DB holds Dujodwala Resins entitled to refund of Sales Tax

Excelsior Correspondent

SRINAGAR, Dec 12: Division Bench of State High Court comprising Justice Ali Mohammad Magrey and Justice B S Walia has held M/s Dujodwala Resins and Terpenes Limited entitled to refund of State Sales Tax paid by it on purchase of raw material from the State Forest Department.
The order was passed in a petition filed by M/s Dujodwala Resins and Terpenes Ltd challenging denial of refund of Sales Tax paid by it in terms of Government Order No.159-Ind of 1971 dated March 26, 1971 read with Government Order No.414-Ind of 1971 dated August 25, 1971.
After hearing Senior Advocates M A Goni and R K Gupta for the petitioners and Government Advocate M A Bhat, the Division Bench comprising Justice Ali Mohammad Magrey and Justice B S Walia observed, “after considering all the aspects, we hold the petitioner company entitled, in terms of Government Orders of 1971, to refund of State Sales Tax paid by it on purchase of raw material of resin for its first three industrial units each for a period of five years commencing from the dates these units respectively, after being set up, started lifting the raw material from the State Forest Department for being utilized for manufacturing activity”.
“Consequently, the Government Order No.43-Ind of 2006 dated February 24, 2006 is held to be unsustainable in the eyes of law and therefore liable to be quashed”, the DB further said, adding “in so far as Government Order No.54-Ind of 1983 dated February 26, 1983, the Notification SRO 86 dated March 12, 1984 and Government Order No.81-Ind of 1984 dated March 12, 1984 are concerned, it is held that the same don’t impact the right of the petitioner company to claim the incentive in question under the two 1971 Government orders”.
Accordingly, the DB held the petitioner company entitled to the refund of the Sales Tax paid by it on the purchase of raw material in respect of its first three industrial units for initial five years of production from the respective dates the petitioner company started lifting/purchasing raw material/resign.
While referring to the decision of the Supreme Court in case titled M/s Pine Chemicals Ltd Versus Assessing Authority, the DB said, “it would be suffice to say that the issue before the Supreme Court was not whether an industrial unit as may be set up in future post Government Order No.54-Ind of 1983 would be entitled to claim the benefits under Government order of 1971. The case before the Supreme Court pertained to the industrial units which had been set up after the two Government orders of 1971, were existing as on the date of issue of Government order of 1983 and had not yet fully availed the incentive provided under the 1971 Government orders”.
“Moreover, in its judgment, the Supreme Court nowhere said that the industrial units as may be set up in future after the Government of 1983 would also be entitled to claim the benefits in question”, the DB said.

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