TMI Blog2006 (12) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate in form E(96) declaring the petitioner-company to be eligible for all the sales tax incentives available under the IPR 1996 under the category of priority industry . The learned counsel for the petitionercompany further contends that while the said certificate holds good and has not been withdrawn, the sales tax authorities of Orissa have not accepted the certificate granted by the Director of Industries and consequently raised tax demand against the petitioner-company. The petitionercompany further submits that raising of such demand is illegal and therefore the following orders of assessment under the Central Sales Tax Act, 1956 and Orissa Sales Tax Act, 1947, being in gross violation of the certificate of eligibility to sales tax exemption granted by the Director of Industries, should be quashed/set aside. 1. CST assessment for the year 1999-2000 WP(C) No. 8952 of 2003 2. do. 2000-2001 WP(C) No. 1919 of 2004 3. do. 2001-2002 WP(C) No. 8604 of 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfil its objectives (vide Part II, page 19), claimed that the petitioner-company duly fulfilled all the objectives and therefore, it was issued with a certificate of eligibility both in form E(96) (annexure 3) as well as certificate of eligibility on sales tax concession on purchase of raw materials, machinery, spare parts, packing materials and finished products under IPR, 1996 (new units) in form II (annexure 4) issued by the Director of Industries, Orissa, Cuttack. Sri Ganguly further submitted that the certificates contemplated under the IPR, 1996 were in fact, issued to the petitioner-company under annexures 3 and 4 and remained valid as on date and the same have not been withdrawn. He further submitted that for the first time, the opposite parties have taken different stand in the counter-affidavit filed before this court on April 18, 2006 and in paragraph 13 thereof, claimed that the certificates had been issued to the petitioner on a mistaken notion , that the manufacturing of P.V.C. pipes from P.V.C. resins is a petrochemical industry. In this respect, Sri Ganguly, submitted that such stand of the opposite parties in the counter-affidavit is impermissible in law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after due examination of the scope of IPR 1996 and nature of the petitioner's industry had taken a decision that the petitioner's unit was a priority industry in terms of the IPR. In this respect Sri Ganguly submitted that the Industries Department, Government of Orissa had addressed a letter to the Commissioner of Commercial Taxes on May 20, 2004 regarding entitlement of the petitioner to the benefit of the exemption as a priority industry . In the said letter it was asserted that: the differential frame of reference of 'petro-chemicals' has further been examined at this end and therefore does not require further clarification in view of the clarification contained in this department letter No. 3380 dated March 23, 2004. Government in Industries Department have already accepted such industries as priority sector industries. M/s. Lingaraj Pipes Pvt. Ltd., Patia engaged in manufacture of PVC pipes comes within this category. Mr. Ganguly relying upon clause 24.2 of IPR, 1996 submitted that it was declared that the industries department shall be the nodal agency for its implementation and its interpretation of the IPR is final and binding on all concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties submitted that in order to invoke such principle, a person must act on such provision and alter his position. He contended that the petitioner has never pleaded nor established that he has been induced by the promise and altered his position. He further submitted that admittedly the petitioner commenced fixed capital investment since the year 1999 at a time when the notification dated July 26, 1996 was in force and it was the law as was existing in 1999. He, therefore, submitted that the petitioner having made a fixed capital investment with his eyes wide open and knowing fully the provision of law, therefore, ought not to be permitted to invoke the principle of promissory estoppel or legitimate expectation in the present case. In so far as issue of eligibility certificate in form E(96) is concerned, learned counsel for the opposite parties submitted that the said form is prescribed form for medium/large scale unit and the provision of the I.P.R. being crystal clear, the Director of Industries is not competent to issue the eligibility certificate contrary to the I.P.R., and the law. He submitted that the mistaken act or the mistaken interpretation of the Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under annexure 3 and in form No. II issued certificate of eligibility for sales tax concession on machinery, spare parts, raw materials, packing materials and finished products under IPR 1996 under annexure 4 dated March 29, 2001 declaring the petitioner-company eligible for exemption of sales tax for a period of seven years from the date of commercial production which is valid with effect from January 8, 2000 to January 7, 2007 for a maximum fixed capital investment determined at Rs. 2,69,97,437. (C) The Industries Department, Government of Orissa, issued clarification to the Commissioner, Commercial Taxes vide letter No. 3380 dated March 23, 2004 and reiterated the same vide its letter dated May 20, 2004 to the Commissioner, Commercial Taxes, clarifying that the status of the petitioner-company as priority industry has been accepted by the Industry Department and the petitioner-company is entitled to the exemption of sales tax under IPR 1996. (D) In view of the aforesaid facts and while the said certificate was issued in form No. E(96) in April 2006 counter-affidavit was filed on behalf of opposite party Nos. 2, 3 and 4 contending the following facts: That, it is hu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The exemption order had also been passed. It is not open to or permissible for the State Government to seek to deprive MRF of the benefit of tax exemption in respect of its substantial investment in expansion in respect of compound rubber when the State Government had enjoyed the benefit from the investment made by the MRF in the form of industrial development in the State, contribution to labour and employment and also a huge benefit to the State exchequer in the form of the State's share, i.e., 40 per cent of the Central excise duty paid in excess of the capital investment within the State of Kerala. The impugned action on the part of the State Government was found by the court to be highly unfair, unreasonable, and arbitrary and therefore the same was held violative of article 14 of the Constitution of India. The facts of the present case are similar to the facts of the case dealt with by the honourable apex court in MRF Ltd. [2006] 148 STC 225; [2006] 12 JT SC 244. In this case the petitioner-company has made substantial investment and the State Government has also enjoyed the benefit from the investment made by the petitioner-company in the form of industrial developmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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