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Southern Agrifurane Industries Ltd vs Commercial Tax Officer & Ors on 8 February, 2005 cites

Strawboard Manufacturing Co., Ltd vs Gutta Mill Workers' Union.The State Of ... on 17 December, 1952

The High Court had rejected this submission of the appellant by holding that the first notification did not grant an unlimited tax deferral and that the amendment notification merely clarified that the deferral was not limited to Rs.623 lakhs but was upto Rs.1,246 lakhs. Therefore there was no question of the amendment notification operating retrospectively. On the assumption that the amendment did operate retrospectively, the High Court held that by virtue of Section 15 of the Tamil Nadu General Clauses Act, the State Government had the power to deny the benefit of deferral granted retrospectively. The appellant submits that the view expressed by the High Court was contrary to the well established principles laid down in several decisions of this Court including Strawboard Manufacturing Co. v. Gutta Mill Workers Union AIR 1953 SC 95 and Kazi Lhendup Dorji V. Bureau of Investigation 1994 Supp (2) SCC 116. In addition, the appellant submits that the Scheme framed by BIFR also did not lay down any ceiling on the quantum of deferral of the sales tax. It is submitted that the scheme was a statutory one and binding on the State Government under the provisions of Sections 18(1), (4) (8) read with Section 19(3) and Section 32 of SICA. According to learned counsel for the respondents, neither the Scheme nor the first notification had granted an unlimited sales tax deferral as claimed by the appellant. The original scheme envisaged a deferment of sales tax of 6 crores 23 lakhs. This limit was subsequently raised to Rs. 1246 lakhs at the request of the appellant and on the recommendation of the IDBI. There was as such no question of retrospective operation of the amendment notification nor violation of any scheme sanctioned by the BIFR. In any event, it is submitted that Section 15 of the Tamil Nadu General Sales Tax Act, 1959 would apply to Section 17A permitting the State Government to undo what it may have the power to do under that Section. It is also submitted that the appellant had collected the entire sales tax from its customers for the period 1.10.93 to 30.9.94. It was entitled to the deferment of the sales tax only to the extent it was required to meet the cost of rehabilitation as sanctioned by the BIFR. It is further submitted that the appellant in any event, on its own accord, sought release from the provisions of the SICA and at least from the period subsequent to such release, it should have cleared all outstanding tax liability immediately.
Supreme Court of India Cites 14 - Cited by 60 - Full Document
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