9911796707
TMI Blog2014 (11) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... e Level Committee to reconsider its earlier decision, the Division Bench in its interim direction / order dated 5.5.2006 specifically directed the State Level Committee not to consider the factum of stoppage of production subsequently and the unit being closed subsequently and despite the same while taking the decision which has been communicated on 28.6.2006 the State Level Committee has taken into consideration the subsequent closure of the unit and therefore, the same is not permissible and therefore, the impugned order / decision is against the interim direction issued by this Court. Decision of Supreme Court in the case of Mangalore Chemicals and Fertilizers Limited [1991 (8) TMI 83 - SUPREME COURT OF INDIA] distinguished wherein it was held that, non fulfillment of requirement for benefit of exemption was only formal and procedural and not fatal to the application for grant of permission. - In the present case non compliance of the conditions cannot be said to be formal or procedural. - Decided against the assessee. - SPECIAL CIVIL APPLICATION NO. 6844 of 2006 - - - Dated:- 19-8-2014 - MR. M.R. SHAH AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MR. R.S. SANJALWALA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.2. Sales Tax Incentive: The eligible industrial unit shall register itself atleast 90 days before the date of commercial production with the sanctioning authority. The sanctioning authority will issue registration certificate with a copy to the Sales Tax Department. On the basis of this registration certificate the eligible unit can start enjoying the benefit of sales tax from the date of commercial production. However, the validity of registration certificate shall be only 120 days from the date of commercial production. The unit shall have to obtain eligibility certificate for continuing to enjoy the incentive thereafter. After going into commercial production, the industrial unit shall submit its detailed application for grant of eligibility before the expiry of 120 days from the date of commercial production. On submission of all relevant document to the sanctioning authority, the Industries Department will carry out the inspection of required, and issue of eligibility certificate. However, pending the verification of the assets etc. the Industries Department may issue provisional eligibility certificate to the extent of 25% of its tentative total eligibility. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land revenue. (f). The units opting for sales tax deferment shall be required to furnished security to Sales Tax Authority against the deferred amount of sales tax by way of PARIPASU charge, second charge or personal guarantee in the form of security bond as prescribed under this Department Resolution No. INC/1087/2138/ dated 1st August 1990. (g). Whether the capital investment in an industrial project is to be considered as new industrial unit or expansion or diversification or modernization would be decided by the State Level Committee and its decision shall be final and binding on the applicant industrial undertaking. (h). All matters of interpretation / dispute or contention under the scheme will be referred to State Level Committee and decision of which will be final and binding on the applicant unit. 2.2. Thus, for availment of the benefit of sales tax incentives one of the condition was that the Industrial unit shall have to remain in production continuously at least till expiry of eligible period of incentives. The scheme also provided that, however in case production is discontinued due to reasons beyond the control of the management of the unit, the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the plant and machinery have been procured by the petitioner on transfer from one Asiatic Steel Industries Limited and also on the ground that the petitioner has stopped the manufacturing activities. It appears that thereafter the petitioner made representation to the appropriate authority. That by letter dated 23.12.2002 addressed by the respondent no.2 to the petitioner, the petitioner was informed that the petitioner cannot be granted benefit of the scheme on the ground that the plant and machinery procured by the petitioner has on transfer from Asiatic Steel Industries Limited as well as on the ground that the petitioner has stopped the manufacturing activity / production. That thereafter, the petitioner made representation to the Additional Commissioner (Development) on 30.6.2003 and also remained present at the meeting held on 30.6.2003. The petitioner represented that it is entitled the benefits under the scheme. 2.5. It appears that thereafter the proceedings were initiated under the provision of the Gujarat Sales Tax Act, 1959, assessing petitioner to sales tax and demanding sales tax from the petitioner. Assessment order came to be passed against the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State Level Committee in light of the direction issued and observations made by the Division Bench of this Court. That by communication dated 4.3.2005 issued by the office of the Development Commissioner, the petitioner has been informed about the decision of the State Level Committee to extend the benefit of the scheme to the petitioner and not treating the plant and machinery procured from the ASIL as second hand plant and machinery. That by communication dated 19.4.2005 from the respondent no.6, the petitioner has been informed that respondent no.3 has reported that manufacturing activities at the unit have been stopped by the petitioner and in that view of the matter cash subsidy under the scheme cannot be sanctioned and paid to the petitioner. At that time, petitioner has preferred Special Civil Application before this Court. That the present Special Civil Application came up for hearing before the Division Bench of this Court on 5.4.2006 and while issuing notice upon the respondent, the Division Bench directed that the Court shall be informed that what decision has been taken by the State Level Committee with regard to the condonation of period of break. That the present Sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly erred in refusing to condone the break and consequently denying the benefit of sales tax incentives etc. to the petitioner. 