9911796707
TMI Blog2009 (12) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner from the date of application. The needful shall be done within a period of four months from the date of receipt of copy of this order. - 14411 of 1998 - - - Dated:- 14-12-2009 - KUMAR M.M. AND JASWANT SINGH , JJ. The judgment of the court was delivered by M. M. KUMAR J. This petition filed under article 226 of the Constitution challenges the order dated October 28, 19994 (P10) passed by the Lower Level Screening Committee (for brevity, the LLSC ) rejecting the claim of the petitioner for sales tax exemption on the ground that the petitioner's unit went into production prior to February 11, 1994 and in view of notification issued by the Excise and Taxation Department, Haryana, dated February 11, 1994 (P9), it does not qualify for the said benefit. It has also been noticed by the LLSC that the petitioner's unit was prior to February 11, 1994 in the negative list of industries as appended to the Third Schedule of the Haryana General Sales Tax Rules, 1975 (for brevity, the Rules ). Challenge has also been made to the order dated August 5, 1998 (P12) passed by the Higher Level Screening Committee (for brevity, the HLSC ) rejecting the appeal of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (o) of sub-rule (2) of rule 28A of the Rules is that now the Industries Department notifies periodically the list of class of industries which would not be entitled to the grant of incentives in the nature of sales tax exemption/deferment, capital investment subsidy and electricity duty, etc. On the basis of such negative list, various agencies of the State of Haryana process the applications of the industrial units who intend to avail of incentives. On January 11, 1991, the Industries Department notified the class of industries which were not eligible for the grant of capital investment subsidy under the Industrial Policy of 1988 (P1). It is pertinent to notice here that after promulgation of rule 28A of the Rules, the Industries Department issued two negative lists on January 3, 1991 and June 19, 1991, containing the class of industries which were ineligible for grant of sales tax exemption/deferment. In the year 1992, another industrial policy was formulated by the State of Haryana, namely, New Industrial Policy of 1992 . A negative list of class of industries under the New Industrial Policy of 1992 was notified on March 9, 1992, which has superseded the earlier negative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities. The petitioner was granted exemption from electricity duty from the date of commencement of production, i.e., December 20, 1993 (P5), capital subsidy was granted on the generating set purchased by it (P6), an industrial plot in industrial estate at Karnal was also allotted (P7) and a loan of about Rs. 10 lacs for running the industry was also granted by the Haryana Financial Corporation on September 24, 1993 (P8). It has been claimed that all the abovementioned benefits were granted to the petitioner on the basis of the recommendations made by the General Manager, District Industries Centre, Karnal, respondent No. 4, who had recommended the case of the petitioner in accordance with the notifications dated May 25, 1993 and October 13, 1993 (P3 and P4). Thereafter the petitioner set up its industrial unit at Karnal and applied to respondent No. 4 for registration as a smallscale industrial unit. It was provisionally registered as a small-scale industry vide registration No. 050503786, dated August 24, 1993. Subsequently it was also granted regular registration No. 050526786, dated December 27, 1993 by respondent No. 4. The commercial production in the industrial unit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 1, 1988 to March 31, 1997. However, the industries included in the negative list as per the Third Schedule of the Rules are not entitled for the benefit of exemption. The petitioner-firm is engaged in the manufacturing of polythene bags and sheets, which is in the negative list and as such the petitioner is not entitled for the benefit of exemption of sales tax. Accordingly, the application and appeal of the petitioner has been rightly rejected by the LLSC and HLSC, respectively. A separate written statement on similar lines has also been filed by respondent Nos. 2, 3 and 4. Mr. Sandeep Goyal, learned counsel for the petitioner, has vehemently argued that the petitioner had established his industrial unit of polythene bags and sheets in pursuance of new industrial policy announced in 1992 and the various concessions announced therein. According to the learned counsel it was granted exemption from electricity duty from the date of commencement of commercial production with effect from December 20, 1993 and subsidy was also given on the generating set purchased by it. He has drawn our attention to various averments made in para 10 of the petition and argued that even industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for exemption within 90 days of the commercial production. He has argued that the petitioner's unit went into commercial production on December 20, 1993. Therefore, the application filed by the petitioner on February 11, 1994 was within 90 days within the meaning of rule 28A(5) of the Rules from the date of commercial production and it was made during the operative period. Therefore, the orders passed by the LLSC dated October 28, 1994 (P10) and order dated August 5, 1998 passed by the HLSC (P12) are liable to be set aside. Another submission made by the learned counsel for the petitioner is that the petitioner has not charged any tax from its customers, which would show the bona fide of the petitioner that all the time it was expecting that the claim made by it is meritorious and, therefore, no question of undue enrichment would arise. Mr. R. D. Sharma, learned State counsel, on the other hand has argued that although the petitioner has made an application within the specified period but it has exercised option to grant exemption with effect from December 20, 1993 when the manufacturers of polythene bags and sheets were still in the negative list. Accordingly, any man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complex administration areas. 100% of fixed capital investment 90% of fixed capital investment but not exceeding rupees three crores 5 years from the date of commercial production Provided that in the case of exemption, the benefit shall extend to tax on gross turnover and in the case of deferment, it shall extend to tax on the taxable turnover of goods manufactured by the unit: Provided further that in case of expansion or diversification only expanded or diversified capacity of an existing unit shall be entitled to (exemption or deferment) under this rule and notwithstanding anything to the contrary contained in these Rules, the expanded or diversified capacity shall be considered as independent entity for the purpose of sales tax registration and every such industrial unit shall obtain a separate registration certificate. A perusal of the above extracts of the rule would show that the benefit of tax exemption or deferment is available to an eligible industrial unit who has been issued exemption or entitlement certificate for the period from year to year in various zones from the date of commercial production or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the negative list with effect from February 11, 1994 by taking a conscious decision. The petitioner has applied within 90 days from the date of its commercial production which has commenced from December 20, 1993. It is also not disputed that the unit of the petitioner is a new unit within the meaning of clause (2)(c) of rule 28A of the Rules. The claim of the petitioner has been declined by the LLSC on October 28, 1994 (P1) solely on the ground that the petitioner's unit had gone into production prior to February 11, 1994 and therefore it does not qualify for the aforesaid benefits. The aforesaid order has been upheld by the HLSC vide order dated August 5, 1998 (P12). A reference has been made to the notification dated February 11, 1994 (P9) which has amended the Third Schedule containing various items which are in the negative list and the plastic material which was shown in the negative list earlier (at item No. 18 of the notification dated March 9, 1992, annexure P2) has been deleted. It is true that the production in the unit of the petitioner has commenced on December 20, 1993 but an application was made by the petitioner on February 11, 1994 when the polythene ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the negative list would not be just and fair especially when an option has been given to claim such benefits either from the date of commercial production or from the subsequent date when the eligibility certificate or exemption certificate is issued. It remains undisputed that the petitioner's unit is eligible in all respects on the date when an application for grant of eligibility certificate was filed so as to avail the benefit of sales tax exemption. Accordingly, the exemption could be granted either from the date of issuance of entitlement/exemption certificate or from the date of commercial production. Merely because the petitioner has opted from the date of commercial production, when it was on the negative list would not necessarily mean that it cannot be granted from the date of issuance of entitlement/exemption certificate as the rule is not mandatory. Therefore, we are of the view that LLSC was obliged to consider the application of the petitioner for grant of exemption from sales tax with effect from the date of issuance of entitlement/exemption certificate when the bar of placing the petitioner's industry on the negative list has been removed. Accordingly it ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
