Decided on July 01,1992

Begees Foods (P) Limited Respondents


- (1.)It is unnecessary to narrate the facts as they are not in dispute. The question raised by the respective parties pertain to section 18 of the Karnataka Sales Tax Act, 1957 ("the Act" for short).
(2.)The assessees are all new industrial units and there is also no dispute that they are eligible to the benefits conferred by a notification issued under section 8A of the Act. The notification is dated 15th October, 1981. The relevant para of the said notification reads thus :
(3.)In so far as they authorise the refund of sales tax on raw materials to new industries and all other Government Orders previously issued on the subject and in exercise of the powers conferred by section 8A of the Karnataka Sales Tax Act, 1957 (Karnataka Act No. 25 of 1957), the Government of Karnataka, having considered that it is necessary in the public interest so to do, hereby make a reduction of fifty per cent, with effect from 1st November, 1981, in the rate of tax or taxes payable under the said Act, on the turnover of goods manufactured and sold by all new industrial units as defined hereafter, for a period of five years from the respective date of commencement of their commercial production, subject to the following restrictions and conditions, -
(i) the total quantum of sales tax concession available to a new industrial unit during each accounting year within the aforesaid period of five years by way of reduction in the rate of tax or taxes leviable on the finished products of such unit, under this notification as also under Notification No. FD 164 CSO 79 (II) dated 16th October, 1981, granting similar concessions under the Central Sales Tax Act, 1956, shall be restricted to ten per cent of its total investment in plant and machinery at the time of commencement of its commercial production; and

(ii) The unit would, however, be permitted to carry forward the unavailed portion of the concession, if any, from year to year within the said five year period, so however that the total concession in respect of Karnataka sales tax and Central sales tax available to the unit over the entire five year period does not exceed fifty per cent of its total investment in plant and machinery at the start of commercial production."


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