- (1.) By these two writ petitions, the petitioners have challenged the clarification issued by the Finance Department (Tax Division) of Government of Rajasthan on 10.10.2008 whereby the State Government issued clarification that the term "tax payable" under the Rajasthan Value Added Tax Act, 2003 is the amount of tax leviable under the Act less the amount of input tax credit if any for the purpose of the Scheme. The Scheme in question is Rajasthan Investment Promotion Policy, 2003 which was issued by the State Government on 20.8.2003 with a view to provide the investors an attractive opportunity to invest in the State of Rajasthan and certain incentives in the form of subsidy was directed to be paid to the eligible units. The facts illustratively are taken from SBCWP
(2.) Clause 7 of the Rajasthan Investment Promotion Policy, 2003 (RIPS 2003, for short) provides that in case of new investment made, the sum total of interest subsidy and wage/employment subsidy would be subject to a maximum limit of fifty percent of the tax payable and deposited under the Rajasthan Sales Tax Act, 1994, the Central Sales Tax Act, 1956 and Value Added Tax Act as and when introduced in the State. The Rajasthan VAT Act, 2003 was enforced w.e.f. 1.4.2006 during the operative period of RIPS, 2003, which was extended upto 31.3.2011. Clause 7(i)(a) of the Scheme reads as under: "7. SUBSIDIES (i)(a) the sum total of interest subsidy and wage/employment subsidy would be subject to a maximum limit of fifty percent of the tax payable and deposited under the Rajasthan Sales Tax Act, 1994, the Central Sales Tax Act, 1956 and Value Added Tax Act as and when introduced in the State." 2. The impugned clarification issued by the Tax Division of the Finance Department of Government of Rajasthan on 10.10.2008 is also reproduced hereunder in extenso for ready reference: "GOVERNMENT OF RAJASTHAN FINANCE DEPARTMENT (TAX DIVISION) No.F.4(18)FD/Tax.Div./2001 Jaipur dated 10.10.2008 The Government launched the Rajasthan Investment Promotion Scheme, 2003 vide this Department's order No. F.4(18) FD/Tax-Div./2001 dated 28.7.2003 (amended from time to time) hereianfter referred to as 'the Scheme'. It has been brought to the notice of the Government by Commercial Tax Department that there are some issues which need interpretation of certain clauses of the Scheme. After examination of the issues, to bring in more clarity the issues are clarified under clause 11 of the Scheme, as under:- CLARIFICATIONS 1. Regarding periodicity for computation of subsidy under the Scheme, it is clarified that computation of subsidy under the Scheme shall be made on quarterly basis after submission of return for the quarter along with proof of deposit of tax. It is further clarified that subsidy under clause 7 is allowable after deposit of the tax. 2. The term 'year', occurring in the scheme, mean financial year. 3. The term 'tax payable' under the Rajasthan Value Added Tax Act, 2003, is the amount of tax leviable under the Act less the amount of input tax credit, if any, for the purpose of the Scheme. 4. Under Incentive Schemes of 1987, 1989, and 1998 the goods manufactured by such units are not exempted but the units are exempted from payment of tax under the Rajasthan Sales Tax Act, 1954 and the Rajasthan Sales Tax Act, 1994. As such 'Tax payable' by such units is the amount of tax leviable on the taxable turnover. 5. In case of the unit availing benefit of deferment of tax, part of tax payable is deposited by the unit and part of it is deferred for stipulated period which is paid later on in installments. In such cases it is clarified that the amount of subsidy shall be divided in proportion to the tax payable under sub-section (1) of section 20 of RVAT Act, 2003 and the amount of tax deferred under sub- section (3) of section 20 of RVAT Act, 2003. The proportionate amount of subsidy shall be allowed against the tax payable under sub-section (1) of section 20 of RVAT Act, 2003 on the basis of quarterly returns. The proportionate amount of subsidy shall be allowed at the time of deposit amount of deferred tax sub- section (3) of section 20 of RVAT Act, 2003. 6. Where the unit is engaged in trading of goods, other than the goods manufactured by it, subsidy is allowable only on the amount of tax payable on the sale of goods manufactured by such unit. By order Sd/- (Aditya Pareek) Deputy Secretary to Government"
(3.) The grievance raised in the present writ petition is that the said clarification issued by the State Government on 10.10.2008 is contrary to the provisions of RIPS, 2003 as well as Rajasthan VAT Act, 2003 which does not define as such the term "tax payable" as such.;