TMI Blog1984 (3) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... h was duly published in the Bihar Gazette, to grant various incentives for establishment of new large and medium industry in the State of Bihar in private sector. It was, inter alia, resolved in that resolution that during the initial period of production the Government would grant exemption from sales tax on all purchase of raw materials needed in the process of manufacture for a period of ten years from the date the unit went into production and exemption from multi-point sales tax at the first stage of sales from the manufacturer for a period of ten years from the date the unit went into production. Relying upon this resolution as contained in annexure 1 petitioner No. 1 took steps for setting up an industrial unit at Adityapur. It applied to the Government of India for an industrial licence for the manufacture of steel wire ropes in coils in that Unit. The Government of India granted letter of intent dated 26th July, 1976, to petitioner No. 1. It obtained loans both in Indian currency and foreign exchange from different financial institutions including banks. The Adityapur Industrial Area Development Authority (A.I.A.D.A.) allotted land to petitioner No. 1. It thereafter establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner No. 1 was entitled to incentives under the Sales Tax Act in terms of the statutory notifications issued under that Act. Petitioner No. 1 was not entitled to any benefit under any of the resolutions of the State Government. Statutory notifications under the Sales Tax Act or Ordinance of Bihar Finance Act were issued from time to time in public interest and in terms of such notifications the petitioner was allowed incentives for the period up to 31st March, 1979. It was not entitled to any exemption for ten years from the date it went into production as claimed by it. 4.. Before proceeding further to decide the issues involved, it is necessary to note that at the outset of the hearing of this case with regard to the validity of the order as contained in annexure 11 the learned Advocate-General conceded that in view of Kailash Roller Flour Mills v. Assistant Commissioner of Commercial Taxes [1981] 48 STC 297; 1980 BLJR 432 the order in annexure 11 that petitioner No. 1 would get exemption from the sales tax up to 31st March, 1979, cannot be sustained. The learned Advocate-General, submitted that as petitioner No. 1 went into production at its Adityapur unit on 21st March, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity within the State to the extent possible and to draw potential investors from outside, as well as to ensure that industrial units spread out to new areas and existing imbalance in the levels of development in different regions of the State were gradually overcome, the State Government decided to grant various incentives to large and medium industrial enterprises. Some of the incentives were that the Government would support the application for industrial licence to the concerned authorities under the Government of India, would give all reasonable assistance to the party concerned in securing the licence as well as the foreign exchange required for setting up the unit, would allot land in different industrial areas including Adityapur, would provide revolving fund for building materials, would give preference, for the purchase of stores, to the products of all large and medium industries located in Bihar, would give financial assistance and in order to help all new industries to compete with an established industry during the initial period of its production, would grant exemption from sales tax on all purchase of raw materials needed in the process of manufacture for a perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion dated 10th October, 1981, as contained in annexure 2/S, is concerned that has no application to the present case, because it was meant for industrial units which went into production between 1st October, 1979, to 31st March, 1984. It will thus appear that whereas in the resolutions the State Government resolved to give incentives from the sales tax to large industrial units for ten years from the date of production, under the notifications such exemption was provided for five years only. In paragraph 5 of the writ petition it has been stated that petitioner No. 1 relying on annexure 1 took steps for setting up an industrial unit at Adityapur and accordingly applied for an industrial licence to the Government of India. These facts have not been controverted in the counteraffidavit. The learned Advocate-General, however, submitted that before petitioner No. 1 applied for land to the A.I.A.D.A. and for the industrial licence, notification under the Sales Tax Act was issued on 14th March, 1974, by which under that Act exemption was given to large and medium scale industries for a period of five years from the date the industries started its production. He contended that the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to petitioner No. 1 that it would get the incentives decided from time to time by the State Government and required it to return the required pro forma which was enclosed with annexure 6 after properly filling up for getting the approval of the State-level committee. 10.. Respondent No. 3, the Managing Director, A.I.A.D.A., with reference to annexure 6 sent the application duly filled up by petitioner No. 1 to the Secretary, Department of Industry, for exemption in terms of annexure 1. From the perusal of this annexure it appears that the pro forma in which the applications were required to be filed for exemption was prepared in pursuance of annexure 1. By annexure 1/I dated 19th October, 1979, again a resolution of the State Government in the name of the Governor of Bihar was published in which reference was made to different resolutions of the State Government including annexures 1, A and 1/C and it was stated that the said resolution would remain in force up to 30th September, 1979. Yet another resolution was published under the order of the Governor of Bihar on 8th March, 1980, as contained in annexure 1/J, by which again the exemptions from sales tax legislation were provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure 7 it appears that the incentives referred to in annexure 6 were the incentives as stated in annexure 1. All the resolutions of the State Government were published in the Bihar Gazette. Some were issued in the name of the Governor of Bihar. That being the position, I am of the opinion that Motilal's case [1979] 44 STC 42 (SC); AIR 1979 SC 621 cannot be distinguished on facts, rather the petitioners are on a better footing in this case. With regard to the second part of the contention of the learned Advocate-General it is true that in Jit Ram's case AIR 1980 SC 1285 the Supreme Court differed with the proposition stated in Motilal's case [1979] 44 STC 42 (SC); AIR 1979 SC 621. Both, Motilal's case [1979] 44 STC 42 (SC); AIR 1979 SC 62 and Jit Ram's case AIR 1980 SC 1285 were noticed in Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. AIR 1983 SC 848 and with reference to Jit Ram's case AIR 1980 SC 1285 the Supreme Court observed as follows: "Jit Ram Shiv Kumar v. State of Haryana [1980] 3 SCR 689; AIR 1980 SC 1285 which slightly differs from the view taken by this court in the aforementioned decision at any rate would not help the appellant because it only lays dow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out by the Government and determine which way the equity lies." 14.. Relying on this the learned Advocate-General drew our attention to paragraph 3 of the counter-affidavit filed on 22nd December, 1983. Paragraph 3 of the counter-affidavit reads as follows: "That the statutory notification under the Bihar Sales Tax Act giving exemption of tax for 5 years and not for 10 years were issued in public interest. Due to increasing over draft and deficit budget of the state and due to shortage of resources for progressing development and welfare scheme, it was not possible to give exemption for 10 years." The public interest shown in this paragraphs was, therefore, increasing over draft and deficit budget of the State Government and due to shortage of resources for progressing development and welfare scheme. As already noticed, the State Government repeatedly adopted resolutions for giving incentives to large industrial units by way of exemption from sales tax for ten years and/or loan or exemption from purchase tax and loan equivalent to the amount paid as sales tax on the finished goods. In this case the period which have been brought to our notice within which the resolutions were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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