Excise And Taxation Commissioner, Haryana vs. M/S Aei Lamination PVT LTD

Held

The Court held that the substantial questions of law are answered in favour of the assessee, aligning with the decision in M/s Sonex Auto Industries Private Limited's case. The Court reasoned that Section 61(2)(d)(iii) of the HVAT Act, read with Rule 69(2) of the HVAT Rules, allows for the continuation of tax deferment benefits. When an industrial unit opts to pay half of the deferred tax upfront, this payment is to be made on the tax calculated on sales without deducting input tax. The amount of input tax paid by the unit on goods used in manufacture is to be counted towards the payment of this 50% deferred tax upfront. The Court clarified that the deferred tax is to be calculated on the tax on sales of manufactured goods, and the input tax paid is to be considered as tax paid in advance towards the 50% upfront payment. The judgment in M/s Sonex Auto Industries Private Limited's case was found to be directly applicable.

Facts

The Excise and Taxation Commissioner, Haryana (appellant-revenue) filed appeals against an order of the Haryana Tax Tribunal. The respondent assessee, M/s AEI Lamination Pvt. Limited, is engaged in manufacturing and selling tractor parts and was granted a tax deferment certificate under the Haryana Value Added Tax Act, 2003 (HVAT Act) for `51,01,250/-. The assessee was entitled to pay half of the deferred tax upfront with quarterly returns. For the assessment year 2008-09, the assessing authority created an additional demand of `11,35,235/- under the Central Sales Tax Act, 1956. The assessee challenged this, arguing that the benefit of deferment was wrongly reduced. The Joint Excise and Taxation Commissioner (Appeals) dismissed the assessee's appeal. The Tribunal, however, allowed the assessee's appeals, relying on a previous High Court judgment.

Key Issues

1. What is the amount of deferred tax within the meaning of Section 61(2)(d)(iii) of the HVAT Act, 2003, read with Rule 69 of the Haryana Value Added Tax Rules, 2003? 2. Whether the amount of input tax paid by the assessee can be counted towards the payment of 50% of deferred tax upfront under Section 61(2)(d)(iii) of the HVAT Act, 2003? Contentions of the appellant-revenue: The appellant-revenue argued that the learned Tribunal failed to appreciate that input tax paid by the assessee cannot be counted towards the payment of 50% of deferred tax upfront. Contentions of the respondent-assessee: The respondent-assessee argued that the assessment order was illegal and the benefit of deferment was wrongly reduced. The Tribunal relied on the judgment of this Court in M/s Sonex Auto Industries Private Limited vs. State of Haryana.