Sales Tax Appeal No. 934 of 2004. Case: BPL Soft Energy Systems Limited (Formerly Known as M/s. Bpl Pti Chemical Industries Limited), Bangalore Vs State of Karnataka. Karnataka Appellate Tribunal
| Case Number | Sales Tax Appeal No. 934 of 2004 |
| Counsel | For Appellant: Sri M. Thirumalesh, Advocate and For Respondent: Sri R.C. Yadavannavar, State Representative |
| Judges | Niazahmed S. Dafedar, DJM and P. Puttaraju, CTM |
| Issue | Karnataka Tax on Entry of Goods Act, 1979 - Section 11-A; Karnataka Sales Tax Act, 1957 - Section 8 |
| Citation | 2013 (76) KarLJ 228 |
| Judgement Date | April 26, 2013 |
| Court | Karnataka Appellate Tribunal |
Judgment:
P. Puttaraju, CTM
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This appeal is filed under Section 14(1) of the Karnataka Tax on Entry of Goods Act, 1979 (hereinafter referred as 'the Act') contesting the appeal order passed by the Joint Commissioner of Commercial Taxes (Appeals), BCD III, Bangalore (for short, 'the FAA'), in Case No. KTEG.AP.69/2003-04, dated 11th February, 2004, wherein the FAA has upheld the order of the Additional Deputy Commissioner of Commercial Taxes (Assessment-14), Bangalore dated 3-4-2003.
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The relevant facts and grounds of the appeals in brief are stated as thus:
(i) The appellant is a public limited company registered under Karnataka Sales Tax Act, 1957, Central Sales Tax Act, 1956 and Karnataka Tax on Entry of Goods Act, 1979. The appellant is previously known by the name M/s. BPL-PTI Chemical Industries Private Limited.
(ii) The appellant operates its manufacturing unit at Somanahalli, Maddur and is engaged in manufacture of dry cell batteries. These batteries are known as Dry Manganese Dioxide Batteries (for brevity 'DMD Batteries').
(iii) The appellant has approached the Government of Karnataka seeking incentives and concessions for the establishment of new industrial unit with an investment of more than Rs. 100 Crores.
(iv) Government of Karnataka has formulated new industrial policies from time to time since 1969.
(v) At the time of investment by the appellant-company, the industrial policy which was in vogue being New Industrial Policy of 1996-2001. The relevant Government order of this particular industrial policy is Government Order bearing No. CI 30 SPC 96, dated 15th March, 1996 (for brevity '1996 G.O.').
(vi) As the appellant has approached the Government with an intention of investing more than Rs. 10 Crores, the project has been considered as '(Mega Project" which are given special incentives and concessions over and above what is contemplated under the standard package of incentives and concessions in the 1996 G.O. In order to implement the said G.O. so far as tax concessions are concerned, the Government has issued notifications as under:
(A) FD 32 CSL 96(1), dated 15th November, 1996 (under KST Act, 1957).
(B) FD 32 CSL 96(II), dated 15th November, 1996 (under CST Act, 1956).
(C) For Standard package, there is no tax incentives and concessions under KTEG Act, 1979 other than for Rs. 100% EOU Units.
Since, the appellant's project was cleared as "Mega Project"" as envisaged under 1996 G.O., a special Government order war issued vide G.O. No. CI 92 SPI 97, dated 25th June, 1997 (hereinafter referred to as "Special Government Order" or "special G.O.") granting exemption from payment of sales tax under KST Act, 1957 and CST Act, 1956. In addition to this, the project being 'mega' with an investment of more than Rs. 100 Crores, additional incentive in the form of entry tax exemption was also accorded to the appellant as per Special G.O. dated 25th June, 1997. As per the Special G.O., the investment of the company should have been Rupees One hundred and eleven crores (Rs. 111 Cr.). Not only tax incentives are offered but also other concessions for infrastructure like land, power is also accorded to the appellant. This is not only for appellant's unit but also for all "Mega Projects" decided by the Government on case by case basis.
(vii) However, the appellant-company could not invest Rs. 111 Crores and thereby lost the status of mega project, since it was able to invest only Rs. 53.97 Crores. The appellant admits this fact that it could not comply with the condition stipulated in Special G.O. dated 25-6-1997. Therefore, as applicable to any other new industrial unit coming under 1996 G.O., the appellant has been accorded with standard package of incentives and concessions so far as taxes are concerned. Accordingly, the appellant-unit has been granted eligibility certificate issued by Commerce and Industries Department, Government of Karnataka vide Certificate No. IDF/E4/05/STE-BPUMDY/99-2000, dated 1-7-1999, hereinafter this certificate would be referred as Eligibility Certificate (for short, 'EC') dated 1-7-1999. This certificate is available on AA's record at page No. 121 and the first commercial invoice after the commencement of commercial production is Invoice No. 008, dated 25-6-1998. The said certificate only contemplates tax exemption under KST/CST Acts. There is no specification with respect to entry tax exemption since the appellant-unit falls under standard package of 1996 G.O.
(viii) The appellant has been assessed to entry tax by the AA by imposition of entry tax on raw materials, packing materials and plant and machinery. The amount of entry tax levied is at Rs. 33,79,247/- for the assessment year 2001-2002.
(ix) The appellant has challenged this order unsuccessfully before the FAA who has upheld the impugned order of AA negating the contentions raised by the appellant. Hence this appeal before this Tribunal.
(x) In the grounds, the appellant submits that nothing express or implied in the special G.O. dated 25-6-1997 to the effect that the appellant is not entitled to applicability of other notifications providing for exemption from entry tax and claims entry tax exemption ought to have been given by virtue of Notification No. FD 11 CET 93(3), dated 30-3-1993. The appellant relies on the decision of the judgment rendered by the Hon'ble Apex Court in case of H.C.L. Limited u Collector of Customs, New Delhi, (2001)9 SCC 83: (2001)130 ELT 405 (SC). As per the appellant Explanation II of the said notification stipulates that Industrial Units which are not eligible for applicability of the KST Notification No. FD 239 CSL 90(1), dated 19-6-1991 would not also be eligible for applicability of the said entry tax notification. Further, the appellant highlights the insertion of clause (g) to the said notification. According to the said clause (g), entry tax exemption for the...
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