1. This application under Article 226 of the Constitution of India is at the instance of the State of West Bengal and is directed against an order dated August 6, 2010, passed by the West Bengal Taxation Tribunal in case No. R.N. No.644 of 2009 thereby setting aside the order dated July 27, 2009, passed by the Joint Commissioner of Sales Tax, Special Cell, the respondent no. 3, by which the said respondent rejected the application of the respondent No.1 for renewal of the eligibility certificate for the period of April, 06 March, 07 and April, 07 March, 08.
2. The following facts are not in dispute:
3. The respondent no. 1/company started its first production of goods in a newly set up factory at Salt Lake on 1st July, 1993 and obtained eligibility certificate under Section 10F of the Bengal Finance (Sales Tax) Act, 1941 for deferment of tax for a period of seven years. The respondent no. 1/company subsequently expanded the factory by setting up a new unit in the selfsame plot of land and the expanded factory started commercial production from 1st November, 1996.
4. The said expanded factory obtained eligibility certificate under Section 41 of the West Bengal Sales Tax Act, 1994 for deferment of tax for a period of seven years on 30th January, 1997 and subsequently, the said company set up another unit at Durgapur being the expansion of the original existing unit situated at Salt Lake and on 31st December, 1999 the respondent no. 1 got eligibility certificate for the expanded unit at Durgapur for remission of tax for a period of 15 years. The respondent no. 1/company again set up second expanded unit in the same place at Salt Lake where the original unit and the first expanded unit were in existence and from March 5, 2003 the second set up unit started commercial production.
5. On 30th April, 2003 the said second expanded unit also obtained eligibility certificate for remission of tax under Section 41 of the West Bengal Sales Tax Act, 1944 for a period of 7 years and prayed for extension of eligibility certificate from time to time and filed application for renewal of eligibility certificate for the period of 1st April, 2006 to 31st March, 2007 and 1st April, 2007 to March 31, 2008.
6. On 16th April, 2009 a show cause notice was issued upon the respondent no. 1 as to why the application for renewal of the eligibility certificate mentioned above should not be rejected on the ground that the respondent no. 1 had closed its unit nos. I and II at Salt Lake and shifted usable plant and machinery to its unit outside the State of West Bengal and the manufacturing unit No.3 at Salt Lake which was granted remission had also been closed from July, 2005.
7. According to the Joint Commissioner Sales Tax, Special Cell, if there is no existing industrial unit, there cannot be any expansion thereof and, therefore, the expanded portion at Durgapur had ceased to be the expanded portion of an existing industrial unit as defined in Rule165 (9)(c) of the WBVAT Rules, 2005 and consequently lost its entitlement to the remission under Section 118(1)(c) of the WBVAT Act, 2003.
8. The respondent no. 1 had shown cause alleging that none of the terms and conditions as prescribed in the eligibility certificate had been violated and at the time of renewal of eligibility certificate, only compliance of Rule 187(2) of the WBVAT Rules, 2005 needs to be examined by the appropriate authority. The Joint Commissioner Sales Tax, Special Cell, however, by his order dated 27th July, 2009 overruled the aforesaid contention of the respondent no. 1 and consequently, the application for renewal was dismissed.
9. Being dissatisfied, the respondent no. 1 filed an application under Section 8 of the West Bengal Taxation Tribunal Act, 1987 and by the order impugned in this application, the Tribunal has set aside the order of the Joint Commissioner and held that the respondent no. 1 was entitled to get eligibility certificate renewed for the period concerned.
10. Mrs. Roy, the learned advocate appearing on behalf of the petitioner, strenuously contended before us that the learned Tribunal below failed to consider that the State Government introduced the incentive scheme to promote industrialization in the State so that after the expiry of the incentive granted, the industrial unit can stand on its own feet. According to the Mrs. Roy, the learned Tribunal below failed to appreciate that in the absence of the original unit, there could not exist an expanded portion thereof. In other words, Mrs. Roy contended that an expanded unit could not exist independently and in isolation when the original unit has ceased to operate. She, therefore, prays for setting aside the order passed by the learned Tribunal below.
