Commissioner of Sales Tax vs Gajanan Oil Mill

Smt. Nirmala Nayak, Government Advocate, for the petitioner. None for the respondent.

Notice to the respondent has not been served. The Reference was made in the year 1999 and the order impugned based on which the Reference is made has been passed by the Board of Revenue, on 10.10.1995.

Even though the Reference is pending since 1999, till date even notice to the respondent is not served and the whereabouts of the respondent is also not available. Repeated opportunities granted to the State Government has not resulted in getting the notice served on the respondent.

This is a Reference received from Revenue u/s 44 of the MP General Sales Tax Act, 1958, whereby the following question has been referred for consideration:

Whether under the facts and circumstances of the case and in the light of Notification No. A-5-11-78(23)ST-V dated 8.10.78. The Tribunal was justified to hold that the dealer is eligible to set off @ 2.5% instead of 2%.

It is seen that for the year in question, the respondent dealer sought set off from payment of excise duty @ 2.5% instead of 2% as granted. The matter travelled upto the Board of Revenue and the Board by its detailed order passed on 10.10.1995 found that merely because the assessee has not paid tax, it cannot be said that the set off available @ 2.5% for the taxable range of 1.596 cannot be made applicable. Based on a judgment rendered by this Court in the case of New Shakti Iron & Steel Re rolling Mills v. State of M.P. [1992] 25 VKN 409, it has been held that once the dealer is exempted in accordance to the Notification of the State Government, then merely on the ground that they have not paid tax, benefit of set off to the extent of 2.5% cannot be denied. The benefit has been allowed on the set off mainly on the ground that the Notification issued granting exemption which was applicable to the dealer permits so.

In the case of New Shakti Iron & Steel Rerolling Mills (supra), similar question as is indicated in the Reference has been considered and in paragraph 7, the matter has been dealt with in the following manner:

Since the liability to pay entry tax was by virtue of the provisions of that Act and that the amount, namely 2.5% was exempted by virtue of the Notification issued u/s. 12 of the Sales Tax Act, a copy whereof has been marked as Annexure ''C'' the only payment to which the petitioner could be subjected was at the rate of the difference between the two rates, the resultant being 1.5% only. It is a matter of no consequence that the petitioner had not to pay actually by virtue of the exemption granted u/s. 10 of the Entry Tax Act any amount by way of entry tax. That means that although the petitioner would otherwise have been liable to pay entry tax under the provisions of that Act @ 2.5%, it is by virtue of the special notification issued by the State Government granting such an exemption to a class of dealers to which the petitioner belongs for a period of 5 years by virtue of incentive. When the provisions of the Sales Tax Act talk of the rate on which the purchase tax would be payable by the registered dealer as one which is prescribed under the Notification (Annexure ''C for our present purpose), it is a different matter altogether that the petitioner has not actually had to discharge the liability of payment under the E.T. Act. Taking any contrary view of the matter would render the provision with regard to incentive absolutely nugatory. Even if in spite of exemption the petitioner was liable to pay @ 4%, it would otherwise have been liable to pay @ 1.5% only under the Notification u/s. 12 of the Sales Tax Act. One cannot visualize any contingency in which such a provision for exemption is made by virtue of the special power vested in the State Government u/s 10 of the Entry Tax Act. that would, in effect, be depriving a person otherwise entitled to the benefit of Section 10 of the Entry Tax Act setting at nought the effect of the exemption u/s 10 if it were made liable to pay at the full rate to which otherwise it would have been liable to pay but for the exemption.

As the decision rendered by the Board of Revenue is based on a judgment rendered by a Division Bench of this Court, which has attained finality, we see no question of law involved warranting interference into the matter now particularly when the respondent is not being served and his whereabouts are not known.

Accordingly, the reference is rejected.