ASTHA TEXTILES COMPANY LTD. Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) AGGRIEVED by the revisional orders passed by the Deputy Commissioner (CT), Hyderabad Division, Hyderabad in R.R. No. 72/2002 -03, dated 21 -8 -2002 for the assessment years 1998 -99, the appeal has been preferred. The appellant in the above appeal is M/s. Astha Textiles Company Limited, Kattedan, Hyderabad. It deals in manufacture of Double P.V. Yarn. It is on the rolls of Commercial Tax Officer, Rajendranagar Circle. For the assessment year 1998 -99, the Commercial Tax officer, Nampally Circle passed assessment orders granting exemption of sales tax in pursuance of final eligibility certificate issued in favour of the assessee under G.O. Ms. No. 117, Industries & Commerce (IFR) Department, dated 17 -3 -1993.

(2.) THE Deputy Commissioner (CT), Punjagutta Division, Hyderabad on scrutiny of the assessment records observed and found that Sales Tax Holiday exemption was wrongly granted by the Commercial Tax Officer in favour of the dealer, since what is purchased and sold by the dealer is nothing but yarn. Hence, under the powers conferred in him under Section 20(2) of the APGST Act, 1957, he issued pre -revision show cause notice calling for the objections. The assessee filed their objections stating that they purchased single yarn and they will sell double, multifold and specialized yarn. But the Revisional Authority observed that the activity of processing this yarn will not come under the definition of "manufacture" and accordingly confirmed the proposal made by him in the revision show cause notice and directed the Commercial Tax Officer, Rajendranagar to give effect to his order.

(3.) AT the time of hearing of the appeal, it has been contended by the learned counsel for the appellant that when once a certificate of tax exemption or holiday incentive has been granted in favour of the appellant, the same cannot be withdrawn by the assessing authorities or revisional authorities. He further argued that industrial incentives were given to the new industrial units for development of industrial products irrespective of the definition of 'manufacture'. It is further argued whether industrial unit is engaged in manufacturing process or not, when once a certificate has been given in favour of the industry, the same is entitled to enjoy the said certificate though in practical sense the industry is not engaged in manufacturing process. It is also further argued that the order passed by the Revisional Authority is barred by time.