TMI Blog2003 (4) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner elsewhere. Petitioner being a new medium scale industrial unit was entitled to sales tax exemption on the products manufactured by it for a period of seven years from the date of commencement of commercial production based on the investments made in building, plant, machinery, etc., under exhibit P2 notification. The petitioner started commercial production on March 31, 1995 and based on petitioner's application sales tax exemption was also granted on the investments made vide exhibit P3 proceedings dated December 19, 1997. The total sales tax exemption granted was for Rs. 2,65,70,965 and the period of exemption was from March 31, 1995 to March 30, 2002. However the grievance of the petitioner is against disallowance of sales tax exemption for additional investments made in the setting up of scrap iron melting unit for making iron ingots which is the raw material for manufacture of iron rods and bars. According to the petitioner the additional investments under the Backward Integration Scheme will also qualify for sales tax exemption in terms of exhibit P2 notification. However, the third respondent disallowed petitioner's claim for sales tax exemption on additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment incentives such as financial assistance, concession in electricity tariff, sales tax exemption, etc. When a comprehensive notification is issued dealing with various subjects, it is not possible for the Government to refer the provisions of one statute alone and therefore so far as withdrawal of sales tax exemption is concerned, exhibits P8 notification should be taken to have been issued under section 10(3) of the KGST Act and will have the effect of amending exhibit P2 and going by the above decision of the Supreme Court, the petitioner's argument to the contrary cannot be sustained and therefore I reject this contention. Petitioner has also relied on the decision of the Supreme Court in K.M. Chikkaputtaswamy v. State of Andhra Pradesh (1985) 3 SCC 387 for the proposition that notification granting exemption cannot be cancelled or withdrawn, except by issuing another notification. In this context, there is no dispute that exhibit P8 was published by the Government in the gazette eventhough sub-section (3) of section 10 is not referred to therein. I do not think petitioner's contention can be accepted particularly in view of the decision of the Supreme Court in Pournami Oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision which gives more than one month's time from the date of notification to industries to complete the additional investments and claim the benefit on such additional investments to get the benefit. So far as the petitioner is concerned, petitioner cannot have any grievance because the petitioner's all investments were granted exemption vide exhibit P3 proceedings and disallowance is only in respect of additional investments made after July 1, 1995, that is two years after the publication of the notification disabling industries in the negative list from claiming exemption and incentives on such additional investments. In fact it is pertinent to note that petitioner made additional investments in plant and machinery under expansion/diversification scheme only after power intensive units were brought under the negative list vide exhibit P8 notification. Therefore the petitioner which made additional investments knowing fully well that power intensive units are not entitled to sales tax exemption on such additional investments cannot put forward this contention. In fact the benefits of exhibit P10 clarification is already granted to the petitioner because the petitioner was allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnected load less than 2,500 KVA but cost of power is more than 25 per cent of the cost of production are also coming under negative list. (d) The units having total connected load of less than 2,500 KVA and also cost of power less than 25 per cent of the cost of production will not come under negative list. According to the petitioner, the State Level Committee has rejected the petitioner's claim based on the clarification, which should not be applied to the petitioner. In support of this contention petitioner has produced statement prepared by the Auditor on the cost of production showing the cost of production attributable to power charges below 25 per cent of the actual production cost. The activity of the petitioner is melting iron scrap in electric furnace to make ingots and to draw up iron rod and bars from ingots by issuing power. It is a very strange proposition that the cost of conversion with the sole aid of power attributable to power charges is less than 25 per cent of the actual production cost. Another interesting aspect is that the electricity tariff rate applied by the petitioner in this accounting jugglery on production cost is the pre-1992 tariff. Anyhow th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t P8 and the meaning of exhibit P8 is the same even without the clarification. Therefore the petitioner's contention on this also is not acceptable. 8.. The petitioner has also relied on the principle of promissory estoppel and relying on many decisions including the decision of the Supreme Court in ITC Bhadrachalam Paperboards v. Mandal Revenue Officer, Andhra Pradesh [1998] 110 STC 590 the petitioner contended that since the petitioner is registered before exhibit P8 notification, petitioner is entitled to full benefit under exhibit P2. In other words, petitioner cannot be disallowed sales tax exemption on additional investments made. I do not think, there is any violation of principle of promissory estoppel at least so far as the petitioner is concerned. The petitioner is granted sales tax exemption vide exhibit P3 dated December 31, 1997 for all investments made till the industry commenced commercial production. In fact petitioner came under the negative list of industries only after the petitioner made additional investments after July 1, 1995. The additional investments were made by the petitioner after being well aware of the fact that by virtue of exhibit P8, the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