3.1. It is further submitted by Shri R.S. Sanjanawala, learned Senior Advocate for the petitioner that as such the decision of the State Level Committee dated 28.6.2006 rejecting the prayer of the petitioner to condone the break is contrary to the interim direction issued by this Court issued in its interim order dated 5.5.2006. It is submitted that in the order / direction dated 5.5.2006 the Division Bench of this Court specifically directed the Committee to reconsider its earlier decision and to consider all relevant factors which were prevailing at the relevant time. It is submitted that even the Division Bench also specifically observed that the Committee will look into the aforesaid question objectively without considering the fact that at present the applicant company is not in production. It is submitted that despite the aforesaid observation and direction the State Level Committee has rejected the prayer of the petitioner to condone the break on the ground that subsequently the petitioner has stopped the production and / or manufacturing activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g decision of the Hon'ble Supreme Court in the case of Mangalore Chemicals and Fertilizers Limited vs. Deputy Commissioner of Commercial Taxes and others reported in 1992 Suppl (1)SCC 21 in support of his prayer to allow the present Special Civil Application and grant all relief as prayed for. 3.5. Making above submissions and relying above decisions, it is requested to allow the present Special Civil Application and grant the relief as prayed for. 4.0. Present petition is opposed by Shri Jaimin Gandhi, learned Assistant Government Pleader appearing on behalf of the State Government. An affidavit in reply is filed opposing the present Special Civil Application. It is submitted that as such the decision of the State Level Committee rejecting the prayer of the petitioner to condone the break is absolutely in accordance with provision of the scheme. It is submitted that as such the reasons recorded / given by the Committee while rejecting the representation of the petitioner to condone the break are germane to the scheme and considering the policy decision which has been applied uniformly to all such units. It is further submitted that even the decision of the State Level Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f production. It is required to be noted that the State Level Committee was consisting of Industries Commissioner as Chairman and Secretary Industries and Mines Department, Secretary Finance Department and others as members. Under the scheme, all matters of interpretation / dispute or contention under the scheme will have to be referred to State Level Committee and decision of Committee shall be final and binding on the applicant unit. In the present case vide communication dated 28.6.2006 the petitioner has been communicated the decision of the State Level Committee rejecting the prayer of the petitioner to condone the break in production. It is required to be noted that in the case of the petitioner and prior to 30.1.2004 the production was stopped for 13 months i.e. for the period between July 2000 to August 2001 and even after February 2004 the unit was found to be out of operation. It appears that even subsequently the petitioner has stopped the production. That from the impugned communication dated 28.6.2006, it appears that the State Level Committee applied uniform policy while considering the individual cases for condonation of break in production. It appears that while con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 5.5.2006 specifically directed the State Level Committee not to consider the factum of stoppage of production subsequently and the unit being closed subsequently and despite the same while taking the decision which has been communicated on 28.6.2006 the State Level Committee has taken into consideration the subsequent closure of the unit and therefore, the same is not permissible and therefore, the impugned order / decision is against the interim direction issued by this Court. The aforesaid has no substance. It is required to be noted that the decision communicated vide communication dated 28.6.2006 is not solely on the ground that the unit has been closed subsequently and / or subsequently production has been stopped. What is observed by the Division Bench in its order dated 5.5.2006 is that while reconsidering the decision, State Level Committee will look into the question objectively without considering the fact that at present (in the month of May 2006) the applicant company is not in production. The Division Bench never directed that subsequent immediate closure of the unit i.e. after immediately completion of eligible period cannot be considered at all. Under the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
