S.S. Sulphonators vs Secretary, State of Madhya Pradesh

This order will govern the disposal of W.P. No. 4687 of 2010 and W.P. No. 4688 of 2010 since both the writ petitions involve the same issue on similar fact-situation. The petitioners are claiming tax exemption under the exemption notification dated October 6, 1994.

According to the petitioners, they fulfil the conditions of the exemption Notification No. A-3-24-94-ST-V(108) dated October 6, 1994 issued by the State exercising the powers u/s 12 of the Madhya Pradesh General Sales Tax Act and u/s 8(5) of the Central Sales Tax Act, 1956. The said notification was subsequently amended, vide Notification No. A-3-74-99-ST-V(48) dated June 9, 2000 providing the cut-off date of December 31, 1999 thereby adversely affecting the exemption claim of the petitioners. The petitioners had made applications for grant of eligibility certificate under the exemption notification, which were rejected by the District Level Committee on the ground that the petitioners did not take effective steps within the cut-off date as per the notification dated June 9, 2000. The said decision was communicated by respondent No. 2, vide letter dated October 5, 2001 to the petitioner in W.P. No. 4687 of 2010 and vide letter dated December 22, 2001 in W.P. No. 4688 of 2010. In the earlier round of litigation the Division Bench of this court by order dated September 11, 2003 had disposed of W.P. No. 3600 of 2002 and W.P. No. 3532 of 2002 filed by the present petitioners, respectively, along with the other connected writ petition directing the respondents to examine the petitioner''s case in the light of earlier notification, but thereafter the petitioner''s case was not examined, instead the assessments were done and tax liability was created denying the exemption, therefore, they filed the present writ petitions.

The respondents have filed their reply taking the stand that the cases of the petitioners were considered and rejected by the State Level Committee. No order of the State Level Committee was enclosed with the reply, therefore the respondents were asked to clarify the said stand contained in paragraph 8 of the reply. The respondents filed additional reply stating that word "State" in the main reply was mentioned due to inadvertence and that the petitioner''s case was considered and rejected by District Level Committee in its meeting dated September 21, 2001 (in W.P. No. 4687 of 2010) and dated November 28, 2001 (in W.P. No. 4688 of 2010), and the petitioners were communicated the said decision on October 5, 2001 (in W.P. No. 4687 of 2010) and on December 22, 2001 (in W.P. No. 4688 of 2010). The stand of the State is that since the petitioners'' cases have been considered and rejected, therefore, they are not entitled for any relief.

We have heard the learned counsel for the parties and minutely perused the record.

In the earlier round of litigation, the W.P. No. 3600 of 2002 and W.P. No. 3532 of 2002 filed by the petitioners were disposed of by the Division Bench of this court by the common order dated September 11, 2003 by issuing the following direction:

Without getting into the constitutional validity of the notification a suggestion was given by the court to the learned counsel for the parties, if the petitioner has actually taken effective steps in pursuance of the notification dated October 6, 1994 and is covered from all quarters and angles should be given benefit or not. The learned Government Advocate for the State has clearly stated, as a special case, this can be given, but the petitioner has to prove strictly that he is covered essentially and effectively by the earlier notification.

We have been apprised at the Bar that assessment proceedings in some cases are in progress. The notification pertains to tax exemption. If the petitioner-assessee can suitably satisfy the assessing officer that his case is covered by the earlier notification, the benefit shall accrue in his favour.

With the aforesaid observation and direction, the writ petitions stand disposed of without any order as to costs.

MCC No. 329 of 2006 preferred by the State for modification of the aforesaid order was dismissed by the Division Bench by the order dated July 14, 2006. The SLP against the said order has also been dismissed by the Supreme Court by the order dated July 18, 2008 keeping the question of law open.

The respondent/State was required to comply with the aforesaid direction issued by the Division Bench of this court in the earlier round of litigation. There is nothing on record to indicate that after the order of the Division Bench, the District Level Committee has examined the petitioner''s case in the light of the aforesaid order of the Division Bench. The order of the District Level Committee referred above and relied upon by the State was issued prior to the order of the Division Bench of this court, therefore, they had lost their relevance after the direction was issued by the Division Bench of this court. Even otherwise by the earlier orders the claim of the petitioners was rejected on the ground that the petitioners did not fulfil the condition of taking effective steps prior to December 31, 1999 in terms of the amendment in the notification incorporated on June 9, 2000, whereas in terms of the Division Bench order the respondents have to examine if the petitioners are covered essentially and effectively by the earlier notification.

Counsel for the respondents has placed reliance upon the Division Bench judgment in the matter of D.J. Laboratories Pvt. Ltd., Bimla Steel Industry and Pithampur Oxygen Pvt. Ltd. Vs. State of Madhya Pradesh and Others, whereby the constitutional validity of the amendment notification dated June 9, 2000 has been upheld but the said judgment does not help the respondent in the present case in view of the earlier order of the Division Bench in respect of the present petitioners.

In view of the aforesaid, the present writ petition is allowed with the direction to the respondents to re-examine the petitioners'' case in the light of the direction earlier issued by the Division Bench of this court in W.P. No. 3600 of 2002. Let this exercise be completed by giving an opportunity of hearing to the petitioners within three months from the date of receipt of copy of this order. If the petitioners are found eligible, necessary benefit be extended to them. If the respondents find that the petitioners are not entitled to exemption, they will pass a reasoned speaking order and will duly communicate the same to the petitioners.

The writ petitions are accordingly disposed of. Let a copy of this order be placed in the record of W.P. No. 4688 of 2010.