The Madhya Pradesh High Court granted the exemption from payment of entry tax for certificates granted under Madhya Pradesh Udyog Nivesh Samvardhan Sahayta Yojna.
The petitioner, SRF ltd. is a Company engaged in the manufacturing of technical textile, chemicals, engineering, plastics packaging films, refrigerant gases at various locations in India and overseas. It employs directly and indirectly 9000 employees and the Company has established an industrial unit at Indore, Special Economic Zone (SEZ).
The petition has been filed claiming exemption from payment of entry tax on account of the certificate granted to the petitioner under the Madhya Pradesh Udyog NiveshSamvardhanSahaytaYojna, 2004 and 2010.
The petitioner contended that under the Madhya Pradesh Udyog NiveshSamvardhanSahaytaYojna, 2004 and 2010 vide notification dated April 4, 2005, and December 13, 2010, the State has made provisions for exemption from payment of entry tax to all the industries in the State subject to certain terms and conditions. As per the notification, the eligible Companies are entitled to a 100% exemption in respect of payment of entry tax.
The Madhya Pradesh Value Added Tax Act became applicable with effect from April 1, 2006, and Section 51 of the VAT Act provides that provision of Section 5 of the Limitation Act is applicable in respect of appeals, applications, and revisions.
The petitioner was certainly having a sufficient cause for condonation of delay, as exemption certificate was granted in the year 2017 and, therefore, the stand taken by the Department in respect of the limitation has got no meaning.
The State of Madhya Pradesh has granted eligibility certificates to the petitioner for 100% exemption in respect of payment of entry tax for a total of 9 assessment years ie., 2004-05 to 2012-13 with retrospective effect i.e., w.e.f. July 23, 2004.
The division bench of Justice S.C. Sharma and Justice Shailendra Shukla observed that the respondent Department is certainly under an obligation to abide by the exemption certificates and to provide exemption in letter and spirit of the eligibility certificate.
The court held that once the exemption certificate was granted, the Department cannot take advantage of technicalities, especially when the certificate itself was granted in the year 2017 with retrospective effect.
Therefore, the court directed the respondent authorities to confer all benefits to the petitioner in terms of the Entry Tax Exemption Certificate.
The court further directed that the Department shall refund the amount recovered from the petitioner within 90 days.
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