SREE KADERI AMBAL MILLS LTD. Vs. SECRETARY TO GOVERNMENT, INDUSTRIES DEPARTMENT, CHENNAI AND OTHERS

JUDGEMENT

(1.) The petitioner has sought for issuance of a writ of certiorarified mandamus to quash the proceedings of the second respondent dated May 14, 2008 and to direct the first and second respondents, namely, the Government and the SIPCOT, to amend the eligibility certificate issued for Interest Free Sales Tax Deferral Scheme by fixing the base production volume and base sales volume as per the petitioner's representation dated January 10, 2008. The petitioner, who is manufacturing cotton and synthetic yarn, went in for the Interest Free Deferral Scheme for a period of nine years in respect of the expanded unit. By proceedings dated June 18, 2002, the second respondent granted the eligibility certificate, granting deferral of sales tax not exceeding Rs. 512.22 lakhs for nine years from January 1, 2001 to December 31, 2009. The repayment schedule commenced from January 1, 2010 to December 31, 2018. Paragraph 5.3 of the certificate stipulated that the petitioner would be eligible for the deferral of sales tax on the increased volume of production/sale. For the purpose of determining the increased volume of production/sale, the base figure would be the highest of the volume/production and sales in any one of the years during the last three years. Till the petitioner reached the bench mark, the petitioner would have to continue to pay the tax and the liability in excess of the production and sale specified above, would qualify for deferral. Accordingly the highest production/sales achieved by the company prior to the proposed expansion in the last three years was fixed at 50,95,084 kgs. of cotton and synthetic yarn and Rs. 3,882.23 lakhs relating to the year 1997-98. The petitioner furnished the production capacity and sales turnover for the period 1998-99 and 2000-01 and requested the second respondent to re-fix the production capacity at 41,76,554 kgs. and the sales value at Rs. 3,280.16. On August 6, 2002, the second respondent passed an order, re-scheduling the eligibility period as from June 1, 2002 to May 31, 2011 and the sales tax benefit for the period January 1, 2010 to May 31, 2011 shall be restricted to actual sales tax remitted during the period January 1, 2001 to May 31, 2002.

(2.) It is seen from the papers filed before this court that the petitioner made further representations on January 27, 2004, March 5, 2004 and April 24, 2004, requesting amendment of the base production volume. However, the second respondent rejected the same in its proceedings dated May 5, 2004, citing G.O. Ms. No. 119, Commercial Taxes and Religious Endowment Department dated April 13, 1994, that the base production volume cannot be amended.

(3.) The representations of the petitioner reveal that the petitioner sought for an exclusion of the export turnover as well as the turnover relating to the consignment turnover to be excluded from the sales turnover, so that the benefit of fixing the sales turnover is restricted to the actual taxable turnover.