11. Mr. Bajoria, the learned senior counsel appearing on behalf of the respondent no. 1, however, has opposed the aforesaid contention advanced by Mrs. Roy and has contended that in view of Section 40 of the West Bengal Sales Tax Act, 1994, the expression existing industrial unit means an industrial unit which exists in West Bengal and manufactures goods in such unit immediately before it starts commercial production in its expanded portion on or after the appointed day and the expanded portion in relation to an existing industrial unit means the portion expanded with additional capacity on or after the appointed day with the approval of the State for manufacture of goods in West Bengal, either in its existing location or in a different area.
12. Mr. Bajoria contends that his client got the benefit by complying with that the provision of the Act and the benefit given to his client can only be taken away in case of violation of the conditions of grant of the benefit. Mr. Bajoria further contends that at the time of renewal of certificate of eligibility, the concerned officer should see whether the requirements of Rule 149 of the West Bengal Sales Tax Rules, 1995 are complied with. Mr. Bajoria further contends that the Tribunal below rightly rejected the order passed by the authority. He, therefore, prays for dismissal of the present application.
13. Therefore, the only question that arises for determination in this application is whether merely because the respondent no. 1 was compelled to close down its original unit at Salt Lake, such fact will disentitle it from exercising its right to claim remission of tax from the expanded unit. In order to appreciate the question involved herein, it will be profitable to refer to the following definitions of existing industrial unit and expanded portion as defined in Section 40 of the West Bengal Sales Tax Act, 1994, Section 41 of the Act which provides for remission of tax to new or expanded portion of existing industrial unit, Rules 146 to 151 of the West Bengal Sales Tax Rules, 1995 providing for grant of eligibility certificate and renewal thereof, the provisions of Section 118 of the West Bengal Value Added Tax Act, 2003 providing benefit of remission of tax for unexpired period of EC under the 1994 Act, the definition of existing industrial unit and expanded portion under the West Bengal Value Added Tax Rules, 2005 and Rules 177, 184-187 of the 2005 Rules providing for remission of tax and grant of EC and renewal thereof respectively and those are quoted below:
Section 40 (12)
14. Explanation. The expression existing industrial unit shall mean an industrial unit which exists in West Bengal and manufactures goods in such unit immediately before it starts commercial production in its expanded portion on or after the appointed day;
15. The expression expanded portion, in relation to an existing industrial unit, shall mean the portion expanded with additional capacity on or after the appointed day with the approval of the State Government for the manufacture of goods in West Bengal, either in its existing location or in a different area;
(Emphasis Supplied by us.)
Rule 146. Requirement of the certificate of eligibility for claiming deferment of payment of tax or remission of tax. No registered dealer shall be eligible for claiming deferment of payment of tax under subsection
(1) of section 40 or remission of tax under sub-section (1) of section 41 and the rules made thereunder unless he obtains and possesses a valid certificate of eligibility referred to in rule 148 or rule 149.
Rule 147. Manner and form of application for certificate of eligibility for deferment of payment of tax or remission of tax. A registered dealer who intends to claim deferment of payment of tax under sub-section (1) of section 40 or remission of tax under sub-section (1) of section 41, as the case may be, shall, within thirty days from the date of issue of certificate of registration granted to him under sub-section (5) of section 26 or section 27, or within thirty days from the commencement of the eligible period under rule 103, rule 116, rule 129 or rule 138, as the case may be, whichever is later, make an application in Form 23 duly filled in, signed and verified by him for a certificate of eligibility for deferment of payment of tax or remission of tax to such Deputy Commissioner, as the Commissioner may, by an order in writing, authorize in this behalf:
Provided that an application made after the period of time specified in this sub-rule may be entertained if the dealer satisfies the aforesaid authority that he had sufficient cause for not presenting his application within the specified period of time.
