b) of the Scheme.

(3.) ON the matter being taken up today, Learned Counsel for the parties submit that the issue involved in this writ petition essentially stands concluded in view of the notification dated 11.04.2007 whereby the State Government decided to delete the said condition under Clause 4(e) (i) of the Incentive Scheme with retrospective effect from 21.03.1987 i.e, the date of commencement of the Scheme; and, therefore, maintenance of average production no longer remained a condition necessary to be fulfilled. It has also been pointed out that in respect of the corresponding demand under CST Act also, the Department has issued circular on 01.10.2007 writing off such demands which were raised because of the alleged violation of the said Clause 4(e) (i) of the Scheme. Learned Counsel further pointed out that noticing the said notification and circular, This Court has aloowed a cognate matter in SB CWP No. 3995/2005: Tripura Cement Limited v. The State of Rajasthan and Ors., decided on 05.02.2008; and has set aside a similar nature demand.