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TMI Blog2017 (4) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... rces for which permit / license is required under any Rules or Mineral Act,At this stage it is required to be noted that the raw material used in Phase-II of Gandhar Complex was gas and ethylene. The gas was procured from GAIL which supplied it to the petitioner through pipeline. In light of the aforesaid facts it is required to be considered whether the gas used can be said to be local mineral resource for which any license or permit under any Mineral Act or Rules is required. Natural gas cannot be said to be mineral/local mineral resource for which any permit/license is required under any of the provisions of the Mines and Mineral Act or Rules, the impugned decision to deny the benefit of the Sales Tax incentive under the Government Resolution dated 11.09.1995 to the petitioner for Phase-II Project cannot be sustained and the same deserves to be quashed and set aside and the matter is required to be remanded to the State Government for its fresh decision in light of the observations made hereinabove and to grant the benefit of the Incentive Scheme to the petitioner for Phase-II Project of Gandhar Complex if all other conditions of the Government Resolution dated 11.09.1995 are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1956 and as a result thereof, IPCL came to be merged with the petitioner No.1 herein Reliance Industries Limited (hereinafter referred to as RIL ). Thus, the petitioner No.1 RIL stepped into the shoe of IPCL. That the respondent No.1 State of Gujarat through its Industries and Mines Department, promulgated a Resolution dated 11.09.1995 bearing No.INC/1095/2000/(3)/1, by virtue of which, for the purpose of implementing the new industrial policy, referred to therein as evolved by the State Government for accelerating the development of the backward areas of the State of Gujarat by creating large scale employment opportunities, Incentive Scheme, inter alia, providing incentive, in the form of Exemption from Sales Tax to industrial units for setting up industrial complex / project in the backward areas, defined therein, came to be published. [2.2] That in response to the aforesaid Government Resolution / Incentive Scheme, with a view to avail thereunder the benefit of incentive in the form of Exemption from Sales Tax, IPCL moved an application before the respondent No.2 Industries Commissioner, State of Gujarat on 17.11.1995, inter alia, pointing out that grassroot Mega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonally present for discussion with the concerned officials from the office of respondent No.2 in respect of the matter concerning the issuance of eligibility certificate for Exemption from Sales Tax qua Phase-II of the said Gandhar Complex of IPCL, for which, a communication dated 11.01.2001 was addressed by IPCL to the office of the respondent No.2. It is the case on behalf of the petitioners that thereafter and based upon the discussion the concerned office of the IPCL had with the office of respondent No.2, vide communication dated 07.06.2002, the IPCL made a request to grant time to comply with the requirement insisted upon by the office of respondent No.2 in the form of requisite details for securing eligibility certificate for Exemption from Sales Tax under the aforesaid scheme for Phase-II of Gandhar Complex. It is the case on behalf of the petitioners that while the aforesaid application moved by IPCL seeking issuance of eligibility certificate for Sales Tax Exemption in respect of Phase-II of the Gandhar Complex was under process, an order dated 27.11.2002, came to be issued by the office of the respondent No.2, by virtue of the upper limit set out in the eligibility cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioners that in the said communication dated 13.06.2006 it was specifically conveyed for and on behalf of the IPCL that the original application moved under the Incentive Scheme, seeking Exemption from Sales Tax as an incentive thereunder in respect of the Gandhar Complex for the entirety of the said Gandhar Complex with an estimated investment of ₹ 3500 Crores and, thereafter, as the said Gandhar Complex was to be completed in two phases, from the stand point of administrative convenience, as it appears, at the request of respondent No.2, the details in respect of Gandhar Complex for Exemption under the Incentive Scheme came to be segregated in PhaseI and Phase-II and therefore, when the PhaseI is already completed, as a consequence thereto, based upon a decision already taken in the set up of the respondents, for registration of IPCL, under the Incentive Scheme for Exemption in respect of Sales Tax, as incentive for the said Gandhar Complex, requisite certificate, covering Phase-II of Gandhar Complex deserves to be issued in favour of the IPCL. It is the case on behalf of the petitioners that in response to the aforesaid, IPCL received a communication dated 15.