“Taxes and levies can be imposed or collected only by authority of law and exemption, if any envisaged therein, too, can be by authority of law.”
– Jammu and Kashmir & Ladakh High Court
The Jammu and Kashmir and Ladakh High Court has recently held that no exemption can be claimed on toll and additional toll on expansion on the basis of interdepartmental communication alone and sufficient rule, circular, notification or guideline must be the basis for levying and excluding assessees from taxation.
When the claim of the petitioner for exemption from payment of additional toll on the plant and machinery imported by it for undertaking substantial expansion of the mill was not accepted, the petitioner had filed an OWP in the Court claiming, a direction to the respondents to allow the toll tax exemption to the petitioner-Mill for its expansion programme.
The writ petition was disposed of by this Court with a direction to examine the case of the petitioner in light of the request already made by the petitioner.
The Deputy Excise Commissioner, Toll Post Lakhanpur considered the entire matter and rejected the claim of the petitioner for exemption of toll tax payable on the components, plant and machinery, building material and other equipment procured from outside the State in connection with the substantial expansion programme undertaken by the petitioner.
The impugned order has been assailed by the petitioner. The writ petition is vehemently contested by the respondents. In the reply affidavit, the respondents have taken a categoric stand that the petitioner-Unit, which was registered in the year 1966 with the Department of Industries, is not entitled to any exemption from payment of additional toll on the material like plant and machinery, components and construction material imported from outside the State for undertaking its 9th substantial expansion programme.
It is further submitted by the respondents-revenue that the benefit of exemption was only for a period of one year i.e. financial year 2008-09.
It was held by the Division Bench of Justice Rajesh Sekhri and Justice Sanjeev Kumar that, “the petitioner is not entitled to the benefit of exemption of additional toll on components, plants and machinery, building material and other equipments procured from outside the State for undertaking substantial expansion of the Unit” owing to the observation that, “with a view to give effect to these promises and declarations made in the Industrial Policy, necessary statutory notifications are required to be issued by the Government under the relevant legislation”.
The writ petition filed by M/s Chenab Textile Mills was dismissed subsequently, reiterating that “No Government order or executive instructions can be a substitute for the Act of legislature or delegated legislation”.
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