Rule 148. Disposal of application for certificate of eligibility for deferment of payment of tax or remission of tax. (1) If the Deputy Commissioner or the Assistant Commissioner, as the case may be, is satisfied that a registered dealer has furnished correctly all information in the application referred to in rule 147 and that such dealer has complied with the requirements of the provisions of the Act and the rules for the purpose of sub-section (1) of section 40 or sub-section (1) or section 41, as the case may be, the Deputy Commissioner or the Assistant Commissioner, as the case may be, shall grant a certificate of eligibility in Form 24 to such dealer.
(2) The certificate of eligibility granted under sub-rule (1) shall, subject to the provisions of the rules in this Chapter, be valid for a period not exceeding twelve months from the date of commencement of the eligible period referred to in rule 103, rule 116, rule 129 or rule 138, as the case may be.
(3) When the Deputy Commissioner or the Assistant Commissioner is satisfied that the information furnished in the application referred to in rule 147 is not correct and complete, or that the dealer has not complied with the requirements of the provisions of the Act and the rules as mentioned in sub-rule (1), he shall reject the application for reasons to be recorded in writing:
Provided that before such application is rejected, the dealer shall be given a reasonable opportunity of being heard.
Rule 149. Renewal of certificate of eligibility for deferment of payment of tax or remission of tax. (1) A dealer shall, within thirty days before the expiry of the validity of the certificate of eligibility granted under sub-rule (1) of rule 148, or renewed earlier this rule, make an application to the Deputy Commissioner or the Assistant Commissioner, as the case may be, for renewal of his certificate of eligibility for a further period.
(2) If the Deputy Commissioner or the Assistant Commissioner, as the case may be, is satisfied that the dealer is eligible for deferment of payment of tax under sub-section (1) of section 40 or remission of tax under sub-section (1) of section 41, as the case may be, and the rules made thereunder, he shall renew the certificate of eligibility for a period not exceeding twelve months from the date immediately following the date on which the validity of such certificate has expired.
(3) When the Deputy Commissioner or the Assistant Commissioner, as the case may be, is not satisfied that the dealer is eligible for deferment of payment of tax under sub-section (1) of section 40 or for remission of tax under sub-section (1) of section 41, as the case may be, he shall, after giving the dealer a reasonable opportunity of being heard, reject the application for renewal for reasons to be recorded in writing.
(4) If there is a change in the gross value of fixed capital assets subsequent to the issue of a certificate of eligibility, the dealer holding such certificate shall inform the Deputy Commissioner or the Assistant Commissioner, as the case may be, of such change ordinarily within one month thereafter and the authority referred to above, on being satisfied with the supporting documents, shall amend such certificate accordingly.
Rule 150. Application for deferment of payment of tax or remission of tax in lieu of capital investment subsidy. (1) A registered dealer who is eligible for further deferment of payment of tax under sub-section (5) of section 40 or remission of tax under sub-section (2) of section 41 in accordance with the provisions of rule 110, rule 123, rule 134 or rule 143, as the case may be, shall, within thirty days from the date of receipt of certificate issued by the Directorate of Industries, Government of West Bengal, in respect of his entitlement to capital investment subsidy, or within thirty days from the commencement of the eligible period under the aforesaid rules, whichever is later, make an application in Form 23 the Deputy Commissioner or the Assistant Commissioner, as the case may be, for a certificate of eligibility for such further deferment of payment of tax or remission of tax, as the case may be:
Provided that an application made after the period of time specified in this sub-rule may be entertained by the said authority if the dealer satisfies the aforesaid authority that he had sufficient cause for not presenting this application within such specified period.
(2) The application in Form 23 shall specify, inter alia, the amount of capital investment subsidy which is receivable by him.
(3) The dealer shall, while making an application under sub-rule (1), enclose with such application a xerox copy of the certificate issued by the Directorate of Industries, Government of West Bengal.
(4) The provisions of rule 148 or rule 149, as the case may be, shall, in so far as they relate to disposal of an application for certificate of eligibility or renewal thereof, apply mutatis mutandis to the application made under sub-rule (1) for deferment of payment of tax or remission of tax in lieu of capital investment subsidy.
