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2013 (11) TMI 107 - JHARKHAND HIGH COURTCapital investment - Whether petitioner is eligible for incentive/subsidy as existing functional industrial unit or loss making, existing and functional industrial unit - Held that:- crucial date for qualification to get sales tax and other incentives as category (II) or Category III unit is the date of information to the State Government regarding expansion / diversification / modernization. It is specifically mentioned in Clause 8 to Annexure-1 of the Industrial Policy that in order to qualify for sales tax and other incentives, a unit should undertake expansion/diversification/modernization and should sent prior intimation before undertaking expansion/ diversification/ modernization programme to concern officer of Industry Department. Order as contained in memo no.1885 dated 16.06.2003 also laid down the guidelines and it is mentioned that proposal from Industrial Units will be processed according to the said guideline. Thus, for categorising an industrial unit, which is undertaking expansion/ diversification/ modernization, it is necessary to see whether on the date of intimation, said unit is a loss making unit or is a profit making unit. Thus, if on the date of intimation the industrial unit is a loss making existing and functional unit from last two years, then the same falls under Category (III) of the Mega Industrial Unit - the action of the State Government in changing the status of the petitioner's unit from loss making unit to profit making unit is not correct, because on the date of intimation for expansion/diversification/ modernization, petitioner's unit was a loss making unit, because it incur cash losses since last five years. Thus, I hold that petitioner's unit entitled to get capital investment incentive/subsidy as Category (III) Mega Industrial Unit i.e. loss making, existing and functional industrial unit - Decided against Revenue. Tax relief - Sale of clinker or sale of clinker - Whether plea of the State Government that petitioner is entitled to get tax relief only on the sale of clinker and not on the sale of cement is sustainable - Held that:- final product of the petitioner's unit at Chaibasa is cement, manufactured from clinker. Under the aforesaid circumstance, contention of the State Government that petitioner is entitled to incentive on the amount paid to the State Government as sales tax on the sale of clinker and not on the sales of cement is hereby rejected . Accordingly, I concluded that petitioner is entitled to get capital investment subsidy on the amount paid to the State Government as incremental sales tax on the sale of clinker and cement - Decided against Revenue. Whether petitioner is entitled to get capital investment subsidy on the amount paid to the State Government as additional incremental sales tax on the sale of cement produced both by the Chaibasa and Sindri units or only by Chaibasa Unit - Held that:- petitioner is knowing that according to industrial policy only those units are entitled to get incentive on payment of sales tax, which undertake expansion/ diversification/ modernization. From perusal of Annexure-9, it is clear that the State Government had written to the petitioner to clarify as to how it claims subsidy on the amount paid as additional sales tax to the State Government on the sale of cement by Sindri unit because it is the Chaibasa Clinker Plant which undertaken expansion/diversification/ modernization eligible for incentive and not the Sindri Grinding Pant. It appears that petitioner gave its reply to the aforesaid letter. Under the said circumstance, right to fair hearing before taking a decision for negativing the promise had been given to the petitioner - since the promise to pay aforesaid incentive on the sales tax to the Sindri Unit is against the Industrial Policy, petitioner can not claim the same on the basis of principle of legitimate expectation. Accordingly, aforesaid contention raised on behalf of the petitioner is hereby rejected - Decided against Revenue.
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