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Tax & Customs LawSupreme Court of India

Commercial Tax Officer, Rajasthan v. Binani Cements Ltd. and Another

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 336 of 2003)Decided 19 Feb 2014
Civil Appeal No. 336 of 2003
Justice H.L. Dattu · Justice S.A. Bobde

Background

A large new cement unit claimed the higher sales-tax exemption available to a general category of prestigious industrial units. The screening committee instead applied the scheme's separate category for new cement units, allowing a lower exemption. The High Court upheld the company's claim and the Revenue appealed.

Decision Breakdown

The Supreme Court allowed the Revenue's appeal and set aside the High Court decision. The scheme specifically classified new cement units by size and investment, leaving the large-unit category without an upper investment ceiling. That specific provision governed the company even though its investment could also fit a broader general description. It was therefore entitled to the exemption for a large new cement unit under Item 1E, rather than the seventy-five-percent general-category benefit it sought.

Lesson Learnt

A business cannot choose a more generous general exemption when a specific provision governs its industry. The scheme's categories and exclusions must be read together before estimating the tax benefit of a new investment.

Commercial Tax Officer, Rajasthan v. Binani Cements Ltd. and Another – Legal Case Shots | LegalAware