Rule 151. Maintenance of accounts, vouchers, documents, etc. by the dealer for the purpose of deferment of payment of tax or remission of tax. (1) Any registered dealer who claims deferment of payment of tax under section 40 or remission of tax under section 41 shall maintain such vouchers or documents as may be required to prove the amount of value of fixed capital assets referred to in clause (d) of the Explanation to section 40.
(2) Subject to the provisions of section 62 and the rules made thereunder, any registered dealer who claims deferment of payment of tax under section 40 or remission of tax under section 41 shall, in addition to the vouchers or documents referred to in sub-rule (1), maintain
(a) separate accounts in respect of sales of goods manufactured in his newly set up industrial unit or in the expanded portion of his existing industrial unit,
(b) separate serially numbered bills or cash memos, delivery notes or challans in respect of sales of goods manufactured in his newly set up industrial unit or in the expanded portion of his existing industrial unit,
(c) purchase bills or cash memos in respect of purchases of goods including plant and machinery for use directly in the manufacture of goods in his newly set up industrial unit or in the expanded portion of his existing industrial unit,
(d) separate registers, for stock of goods purchases for use directly in the manufacture of goods and for stock of goods manufactured in his newly set up industrial unit or in the expanded portion of this existing industrial unit.
(3) The Deputy Commissioner or the Assistant Commissioner, as the case may be, may require a registered dealer who claims deferment of payment of tax under section 40 or remission of tax under section 41 to produce accounts, vouchers, bills, cash memos, registers and documents referred to in sub-rule (1) or sub-rule (2) and to explain to him such accounts, vouchers, bills, cash memos, registers and documents in connection with disposal of his application for a certificate of eligibility or renewal thereof or for ascertaining whether the restrictions and conditions provided in section 40 or section 41, as the case may be, and the rules made thereunder in respect of a newly set up industrial unit or an expanded portion of an existing industrial unit are satisfied.
Section 118. Measures for registered dealer holding eligibility certificate under West Bengal Sales Tax Act, 1994. Notwithstanding anything contained elsewhere in this Act,
(a) where a registered dealer has been enjoying, or has been entitled to enjoy, the benefit of deferment of tax under section 40, section 42 or section 43, as the case may be, of the West Bengal Sales Tax Act, 1994 (West Ben. Act XLIX of 1994), for a specified period or for a specified amount determined with respect to gross value of the fixed capital assets, and who would have continued to be so eligible on such appointed day under that Act had this Act not come into force, may be allowed deferment of payment of output tax payable by him under this Act by the Commissioner, for the balance un-expired period or the balance eligible amount, as the case may be, with respect to gross value of the fixed capital assets, whichever expires earlier;
(b) where a registered dealer was enjoying benefit of tax holiday under section 39 of the West Bengal Sales Tax Act, 1994, for a specified period, immediately before the appointed day and who would have continued to be so eligible on such appointed day under that Act had this Act not come into force, may be allowed such tax holiday by way of exemption of output tax payable by him under this Act by the Commissioner for the balance unexpired period or until the aggregate of the benefit of exemption from payment of tax enjoyed by such dealer under section 39 of the West Bengal Sales Tax Act, 1994, computed from first day of April, 2003, exceeds the limit of two hundred per centum of gross value of the fixed capital assets, whichever expires earlier, in such manner and subject to such terms and conditions as may be prescribed;
(c) where a registered dealer was enjoying benefit of remission of tax under section 41 of the West Bengal Sales Tax Act, 1994 (West Ben. Act XLIX of 1994), for a specified period or a specified amount determined with respect to gross value of the fixed capital assets, and who would have continued to be so eligible on such appointed day under that Act had this Act not come into force, may be allowed remission of output tax under this Act by the Commissioner for the balance unexpired period, or balance eligible amount with respect to gross value of fixed capital assets, whichever expires earlier, in such manner and subject to such terms and conditions as may be prescribed.
(2) For the purpose of clause (a), clause (b) or clause (c), a complete British Calendar month shall be considered, wherever a part of a month is involved.
(6) The output tax deferred under clause (a) of sub-section (1) of section 118 shall be paid by a registered dealer, in the manner prescribed in rule 58, into an appropriate Government Treasury after enjoying such deferment, at such intervals, in such instalments and by such dates, as prescribed in rule 172.