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase on behalf of the petitioners that as a matter of fact, during the course of the discussion, the officials of the petitioner No.1 had with the office of the respondents during the course of their visit, it was specifically and categorically pointed out that when a decision, in principle, was taken to consider the Gandhar Complex, in its entirety, as eligible for Exemption from Tax under the said scheme as an incentive and, thereupon, subsequent thereto, when, from the stand point of administrative convenience, the requisite details, pertaining to the Gandhar Complex, were segregated into PhaseI and Phase-II and, thereupon, when the eligibility certificate, covering investment in PhaseI was issued in the first place, as PhaseI was completed prior in point of time, the question of processing the details in respect of the Phase-II for deciding the same afresh on the premise as to whether the same would qualify as eligible for Exemption under the said scheme or not, pales into absolute insignificance. It is the case on behalf of the petitioners that it was also pointed out that the said Phase-II of Gandhar Complex can never be construed as gas related and further, even if the same i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvocate appearing on behalf of the petitioners that in the facts and circumstances of the case clause 9(c) of Annexure-B to the Incentive Scheme shall not be applicable and/or on the same the benefit of Incentive Scheme cannot be denied to the petitioners for Phase-II of Gandhar Complex. [4.3] It is submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioners that as such for the Phase-II of Gandhar Complex, natural gas is being used for the manufacture. It is submitted that firstly the petitioner No.1 / IPCL can be said to be the consumer of natural gas being used for manufacture of item and it can be said that the same is used as input. It is submitted that therefore for being a consumer of the natural gas, the petitioner No.1 / IPCL is not required to obtain any permit / license. It is submitted that therefore the decision to deny the benefit of Incentive Scheme is on misinterpretation of clause 9(c) of the Annexure-B to the Incentive Scheme. [4.4] It is further submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioners that even otherwise the natural gas cannot be said to be the local mineral as the natural gas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntia thereof with the object sought to be achieved. It is submitted that it is not possible to comprehend as to what could be the object for excluding the public sector as opposed to the private sector from the purview of the said scheme, if the public sector was to manufacture final project based on local mineral resources requiring permit / license under any Mineral Rules or Act. It is submitted that therefore the classification sought to be made is not based on any ineligibility differentia having the nexus with the object to be achieved. Making above submissions and relying upon the above decision it is requested to allow the present petition and grant the reliefs as prayed for. [5.0] Present Special Civil Application is vehemently opposed by Ms. Manisha Lavkumar, learned Government Pleader appearing on behalf of the State. [5.1] It is vehemently submitted by Ms. Manisha Lavkumar, learned Government Pleader appearing on behalf of the State that the petitioner has rightly been denied the grant of premier registration for Phase-II of the Project, as the conditions for grant of premier registration under the Scheme has not been satisfied. It is submitted that as earlier it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpretation / dispute or contention of the resolution shall be final and binding on the applicant unit. It is submitted that the petitioner had been given a chance of hearing before the SLHPC. That the petitioner Company presented its case before the Committee and the CMD of the petitioner Company presented its case before the Committee. It is submitted that thereafter the SLHPC after considering all the representations made by the petitioner, ultimately decided to grant provisional premier registration for PhaseI of the Project. It is submitted that therefore the petitioner is not eligible for any incentive for Phase-II of the Project. It is submitted that as such the petitioner accepted the decision of the SLHPC to grant provisional prestigious registration and infact submitted the revised application form and claimed the Sales Tax incentive for PhaseI of the Project only. [5.3] It is further submitted by Ms. Manisha Lavkumar, learned Government Pleader appearing on behalf of the State that thereafter once again the petitioner applied for Phase-II Project on 11.01.2001 in the prescribed format for the investment of ₹ 2512 Crores in 5 Projects. It is submitted that the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Phase-II Project the petitioner is not entitled to the incentive benefit, the petitioner has been rightly denied the benefit of Incentive Scheme under the Government Resolution dated 11.09.1995. [5.6] Ms. Manisha Lavkumar, learned Government Pleader appearing on behalf of the State has also relied upon the definition of minerals from Halsbury s Laws of England. She has also submitted that mineral resource is a concentration or occurrence of material of intrinsic economic interest in or on the earth s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. It is submitted that natural gas can be said to be a mineral resource. She has further submitted that Engineers, Economists and Scientists describe mineral as a resource when used in economic context. It is submitted