Trade Cir. No. 20T of 2010, Date: 30.06.2010

Sub: Applicability of the Hon. Supreme Court Judgment in the case of M/s. Pee Vee Textiles Judgment.

Ref: Internal Circular No. 8A of 2009-dated 31-3-2009.

Gentlemen/Sir/ Madam,

The issue as regards pro rata allowance of benefits under the Package Scheme of Incentives was in dispute. A division Bench of Hon’ble Bombay High Court by its judgment dt. 13.12.2008 has decided the reference filed by the Commissioner of Sales Tax in case of M/s Pee Vee Textiles Ltd., against the department. Since the department had also initiated proceedings to challenge the ratio laid down in other similar cases decided by the Tribunal, Internal Circular 8A of 2009 Dt 31.03.2009 was issued directing the departmental officers to decide the cases involving such issue in accordance with Section 33(4C) of Bombay Sales Tax Act, 1959. Needless to state that the circular was not applicable in the case of M/s Pee Vee Textiles Ltd., as the Bombay High Court had already delivered the judgment.

2. The SLP filed by the Department was dismissed by the Hon’ble Supreme Court on 27.07.2009. Subsequently, the Government of Maharashtra promulgated ordinance on 27.08.2009 providing for grant of proportionate benefits to the dealers covered under the 1993 Package Scheme of Incentives under the Maharashtra Value Added Tax Act, 2002. No amendment was carried put to the Bombay Sales Tax Act, 1959. As a result, the Hon’ble Supreme Court judgment is required to be followed for the B.S.T. assessment period up to 31.03.2005. In view of this settled legal position the Internal Circular No 8A of 2009 Dated 31.03.2009 does not hold good. All the officers of the department are directed to follow the instructions scrupulously.

3 This circular cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.

4 You are requested to bring the contents of this circular to the notice of the members of your association.

Yours faithfully


Commissioner of Sales Tax,

Maharashtra State, Mumbai

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