(7) Where the output tax payable by a dealer in respect of a year or part of a year is deferred under clause (a) of sub-section (1) of section 118 and where a loan liability equal to the amount of tax so deferred is created in the manner prescribed in rule 174 by such authority as the State Government may, by special or general order, specify, and such loan liability is admitted by such dealer in the manner prescribed in such rule for the available with the provisions of sub-section (2) of section 32 and section 31, as the case may be, in respect of the year or part of a year for which such tax is payable by, or due from, such dealer, and such deferred tax shall become due for payment under sub-rule (6), at the end of the enjoyment of such deferment of payment of tax under sub-rule (1). (8) For the contravention of any provisions of these rules, the benefit of deferment of tax under sub-rule (1) shall, subject to such conditions and restrictions as prescribed elsewhere in these rules, be discontinued even before the expiry of the available eligible period referred to in sub-rule (2). (9) For the purposes of clause (a) and clause (c) of sub-section (1) of section 118,
(a) the expression newly set up industrial unit shall mean an industrial unit which is entitled to enjoy deferment of payment of output tax under the clause (a) of sub-section (1) of section 118, or remission of output tax under the clause (c) of sub-section (1) of section 118, as the case may be, and having investment in fixed capital asset exceeding ten lakh rupees which is established and commissioned by the dealer for the manufacture of goods in West Bengal for the first time on or after the first day of May, 1995 under any scheme approved by the State Government and which is registered with the appropriate authority prescribed by the State Government for such purpose;
(b) the expression existing industrial unit shall mean an industrial unit in West Bengal which is entitled to enjoy deferment of payment of output tax under the clause (a) of sub-section (1) of section 118, or remission of output tax under the clause (c) of sub-section (1) of section 118, and manufactures goods in such unit immediately before it started commercial production in its expanded portion on or after the first day of May, 1995;
(c) the expression expanded portion in relation to an existing unit, which is entitled to enjoy deferment of payment of output tax under the clause (a) of sub-section (1) of section 118, or remission of output tax under the clause (c) of sub-section (1) of section 118, shall mean the portion expanded with additional capacity on or after the first day of May, 1995 which the approval of the State Government for the manufacture of goods in West Bengal, either in its existing location or in a different area;
Rule 177. Remission of tax payable by a newly set up industrial unit or the expanded portion of an existing industrial unit. (1) Where a registered dealer manufactures any goods, in a newly set up industrial unit established by him, or in an expanded portion of an existing industrial unit, in West Bengal, the output tax payable under the Act by such dealer who is entitled to enjoy the remission of tax under clause (c) of sub-section (1) of section 118, according to his returns referred to in sub-section (1) of section 32 in respect of sales of such goods manufactured in such unit shall, subject to sub-clause (c) of sub-section (1) of section 118 and subject to such conditions and restrictions as prescribed in these rules, continue to be remitted for the balance unexpired period.
(2) The balance unexpired period in respect of which the dealer is eligible for remission of tax under sub-rule (1) (hereinafter referred to as the available eligible period) shall commence from the appointed day and shall expire on the completion of such period:
Provided that payment of tax shall not be remitted after the amount of output tax or the aggregate of the amounts of such tax payable from the appointed day, exceeds any of the limits prescribed under sub-rule (3) at any time before the completion of the available eligible period.
