Patna High Court
Case Details
IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.4269 of 2011 ====================================================== 1. M/S Kanishka Carbons Pvt. Ltd. A Company Incorporated Under The Provisions Of The Companies Act, 1956 Having Its Registered Offfice Situated At N.H. 31, Papraur, P.S. + P.O. + Dist. Begusarai Through One Of Its Director, Binod Kumar Hisariya Son Of Late Shiv Pratap Hisariya .... .... Petitioner/s Versus 1. The State Of Bihar through the Principal Secretary Industries, Govt. Of Bihar 2. Commissioner of Commercial Taxes, Bihar, Patna (CCT) 3. Dy. Commissioner of Commercial Taxes, Begusarai Circle, Begusarai 4. Asstt. Commissioner of Commercial Taxes, Begusarai (CTO) 5. The Commercial Taxes Officer, Begusarai .... .... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Purnendu Singh For the Respondent/s : Mr. Lalit Kishor, PAAG Mr Piyush Lal, AC to PAAG ====================================================== CORAM: HONOURABLE MR. JUSTICE AJAY KUMAR TRIPATHI ORAL ORDER 12 02-08-2013 Petitioner is a company duly incorporated under the Companies Act having its registered office at NH 31 in the district of Begusarai. They are before the High Court because according to them the government functionaries are not willing to give them the concession or the benefit of a notification no. S.O. 146 dated 12.10.2006. The notification grants benefit of Central Sales Tax, which is required to be charged at the rate of 1 per cent instead of 4%. The basis for looking for such benefit or concession is the provision contained in sub- clause (xiii) of Clause 2 of the Industrial Incentive Policy of the State of Bihar, notified in the
Legal Reasoning
Patna High Court CWJC No.4269 of 2011 (12) dt.02-08-2013 2/6 year 2006. At the outset, the Court has no difficulty in affirming and holding that the Industrial Incentive Policy notified by the State of Bihar has statutory value as has been held by the Hon’ble Apex Court, years ago. The promise made in the Industrial Policy by way of concession to industrial units is binding and obligatory upon the State authorities across the board, who are involved in extending benefits or concession, promised under the policy. In the present case, the dispute has arisen because the Industrial Policy of 2006 was notified on 15.7.2006, though effective from 1.4.2006 and the exemption granted by the Sales Tax Department for the CST has been notified only on 12.10.2006. With these variable dates of notifications, there is bound to be dispute as to the date on which the benefits will start accruing in favour of a unit or an industry, which have been promised concession under the Industrial Policy. In the normal course of things, which will also be reflective of good governance and decision making, all notifications which are required to be issued under various Acts by various Departments must be synchronized with the date of the notification of the Industrial Policy. Whatever homework is required to be done by the various limbs of the State ought to be Patna High Court CWJC No.4269 of 2011 (12) dt.02-08-2013 3/6 done prior to the issuance of the notification so that there is no disconnect and all benefits are harmonized from the date the Industrial Policy is notified. The Court only hopes and expects that in future the State of Bihar will take this into consideration whenever Industrial Policies are going to be notified. The basic facts are not in dispute. The Industrial Policy was notified with effect from 15.7.2006 which included grant of concession under the Central Sales Tax from 4 per cent to 1 per cent. The notification by the Sales Tax Department, however, lowering the CST from 4 per cent to 1 per cent, was issued only on 12.10.2006, meaning thereby that prior to the said notification even though the promise was made in the Industrial Policy to grant benefit of concession of CST by reducing it from 4 per cent to 1 per cent, the actual benefit proved to be illusive till the notification by the Commercial Taxes Department came into place on 12.10.2006. Obviously, the benefit, which was promised under the Industrial Policy, remained illusive till 12.10.2006 despite giving a window of hope to the petitioner to look for the benefit or concession of CST which though arose from the date of applicability of the Industrial policy but would only accrue from 11.10.2006, which has become the period of dispute. According to the petitioner, there should be assessment Patna High Court CWJC No.4269 of 2011 (12) dt.02-08-2013 4/6 on the basis of form ‘C’, tendered to the assessing authority showing collection of 1% CST from the buyers of the product of the petitioner and any demand on the basis of 4 per cent CST would be violative of the Industrial Policy as well as the promise made by the State Government in this regard. Learned Principal AAG, however, contends that there is always some time gap between the decision taken by the State, in its implementation. No doubt, such a situation does exist but it ought to be avoided with the object of preventing any dispute and litigations of such kind which may be bonafide or may even be wagering. However, government will keep in mind in future decision making that there is no disconnect. So far as the present case is concerned, no case is made out for the benefit, which is being claimed by the petitioner on the given facts, admitted between the parties to a substantive extent. According to learned Additional Advocate General, there is adequate evidence available with the assessing authority that the petitioner was collecting Central Sales Tax from the purchasers at the rate of 4 per cent. Once he has collected the CST at the rate of 4 per cent, the whole game or ploy in the present writ application, in the garb of looking for benefit under the Industrial Patna High Court CWJC No.4269 of 2011 (12) dt.02-08-2013 5/6 Policy, is to illegally retain the collected tax and pay only 1% tax to the State exchequer under CST. If the findings by the assessing authority is that the petitioner had collected Central Sales Tax at the rate of 4 per cent, his revised return with Form C showing that he had collected only 1 per cent is not acceptable on the face value. The findings being what they are by the assessing authority, which has not been established to be otherwise in the writ application, the Court will, therefore, tilt against the petitioner in favour of the State by holding that the benefit of the Industrial Policy in the given facts to assess the petitioner on the basis of 1 per cent of Central Sales Tax would be an unfair prayer to make.. Learned Additional Advocate General seems to be correct in taking a stand that there would be no occasion for any seller of goods to collect tax at any other rate contrary to the prevalent notified rate which is in place, because any under collection on behalf of seller would create a liability upon him, to make good the difference in the rate collected and what is required to be paid to the State exchequer. Since there is evidence that this was not done but is an effort now to show that it has been done, which cannot be established from the records, the concession and the benefit of the Industrial Policy cannot accrue to the petitioner when he had already collected Central Sales Tax at the rate of 4 Patna High Court CWJC No.4269 of 2011 (12) dt.02-08-2013 6/6 per cent till the notification reducing the same to 1 per cent was issued by the State Government on 12.10.2006. There is no occasion to interfere, with the assessment orders. The present dispute is only a camouflage under the garb of the Industrial policy with the object of negating the assessment order. Writ has no merit in the given facts and is dismissed. It is made clear that present writ has been decided on the basis of interpretation, which was required to be given to the industrial Policy and this will not have a reflection if the petitioner wants to assail the order of assessment or the appellate order on merit, passed by the assessing authority or the appellate authority. If the petitioner wants to assail the same as it is another cause of action altogether and is governed by another set of law and rules. (Ajay Kumar Tripathi, J) sk