EISHER MOTORS LTD Vs. STATE OF M P

JUDGEMENT

(1.) THIS petition under Article 226 of the Constitution of India is directed against the reassessment order dated 30-4-1991 (Annexure H) passed by the respondent No. 3. Necessary facts shortly are as under :

(2.) M/s. Eisher Motor Limited is a Public Limited Company. Petitioner has set up an industrial unit in Pithampur for manufacture of Light Commercial Vehicle ('lcv for short) of different types for carriage of goods or passengers. Petitioner is a registered dealer both under M. P. General Sales Tax Act, 1958 (hereinafter referred to as 'act of 1958' for short) and Central Sales Tax Act, 1956 (hereinafter referred to as 'act of 1956' for short ). Case of the petitioner is that in order to fillip industrial growth, State Government exercising powers conferred by Section 12 of the Act of 1958 issued the Notification dated 23-10-1981. Similar Notification dated 29-6-1982 was issued under the Act of 1956. According these notification incentives in the shape of exemption from payment of tax were provided to registered dealers who had set up industry in the District as mentioned in the schedule and had commenced production from the date specified in the notifications, subject to fulfillment of other terms and conditions as mention the notifications. Pithampur is located in District Dhar which falls under "c" category of Part II of the Notifications. It is alleged that petitioner fulfilled required terms and conditions mentioned the two notifications, therefore it applied for grant of eligibility certificate in order to claim exemption from payment of tax. Respondents duly processed the application submitted by petitioner-company and after satisfying they issued the eligibility certificate on 16-8-1988 (Annexure C) exempting petitioner from payment of sales tax. As per the eligibility certificate, raw material as mentioned in the registration certificate was also exempted from payment of tax. For the period from 14-10-1986 to 30-4-1987, turnover of the petitioner was assessed under the provisions of Act of 1956. Assessing officer from the returns filed by the petitioner found that the total taxable turnover was Rs. 44,55,252/ -. While determining the taxable turnover, assessing authority allowed exemption/deduction of Rs. 15,80,10,349/- as it pertained to inter-State sales LCV in view of the eligibility certificate issued in favour of petitioner company. The assessment order was passed on 29-12-1989. Subsequent to passing of the assessment order, petitioner was served with a notice to show cause why the assessment order be not open on the ground that exemption/deduction was wrongly made and turnover of Rs. 15,80,10,349/- had escaped assessment from tax. Show-cause notice was issued by the same authority who had passed the earlier assessment order, i. e. , Assistant Commissioner. Petitioner submitted detailed reply raising various objections against the reopening of assessment. The Assistant Commissioner overruled objections holding that petitioner did not manufacture LCV at Pithampur as it imported the fabricated bodies to be fitted on the chaises manufactured at Pithampur to make the complete LCV. Thus, Assistant Commissioner raised additional demand of tax by the order impugned. It is, against this order present writ petition has been filed.

(3.) AFTER notice, respondents filed reply and submitted that after the assessment order was passed, it was noticed that certain items not manufactured by petitioner were wrongly exempted from payment of tax and in view of provisions contained in Section 19 of Act of 1958 read with Section 9 (2) of the Act of 1956 the Assistant Commissioner was perfectly justified in reopening of earlier order of assessment.