(3) The amount of output tax or the aggregate of the amounts of such tax payable that the dealer is eligible for remission under clause (c) of subsection (1) of section 118 for the whole of the available eligible period shall be such balance un-expired amount of the specified percentage of the gross value of fixed capital assets which he would have continued to enjoy under section 41, section 42, or section 43 of the West Bengal Sales Tax Act, 1994 (hereinafter referred to as the previous Act) on sales of goods manufactured in such newly set up industrial unit or expanded portion of existing industrial unit, as the case may be, on the appointed day had this Act not come into force, or the amount (hereinafter referred to as the balance available amount) in rupees which remains after deducting the amount of tax that has already been remitted by him under the provisions of the previous Act, up to the day immediately preceding the appointed day, or seventy-five crore rupees, whichever is less:
Provided that where the location of a newly set up industrial unit in West Bengal or the expanded portion of an existing industrial unit in West Bengal has been changed, either in full or in part, to a place with a higher available eligible period, such newly set up industrial unit or the expanded portion of an existing industrial unit, as the case may be, shall not be entitled to such higher available eligible period for such change of location:
Provided further that where such unit has been relocated, either in full or in part, to a place with a shorter eligibility period, the total eligibility period shall be re-calculated on the basis of the period of eligibility available at the new location but under no circumstances such recalculated period shall be less than the period already enjoyed by the dealer at its old location.
(4) A registered dealer availing of the benefit of remission of tax under this rule shall, notwithstanding such remission, furnish returns as required by section 32 and the rules made thereunder.
(5) For the contravention of any provisions of these rules, the benefit or remission of tax under clause (c) of sub-section (1) of section 118 shall, subject to such conditions and restrictions as prescribed elsewhere in these rules, be discontinued even before the expiry of the available eligible period referred to in sub-rule (2).
Rule 184. Manner and form of application for the certificate of eligibility for deferment of payment of tax or remission of tax. A registered dealer holding an un-expired certificate of eligibility for deferment of payment of tax or remission of tax issued under the previous Act shall, within one hundred and twenty days from the appointed day, apply to such Senior Joint Commissioner or Joint Commissioner or Deputy Commissioner, as the Commissioner may, by an order in writing, authorise in this behalf, for fresh certificate of eligibility in Form No. 76 unless the certificate of eligibility issued under the previous Act is due to expire within two months from the appointed day, in which case, the said certificate issued under previous Act shall be deemed to be valid for the purposes of this Act and rules till the date of its expiry:
Provided that if the application in Form 76 is submitted by the registered dealer after one hundred and twenty days from the appointed day for issuing fresh certificate of eligibility, such authorised Senior Joint Commissioner or Joint Commissioner or Deputy Commissioner may, on being satisfied with the reasons for delay in submitting such application, condone the delay and accept the application for deferment of payment of tax or remission of tax.
Rule 185. Disposal of application for certificate of eligibility for deferment of payment of tax or remission of tax. If the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, is satisfied that a registered dealer has furnished correctly all information in the application referred to in rule 184, and that such dealer has complied with the requirements of the provisions of the Act and the rules for the purpose of clause (a), or clause (c), as the case may be, of sub-section (1) of section 116, and such registered dealer is eligible to enjoy the deferment of payment of tax or remission of tax under clause (a), or clause (c) section 118, the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, shall grant a certificate of eligibility in Form No. 77 to such dealer.
(2) The certificate of eligibility granted under sub-rule (1) shall, subject to the provisions of the rules in this Chapter, be valid for a period not exceeding twelve months from the appointed day.
(3) When the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner is satisfied that the information furnished in the application referred to in rule 184 is not correct and complete, or that the dealer has not complied with the requirements of the provisions of the Act and the rules as mentioned in sub-rule (1), or that the dealer is not entitled to enjoy the benefit of deferment of tax or remission of tax under clause (a), or clause (c), as the case may be, of sub-section (1) of section 118, he shall reject the application for reasons to be recorded in writing: Provided that before such application is rejected, the dealer shall be given a reasonable opportunity of being heard.
Rule 186. Renewal of certificate of eligibility for deferment of payment of tax or remission of tax and disposal of such application. (1) A dealer shall, within thirty days before the expiry of the validity of the certificate of eligibility granted under sub-rule (1) of rule 185, or renewed earlier under this rule, make an application to the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, for renewal of his certificate of eligibility for a further period.
(2) If the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, is satisfied that the dealer is eligible for deferment of payment of tax under sub-rule (1) of rule 165 or remission of tax under sub-rule (1) of rule 177, as the case may be, and the rules made thereunder, he shall renew the certificate of eligibility for a period not exceeding twelve months from the date immediately following the date on which the validity of such certificate has expired.
(3) When the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, is not satisfied that the dealer is eligible for deferment of payment of tax under sub-rule (1) of rule 165 or for remission of tax under sub-rule (1) of rule 177, as the case may be, he shall, after giving the dealer a reasonable opportunity of being heard, reject the application for renewal of the certificate of eligibility for reasons to be recorded in writing.
Rule 187. Maintenance of accounts, vouchers, documents, etc. by the dealer for the purpose of deferment of payment of tax or remission of tax. (1) Any registered dealer who claims deferment of payment of tax under clause (a) of sub-section (1) of section 118 or remission of tax under clause (c) of sub-section (1) of section 118 shall maintain such vouchers or documents as may be required to prove the amount of value of fixed capital assets referred to in clause (d) of the Explanation to rule 165.
(2) Subject to the provisions of section 63 and the rules made thereunder, any registered dealer who claims deferment of payment of tax under clause (a) of sub-section (1) of section 118 or remission of tax under clause (c) of sub-section (1) of section 118 shall, in addition to the vouchers or documents referred to in sub-rule (1), maintain (a) separate accounts in respect of sales of goods manufactured in his newly set up industrial unit or in the expanded portion of his existing industrial unit,
(b) separate specially numbered tax invoices, invoices, cash memos or bills and delivery notes or challans in respect of sales of goods manufactured in his newly set up industrial unit or in the expanded portion of his existing industrial unit,
(c) tax involves, invoices, cash memos or bills and delivery notes or challans in respect of purchases of goods including plant and machinery for use directly in the manufacture of goods in his newly set up industrial unit or in the expanded portion of his existing industrial unit,
(d) separate registers, for stock of goods purchased for use directly in the manufacture of goods and for stock of goods manufactured in his newly set up industrial unit or in the expanded portion of his existing industrial unit.
(2A) Notwithstanding anything contained in sub-rule (2), where a registered dealer who claims deferment of payment of tax under clause (a) of sub-section (1) of section 118 or remission of payment of tax under clause (c) of sub-section (1) of section 118 is unable to segregate the sales emanating from the existing industrial unit and the expanded portion of such unit, separately, when the expansion of such unit is by increasing the approved capacity or by way of production of new commodities, the tax on turnover of sales for the purpose of benefit under the said section shall be calculated by deducting the estimated tax on turnover of sales calculated on the basis of approved capacity of the existing unit from the tax on turnover of sales of both the expanded unit and the existing unit, irrespective of the actual production in the existing industrial unit. (3) The Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, may require a registered dealer who claims deferment of payment of tax or remission of tax under section 118 to produce accounts, vouchers, tax invoices, bills, cash memos, registers and documents referred to in sub-rule (1) or sub-rule (2) and to explain to him such accounts, vouchers, tax invoices, bills cash memos, registers and documents in connection with disposal of his application for a certificate of eligibility or renewal thereof or for ascertaining whether the restrictions and conditions provided in section 116 and the rules made thereunder in respect of a newly set up industrial unit or an expanded portion of an existing industrial unit are satisfied. After hearing the learned counsel for the parties and after taking into consideration, the aforesaid provisions of the relevant Acts and Rules, we are of the view that once a unit as defined as expanded unit has got the benefit of remission, its continuance depends as such upon the fact whether the said unit fulfils the conditions of eligibility or not. There is no provision in the Acts or Rules disentitling an expanded unit to the benefit of remission on the ground of closure of the original unit when the expanded unit is functioning. The benefit conferred can, however, be withdrawn if the unit which got such benefit violates any of the terms and conditions of the eligibility as mentioned in the certificate of eligibility. Similarly, the eligibility period for deferment of payment of tax shall be available only subject to fulfillment of conditions and restriction contained in Section 40 of the Act and the Rules made thereunder.
We find that the expanded unit of the respondent has not violated any of such conditions and thus, the concerned authority illegally refused renewal of the benefit and the learned Tribunal rightly restored the same.
We, therefore, find no substance in the present writ-application and the same is accordingly dismissed.
In the facts and circumstances, there will be, however, no order as to costs.