Shakti Arora Exports Pvt. Ltd. vs State of Maharashtra

At the instance of the applicant-assessee the Maharashtra Sales Tax Tribunal has referred the following questions for the opinion of this court:

(i) Whether, on the facts and under the circumstances of the case, the Tribunal was justified in holding that while calculating notional sales tax liability as defined in the Package Scheme of Incentives, 1983, the purchases on form BC are to be considered for calculating N.S.T.L. as purchase tax at four per cent ?

(ii) Whether, on the facts and under the circumstances of the case and upon true and correct interpretation of entry 136 of the notification issued under the provisions of law as also of the terms of the Package Scheme of Incentives, 1983, the Tribunal was correct in holding that while calculating N.S.T.L. as defined in the package scheme of incentives, the turnover tax was required to be added ?

(iii) Whether upon a correct interpretation of section 15-1A, the Tribunal was justified in holding that additional tax was exigible on the sale of goods covered by entry 18 of Schedule C, Part I ?

(iv) Whether, on the facts and under the circumstances of the case and upon true and correct interpretation of rule 42AC, the Package Scheme of Incentives, 1983 and definition of N.S.T.L. in the said scheme the set-off under rule 42AC was required to be added as benefit enjoyed by the applicant ?

As regards the questions (i), (ii) and (iv) are concerned, counsel for the parties states that the said questions stand concluded in favour of the assessee and against the Revenue by the decision of this court in the case of Prasad Power Control Pvt. Limited, a Private Limited Company and Shri B.P. Yadav of Mumbai and a Director of Petitioner No. 1 Vs. Commissioner of Sales Tax and Others, (Writ Petition No. 842 of 2000) decided on June 8, 2011. Accordingly, questions (i), (ii) and (iv) are answered in favour of the assessee and against the Revenue.

As regards the question (iii) is concerned, the assessing officer in the assessment order dated March 31, 1992 has held that in computing the additional tax u/s 15-1A of the Bombay Sales Tax Act, 1959, the sales tax payable on certain sales shall be taken into consideration.

On appeal filed by the assessee, the Assistant Commissioner (Appeals) by his order dated March 27, 1997, held that since the sales in question were goods covered under entry 18 of Schedule C Part I, the said sales were outside the purview of section 15-1A as it stood prior to its deletion with effect from October 1, 1995 and hence, no additional tax would be leviable on such sales. Although no appeal was filed by the Revenue against the aforesaid decision, in the appeal filed by the assessee on some other issues, the Tribunal by its order dated October 5, 2002, held that since the assessee was covered by 1983 Package Scheme of Incentives and got the benefit under notification issued u/s 41 of the Bombay Sales Tax Act, the additional tax would be leviable on the sales effected by the assessee. At the instance of the applicant-assessee the aforesaid question is referred by the Tribunal for the opinion of this court.

It is not in dispute that the sales in question are goods covered under entry 18, Part I, Schedule C. The second proviso to section 15-1A specifically provides that in calculating the additional tax payable by the dealer, the tax payable on sales covered by entry 18, Part I, Schedule C shall not be taken into consideration. Therefore, the Tribunal committed an error in including the sales covered under entry 18, Part I, Schedule C, while computing the additional tax payable u/s 15-1A of the Bombay Sales Tax Act. In this view of the matter, question (iii) is answered in favour of the assessee and against the Revenue. Reference is disposed of in the above terms with no order as to costs.