Dr. Vineet Kothari, J. - (1.) THE Revenue has filed the present revision petition aggrieved against by the order of the Tax Board dated 15.01.1999 whereby, while allowing the appeal of the respondent -Assessee, the Tax Board held that the Assessee was entitled to the benefit of exemption under the Sales Tax Incentive Scheme of 1987 under the category of "Diversification" as defined in Clause (2)(g) of the said Incentive Scheme.
(2.) THE relevant observations of the learned Tax Board in the impugned order dated 15.01.1999 are reproduced herein below for ready reference: - - The present revision petition filed by the Revenue, at the earlier point of time was disposed of by a co -ordinate Bench of this Court on 15.02.2006. The said order dated 15.02.2006 passed by the coordinate Bench of this Court is also quoted herein below for ready reference: - - "SB Civil Revision Petition No. 1132/1999. Date of Order : 15th February, 2006. PRESENT HON'BLE MR. JUSTICE BHAGWATI PRASAD Mr. Sangeet Lodha for the petitioner/s. Mr. Harish Purohit for the respondents. Heard. This revision petition is filed against the order of the tax board. The question involved was whether the preparation of bags by different method is diversification or not. The tax board, on the basis of a decision given by it in the matter of M/s. Tayal Electronics, Udaipur, came to the conclusion that the unit which is though producing HDPE bags has started producing these bags by a different procedure of stitching and thus it has been held by the tax board that since the new product had a different quality, use and price, the new product which is prepared, though is a bag, yet is a product of diversification. Learned counsel for the revenue asserted that in the scheme which sanctioned, concession on diversification require that there has to be a new product. In the instant case, according to the learned counsel for the revenue, the only mode change is process of stitching. Earlier it has been from regular weaving machine but now it is by circular weaving. The raw material is same fiber of HDPE/PP granule. The raw material for production of bags is conversion of granules into fabrics and then stitching it. The raw material and the product being the same, it cannot be considered that it is a new product being produced by a different production line and thus according to the counsel for the revenue, the order of the DLSC in refusing the concession of the concerned assessee was rightly passed. The tax board has interfered without there being sufficient material on record to conclude that a different line of production has been established. It has been wrongly held that the production comes within the definition of diversification. The learned counsel for the respondent has not been able to controvert these facts that the finished product and the raw material was the same, the only change was that the ordinary stitching was converted into circular machine stitching. Such kind of change cannot, in all probability be said to be by a different new line of production. It cannot be deemed to come within the definition of diversification. The grant of concession is thus considered inappropriate and hence is set aside. The order of the DLSC is restored. The revision petition is accordingly disposed off. Sd/ - (BHAGWATI PRASAD), J."
(3.) AGGRIEVED by the order of this Court dated 15.02.2006, the Assessee took the matter further to the Hon'ble Supreme Court by way of SLP No. 21694/2006 which was later on registered as Civil Appeal No. 3759/2007 "M/s. Platic Weave Industries v. Commercial Tax Officer, Udaipur & Anr." which came to be allowed by the Hon'ble Supreme Court on 13.08.2007 setting aside the aforesaid order dated 15.02.2006 passed by the coordinate Bench of this Court and the Hon'ble Supreme Court remanded the case back to this Court for consideration and decision afresh. The order dated 13.08.2007 passed by the Hon'ble Supreme Court is also quoted herein below for ready reference: - - "IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 3759/2007 (@ SLP (c) No. 21694/2006) M/s. Plastic Weave Industries.. Appellant Versus Commercial Tax Officer, Udaipur & Anr... Respondents O R D E R Delay condoned. Leave granted. Having heard learned counsel for the parties, we are of the opinion that the requirements for determination of the question which would arise for exercise of the jurisdiction of the High Court under Section 86 of the Rajasthan Sales Tax Act, 1994 having not been followed, the impugned judgment cannot be sustained. We are, furthermore, of the opinion that in the facts and circumstances of this case the application or otherwise of the Excise Notification(s) should also be taken into consideration by the High Court while determining the question. We, therefore, set aside the impugned judgment and remit the matter to the High Court for consideration of the matter afresh. The appeal is allowed. The parties would be at liberty to bring on record the Excise Notifications. Sd/ - J. [S.B. SINHA] sd/ - J. [H.S. BEDI] New Delhi, August 13, 2007";