2025-VIL-655-MP
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VAT High Court Cases

Madhya Pradesh Commercial Tax Act, 1994 - Tax exemption, reassessment, forfeiture of tax, cumulative quantum of tax exemption - Petitioner was granted a tax exemption under Government notification for setting up a non-conventional power generation system. The petitioner was granted provisional eligibility certificates on 28.01.1999 with retrospective effect from 29.04.1998. During the period from 01.04.1998 to 31.01.1999, the petitioner paid tax while awaiting the issuance of the provisional certificates - Whether the Assessing Officer was justified in forfeiting the amount paid by the petitioner as tax during the period from 01.04.1998 to 31.01.1999 – HELD - The petitioner paid tax from 01.04.1998 till 31.01.1999 which has been declared illegal. The amount has wrongly been declared illegal because the petitioner did not possess the provisional exemption certificate therefore, as a bonafide taxpayer, paid the taxes from 01.04.1998 till 31.01.1999 - As per the language of the notification, the exemption period was to commence from the date of start of production, which the petitioner had declared and which was mentioned in the exemption certificates as 29.04.1998. Therefore, the amount paid by the petitioner as tax from 01.04.1998 to 28.01.1999 cannot be forfeited under the doctrine of unjust enrichment, as the petitioner was a bona fide taxpayer during that period - the petitioner is not claiming refund of the same but the said amount of tax is not liable to be reduced from the total amount of exemption given to the petitioner. The petitioner is entitled to an exemption for the period of 6 years or achievement of a total amount, whichever is earlier. Once tax collected for the said period is forfeited treating it to be illegally paid, the reduction of said amount from the cumulative quantum of tax exemption amounts to double jeopardy – The impugned orders are set aside to the extent of deduction of amount paid by the petitioner from the cumulative quantum of tax exemption – The writ petition is partly allowed - Whether the Assessing Officer was justified in reducing the cumulative quantum of tax exemption of Rs. 2,97,58,902/- by Rs. 73,81,605/- - HELD - The reduction of Rs. 73,81,605/- from the cumulative quantum of tax exemption of Rs. 2,97,58,902/- amounted to double jeopardy. Once the tax collected for the said period was forfeited, treating it as illegally paid, the reduction of the same amount from the cumulative quantum of tax exemption was not justified. The petitioner was entitled to the full exemption of Rs. 2,97,58,902/- for the maximum period of six years or until the cumulative quantum was achieved, whichever was earlier.
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