Case Note & Summary
The petitioner, Mahindra & Mahindra Limited, a company engaged in the manufacture and sale of automobiles and spare parts, filed a writ petition before the High Court of Judicature at Bombay challenging the assessment order dated 31st March 2016 passed by the Deputy Commissioner of Sales Tax, Nashik Division, under Section 9(2) of the Central Sales Tax Act, 1956 read with Section 25 of the Maharashtra Value Added Tax Act, 2002, for the assessment year 2006-2007. The petitioner alleged that the order was passed without jurisdiction and contrary to settled principles of law. The dispute pertained to the availability of sales tax incentives under the Package Scheme of Incentives, 1993, introduced by the State Government to promote industrial dispersal. The petitioner, having undertaken expansion/diversification, claimed that the incentives should be available on the entire turnover, whereas the assessing authority restricted the incentives proportionately based on the ratio of expansion capacity or investment. The petitioner invoked the writ jurisdiction seeking to quash the assessment order and its retrospective effect. The court heard the parties on 20th February 2018 and reserved judgment, which was pronounced on 14th August 2018.
Issue of Consideration
Whether the Deputy Commissioner of Sales Tax had jurisdiction to pass the assessment order dated 31.03.2016 under Section 9(2) of the Central Sales Tax Act, 1956 read with Section 25 of the MVAT Act, 2002, and whether the sales tax incentives under the Package Scheme of Incentives, 1993 can be restricted proportionately for expansion units
Law Points
- Proportionate incentives
- sales tax exemption/deferral
- Package Scheme of Incentives
- 1993
- expansion/diversification
- Section 41BB Bombay Sales Tax Act
- Section 8(4) MVAT Act
- eligibility certificate
- gross fixed capital investment
Case Details
2018 LawText (BOM) (08) 77
WRIT PETITION NO.12328 OF 2016
S.C. Dharmadhikari and Bharati H. Dangre
Mr. P.C. Joshi i/b Mr. Rajan Umesh Chandra Mishra and Mr. Vaibhav Prakash Patankar for the Petitioner; Mr. Sonpal, Special Counsel along with Mr. B.V. Samant, AGP for Respondent Nos. 1 and 2-State
Mahindra & Mahindra Limited
State of Maharashtra through the Secretary Ministry of Finance and the Deputy Commissioner of Sales Tax, Nashik Division
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging a sales tax assessment order
Remedy Sought
Quashing and setting aside the assessment order dated 31st March 2016 passed by the Deputy Commissioner of Sales Tax under Section 9(2) of the Central Sales Tax Act, 1956 read with Section 25 of the MVAT Act, 2002, and its retrospective effect
Filing Reason
The assessment order restricted sales tax incentives proportionately for expansion/diversification, which the petitioner alleged was without jurisdiction and contrary to the terms of the Package Scheme of Incentives, 1993 and settled law
Issues
Whether the impugned assessment order dated 31.03.2016 is without jurisdiction?
Whether sales tax incentives under the Package Scheme of Incentives, 1993 for expansion/diversification can be restricted proportionately based on expansion capacity or investment?
Judgment Excerpts
The petitioner, a company incorporated under the Companies Act, engaged in the manufacture and sale/resale of automobiles and spareparts has invoked the writ jurisdiction of this Hon'ble Court praying for quashing and setting aside the order dated 31st March 2016 passed by the Deputy Commissioner of Sales Tax, Nashik Division under Section 9(2) of the Central Sales Tax Act, 1956 read with Section 25 of the Maharashtra Value Added Tax Act, 2002 (for short 'MVAT Act') for the assessment year 20062007.
The existing regime of the Bombay Sales Tax Act, 1959, empowered the State Government under Section 41 to grant Tax exemption either in full or in part in public interest. The Package Scheme of Incentives are a reflection of the exercise of said powers conferred on the State Government.
The Package Scheme of Incentives of 1988 was succeeded by a scheme of 1993 and the object of this scheme was to achieve a dispersal of industries outside BombayThanePune belt and attract them to the underdeveloped and developing areas of the State...
Section 41BB came to be introduced on 27.03.2001 by Maharashtra Act No.22 of 2001...
Procedural History
The writ petition was filed in 2016. The court heard the parties on 20th February 2018 and reserved judgment. The judgment was pronounced on 14th August 2018.
Acts & Sections
- Central Sales Tax Act, 1956: Section 9(2)
- Maharashtra Value Added Tax Act, 2002: Section 25, Section 8(4), Section 16, Section 88
- Bombay Sales Tax Act, 1959: Section 41, Section 41BB, Section 41BA
