2018 (9) TMI 1642 – ALLAHABAD HIGH COURT – [2018] 59 G S.T.R. 82 (All) – Facility of deferment of payment of the Value Added Tax denied – Sick Industrial Unit – Impact of migration from VAT regime to GST regime – modified Rehabilitation Scheme sanctioned by BIFR on 24.09.2013 – Held that:- It appears that while passing the impugned order dated 09.05.2018 whereby the Government Order dated 10.02.2014 has virtually been declared to be inoperative, the authority concerned does not appear to have taken into account the effect of the repeal and saving clause contained in section 174 of U.P. Goods and Services Tax Act, specially sub section 2(c) of section 174 of the said Act. The impugned order dated 09.05.2018 only states that under section 71 of the then prevalent U.P. Value Added Tax Act, the powers were vested in the State Government to defer the liability of payment of Value Added Tax in case of the sick units declared as such under the Act – What is, thus, noticeable here is that the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
uarters, Lucknow, whereby the facility of deferment of payment of the Value Added Tax granted earlier by the State Government vide its order dated 10.02.2014 has been declared to be not available, as a result of which the petitioner which is a sick unit declared, as such under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as 'the Act') is faced with the demand to pay the taxes. The petitioner is a producer of Vanaspati Ghee i.e. edible oil. However, for certain reasons, an application was moved under the Act by the petitioner-unit in the year 2001 for declaring it to be a sick unit with a prayer for formulation of rehabilitation scheme. On the said application, the Board of Industrial and Financial Reconstruction (BIFR) declared the unit to be sick on 07.06.2006 and further proceeded to frame Rehabilitation Scheme under section 17(3) of the Act. As per the said rehabilitation scheme sanctioned by the BIFR, the Value Added Tax dues were de
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ides for the said deferment and further clarifies that the dues of Value Added Tax shall be payable starting from the 6th years from the date of sanction of the modified Rehabilitation Scheme. Accordingly, in terms of the said Government Order dated 10.02.2014 the benefit of the said deferment was enjoyed by the petitioner-unit. In the meantime, U.P. Value Added Tax was repealed on 01.07.2017 on enforcement of U.P. Goods and Services Tax Act. Section 174 of U.P. Goods and Services Tax Act provides for repeal and saving clause which is quoted hereunder: "174.Repeal and Saving 1. Save as otherwise provided in this Act, on and from the date of commencement�of this Act, the Central Excise Act, 1944 (1 of 1944) (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955), the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
said notification is rescinded on or after the appointed day; or (d) affect any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or (e) affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Act
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
epealed on enforcement of U.P. Goods and Services Tax Act with effect from 01.07.2017. Thus, the order dated 10.02.2014 under which the deferment of the Value Added Tax dues was granted to the petitioner's unit in terms of the Rehabilitation Scheme formulated by the BIFR on 24.09.2013 is also saved. However, it appears that while passing the impugned order dated 09.05.2018 whereby the Government Order dated 10.02.2014 has virtually been declared to be inoperative, the authority concerned does not appear to have taken into account the effect of the repeal and saving clause contained in section 174 of U.P. Goods and Services Tax Act, specially sub section 2(c) of section 174 of the said Act. The impugned order dated 09.05.2018 only states that under section 71 of the then prevalent U.P. Value Added Tax Act, the powers were vested in the State Government to defer the liability of payment of Value Added Tax in case of the sick units declared as such under the Act. It further states tha
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =