2023 (3) TMI 941 - HC - VAT and Sales Tax

Claim of exemption even after the expiry of exemption period as per the scheme - Revival of viable sick industrial units - It is the case of the petitioner company that it had suffered because of serious breakdown of law and order and was not able to submit the financial returns - HELD THAT - It appears that in the order dated 28.01.2013 by which the writ petition was disposed of, it was recorded that the petition was filed in the year 2001 seeking a direction to revive the petitioner sick unit pursuant to a minutes of meeting dated 14.06.2000 and also to quash the order dated 22.11.2001 passed by the Board of Industries and Financial Reconstruction (BIFR). The stand of the State that the petitioner was not entitled to any relief and that the benefit had already been availing by the petitioner was recorded. It appears that a concession was made by the petitioner that a final reasoned order may be passed by the Government and on such concession, the order was passed by directing that a final decision be taken within a period of three months. The present demand appears to be for exemption of Sales Tax beyond the period of the policy which cannot be claimed as a matter of right. This Court also finds force in the contention of the learned Standing Counsel, Industries Commerce Department that there has been huge diversion of money of the petitioner company to other companies. A perusal of the minutes of meeting held in the chamber of the Additional Secretary, Industries Commerce dated 14.06.2000 would show that huge amounts were diverted and the same was confirmed by the Managing Director of the petitioner. This Court is of the opinion that the relief claimed is based on speculation and assumption and it does not appear that there is any indefeasible right of the petitioner for such relief. This Court in exercise of its jurisdiction under Article 226 of the Constitution of India does not act as a Court of Appeal and its functions are only confined to the decision making process. In the impugned order dated 20.09.2013, reasons are reflected which according to this Court are cogent and acceptable. This Court is of the further opinion that the factors which have been considered, namely, availing of the benefits of five different heads are relevant and germane to the issue at hand - Though a case has been tried to be projected of hardships to operate and run the Industry, including infrastructural and law and order problem, the petitioner company choose to set up the Industry in that location knowing fully well about the situation. It is however required to be noted that while the petitioner has highlighted the difficulties, the easy availability of raw materials for the cement Industry namely, Limestone has not been focused. Appeal dismissed.

Summary

Issues:
The issues involved in the judgment are the invocation of Article 226 of the Constitution of India regarding exemption under an Industrial Policy, the consideration of benefits under the Industrial Policy of 1986 and 1991, and the challenge to the order dated 20.09.2013 by the Government of Assam.

Exemption under Industrial Policy:
The petitioner, a Public Limited Company, sought benefits under the Industrial Policy of 1986 and 1991 for setting up a cement factory. After being declared a "Sick Unit" by the BIFR, the petitioner claimed that the benefits under the 1991 Policy were not extended to them despite settling dues with Financial Institutions. The State Government's stance was that the 1991 benefits were not applicable as the company was declared sick after the 1997 Policy came into force. A meeting held in 2000 resulted in a fresh application submission for consideration as a Relief Undertaking. The petitioner claimed to have paid substantial amounts from 2005 to 2012 but no final decision was made, leading to the filing of a writ petition. The Division Bench directed the State to pass a reasoned order, which was done on 20.09.2013, leading to the current challenge.

Government's Decision and Legal Considerations:
The petitioner argued infrastructural difficulties and lack of proper transport, citing challenges faced due to the law and order situation in the area. They highlighted the absence of Sales Tax on consumers and the support provided to similar entities. The State, represented by Standing Counsels, contended that the impugned order considered relevant factors like Sales Tax exemption, subsidies, and benefits under the 1986 Policy. The Department's decision was based on the petitioner's utilization of various benefits and diversion of funds to other companies, as noted in a meeting. The Court noted that the relief claimed was speculative, and there was no indefeasible right for such relief. It emphasized that Article 226 jurisdiction does not act as a Court of Appeal and upheld the cogency of reasons in the impugned order. Despite hardships faced by the petitioner, the Court highlighted the abundant availability of raw materials in the area where the industry was set up.

Conclusion:
The Court dismissed the petition, stating that no case for interference was established. It noted the petitioner's choice to operate in the area despite challenges and the abundance of raw materials available. The judgment concluded that the reasons considered in the impugned order were relevant, and no grounds for interference were found. No costs were awarded in the matter.