Madhya Pradesh High Court: While dealing with a petition filed by Eicher Motors Ltd. against the Commissioner of Commercial Tax, Indore, the Bench comprising of Justice Vivek Rusia and Justice Binod Kumar Dwivedi, held that the petitioner was not entitled to a refund of the forfeited tax.
Background:
The petitioner, Eicher Motors Ltd., challenged a reassessment order dated 23.04.2003, along with subsequent appellate and revisional orders, alleging unlawful reduction of tax exemption benefits granted under a State Notification dated 28.02.1995 for non-conventional power generation units.
The company had been declared eligible for a commercial tax exemption either for a period of six years (from 29.04.1998 to 28.04.2004) or up to a cumulative monetary limit of â‚ą2,97,58,902, whichever was earlier. Although the provisional eligibility certificate was issued only on 28.01.1999, it was made effective retrospectively from 29.04.1998.
During the interim period prior to the certificate’s issuance, the petitioner collected and deposited ₹76,61,873 in tax. The Assessing Officer later forfeited ₹73,81,605 of this amount and adjusted it against the cumulative exemption limit, thereby reducing the total benefit available to the company.
Decision
The Court held that although the forfeiture of this amount was valid under the doctrine of unjust enrichment (since the petitioner could not retain tax collected on exempted goods), reducing the exemption limit by the same amount amounted to double jeopardy. It clarified that the petitioner’s exemption period remained from 29.04.1998 to 28.04.2004, or until the limit of ₹2,97,58,902 was reached, whichever occurred first.
Accordingly, the Court set aside orders dated 03.10.2005, 29.06.2022, and 03.12.2024, but only to the extent of the wrongful deduction from the exemption limit, thereby restoring the petitioner’s full exemption entitlement. No costs were awarded.
Advocates appearing in the case
Shri Manoj Munshi, learned Senior Advocate assisted by Shri Mahak Guru – Advocate for the petitioner.
Shri Bhuwan Gautam – Government Advocate for the respondent/State.
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