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TMI Blog2022 (5) TMI 1195X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. Tribunal without compliance of the provisions of Rule-50 (3) of the Orissa Sales Tax Rules is lawful and valid ? (c) Whether in the fact and circumstances of the case, the learned Tribunal has committed error of jurisdiction or is erred in law while deciding issues which are not before him in the appeal filed by the Petitioner in absence of cross objection filed by the State ? 3. This Court heard the submissions of Mr. Jagabandhu Sahoo, learned Senior Counsel for the Petitioner and Mr. S. S. Padhy, learned Additional Standing Counsel for the Department-Opposite Party. 4. The background facts are that the Petitioner is a registered dealer under the Orissa Sales Tax Act, 1947 (OST Act) as well as the Central Sales Tax Act, 1956 (CST Act). The Petitioner is a registered Small Scale Industrial Unit (SSI Unit) in terms of the Industrial Policy Resolution (IPR), 1986. It was engaged in manufacture of steel almirahs, racks, tables, air coolers, cabinets. For this, it has been granted a permanent registration certificate by the District Industries Centre (DIC), Rourkela. 5. After coming into force of the IPR 1989, the Petitioner undertook expansion and diversification by v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.1,50,005/-. 10. Aggrieved by the above assessment order, the Petitioner filed an appeal before the Assistant Commissioner of Sales Tax (ACST), Sundargarh Range, Rourkela, who by an order dated 19th June, 2002 confirmed the assessment order and dismissed the Petitioner's appeal. 11. The Assessee then went in appeal before the Tribunal with S.A. No.913 of 2002-03. According to the Tribunal, the production and sale under the diversification scheme could not be construed to be increased commercial production over and above the installed capacity of the Unit and that the Petitioner had violated the stipulation laid down in the Finance Department Notification vide entry No.26-FF and 30-FFF (ii) of the Tax Free Schedule of the IPR, 1989. It was thus held that the Petitioner was not entitled to enjoy the benefit of exemption of tax on purchase of raw materials and sale of finished products under the diversification scheme. 12. The Tribunal further held that the levy of sales tax on the raw materials and sale of finished products @4% and 12% respectively and surcharge @ 10% on the tax on finished products was leviable. Accordingly, the order of the ACST was set aside and the case was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside. 15. As regards question (a), viz., the disallowance of tax exemption on sale of finished products manufactured by the industrial unit under the diversification scheme, the Court notes that a clarification on IPR 1989 was issued by the Director of Industries, Orissa by its letter dated 24th/28th May, 2001 with particularly the reference to the expression "enabling installed capacity", it was clarified as under: "Existing installed capacity means the capacity recorded in the permanent registration certificate (PMT) at the time of issue of the same and there is no provision to amend the same capacity frequently unless undertaken E/M/D, provided such E/M/D should fulfill the criteria as defined in relevant IPR. Similarly, in no case the original capacity recorded in the PMT can be reduced for the purpose of availing the incentives. In this connection, this office has already clarified that once eligibility certificate for S.T. concession is issued, it cannot be amended with every increase in fixed capital investment, vide this office letter No. 6738 dtd. 23.5.2000 (copy enclosed)." 16. In Tin Plate Company of India Limited v. State of Bihar [2004] 135 STC 385, the Jharkhand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notification has to be given effect to. Based upon the facts aforesaid and the interpretation of clause (15.4) of S.O. No. 478 read with clause (Ga) of S.O. No. 57 dated March 2, 2000 the petitioner is entitled to full exemption in respect of the sales tax paid on the purchase of the raw materials i.e., HR coils for the production of the new product, i.e., TMBP which was not earlier produced in the unit of the petitioner for manufacture of ETP." 17. Once it was clear that the Petitioner had stopped manufacturing the products in terms of the original installed capacity and was manufacturing only under the diversification unit, there is no justification in withdrawing the exemption. In this context, again reference may be made to a circular dated 24th June 1999 issued by the Commissioner of Commercial Taxes, Orissa to all the authorities functioning under the OST Act wherein it was observed therein as under: "xxx xxx xxx Lately it has come to the notice that some of the assessing officers and first appellate authorities have allowed to such Industrial units undertaking Expansion/ Modernization/ Diversification, exemption of sales tax on entire purchase of raw materials and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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