that these resource refers to any mineral commodity that can be removed from the ground. It is submitted that there are three categories of mineral resources i.e. fuel minerals, metallic minerals and industrial minerals. It is submitted that fuel minerals refer to petroleum and natural gas, metallic minerals refer to minerals as scientifically defined and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to the benefit of Incentive Scheme under the Government Resolution dated 11.09.1995 more particularly as a premier unit or not, [6.1] At the outset it is required to be noted that for PhaseI Project the petitioner has been granted the Incentive Scheme under the Government Resolution dated 11.09.1995 treating it as premier unit. However, for Phase-II Project the petitioner has been denied the Sales Tax incentive under the Government Resolution dated 11.09.1995 on the ground that for Phase-II Project the unit is based on natural gas which can be said to be local mineral resources for which permit / license is required under the Mineral Rules or Act and therefore, for the Phase-II, the petitioner is ineligible to get the incentive benefit as per Clause 9(c) of the Annexure-B to the Incentive Scheme. Therefore, while considering the question posed in the present petition, it is required to be considered whether natural gas / gas used by the petitioner in its Phase-II Project can be said to be local mineral resources for which permit / license is required under any Rules or Mineral Act,At this stage it is required to be noted that the raw material used in Phase-II of Gandhar Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes all minerals except mineral oils. As per section 3(b) of the Act, 1957, mineral oils includes natural gas and petroleum . Therefore, the natural gas and petroleum which can be said to be mineral oils, but may not be included in the definition of the minerals , for which license or permit is required under the Act, 1957. As observed hereinabove, even as per the Oil Fields Act, mineral oils include natural gas and petroleum. Therefore, natural gas and petroleum is a mineral oil and therefore, considering the provisions of Act, 1957, natural gas and petroleum being mineral oil cannot be included within the definition of minerals . Under the circumstances, the natural gas used by the petitioner Company in Phase-II Project cannot be said to be local mineral resource for which any license or permit is required under the Mineral Act or Rules. Under the circumstances, the petitioner has been wrongly denied the benefit of Sales Tax Incentive Scheme under the Government Resolution dated 11.09.1995. [6.6] Now, so far as the submission made by Ms. Manisha Lavkumar, learned Government Pleader that initially, composite application was made for the benefit of Tax Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nr. Jageshwar, Bharuch The Committee discussed the agenda note on the eligibility of public sector industrial unit. The conditions which restricted the eligibility to public sector unit was discussed in detail and the Committee felt that out of the three conditions, the industrial unit fulfilled two conditions viz., competition with private sector or public sector units and reinvestment of amount equal to the incentive availed of. The third condition that the public sector unit should not be based on local mineral resources for which permit or licence was required was examined by the Committee. It was observed that the raw material for the project was natural gas available from GAIL/ONGC. The Committee observed that IPCL would not require any licence or permit for mining of this petroleum product. The Committee also noted that the gas cracker division of the project required natural gas whereas remaining projects were dependent on the end product of cracker division. If the project was split into cracker and down stream divisions, the investment in the down stream project would be independently eligible. Since the company had applied as industrial complex, the Committee deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . [6.8] In view of the above and for the reasons stated above and as observed hereinabove, natural gas cannot be said to be mineral / local mineral resource for which any permit / license is required under any of the provisions of the Mines and Mineral Act or Rules, the impugned decision to deny the benefit of the Sales Tax incentive under the Government Resolution dated 11.09.1995 to the petitioner for Phase-II Project cannot be sustained and the same deserves to be quashed and set aside and the matter is required to be remanded to the State Government for its fresh decision in light of the observations made hereinabove and to grant the benefit of the Incentive Scheme to the petitioner for Phase-II Project of Gandhar Complex if all other conditions of the Government Resolution dated 11.09.1995 are satisfied. [7.0] In view of the above and for the reasons stated above, petition succeeds. The impugned decision of the respondents in rejecting the claim of the petitioner for Sales Tax incentive under the Government Resolution dated 11.09.1995 for Phase-II Project of Gandhar Complex is hereby quashed and set aside. Respondents are directed to reconsider the case of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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