TMI Blog2007 (12) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... and first appellate orders in annexures 3A, 3B, 3C, 3D, 3E, and 3F as well as the second appellate order in annexure 3G and declare that the petitioner is entitled to avail the sales tax exemption in accordance with the IPR, 1996. - W.P. (C) No. 2976 of 2003 - - - Dated:- 21-12-2007 - DAS B.P. AND SAMANTARAY A.K. , JJ. The judgment of the court was delivered by B.P. DAS J. The petitioner, M/s. Rishabh Electricals Pvt. Ltd., has filed this writ petition under articles 226 and 227 of the Constitution of India with a prayer to (1) declare that the petitioner-industry is entitled to sales tax exemption in view of entry 43A of the Finance Department Notification dated July 26, 1996, (2) to direct the opposite parties to grant sales tax exemption to the petitioner as per the specific provision made in this regard in the Industrial Policy Resolution, 1996 and (c) to declare that the petitioner-industry being a priority industry is entitled to sales tax exemption. The petitioner claims that it is a beneficiary under the Industrial Policy Resolution, 1996 (hereinafter IPR 1996 ) issued by the State Government, which provided for certain incentives to different categories o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent brought about amendments in different entries. Entry 42A and entry 43A were introduced on July 26, 1996 to give effect from March 1, 1996. In entries 42A and 43A, there are three columns and second column indicates what are exempted and to whom it shall be available. Entry 42A relates to new small-scale industrial units whose capital investment had commenced on or after March 1, 1996 and also extended retrospectively to such industrial units where fixed capital investment had commenced after April 1, 1995 but before March 1, 1996, also to be entitled, provided they surrendered/refunded the sales tax incentives already availed, if any, under the Finance Department Notification. Entry 43A was for a similar situation for new, medium and large scale industry certified. It also extended retrospectively as in entry 42A where the investment of the industries commenced after April 1, 1995 but before April 1, 1996 provided they disgorge any benefit obtained on an earlier notification, i.e., IPR, 1992. The third column of the same indicates the date from which the benefit shall be given for purchase of raw materials, machineries, spare parts and packing materials and on sale of finished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t collected the same. The assessing authorities also made assessments in annexure 3A series for the periods 1999-2001 and intimated the NALCO, opposite party 9 that the petitioner was not entitled to purchase raw materials tax-free, for which NALCO refused to effect sale of raw materials without payment of tax and withheld a sum of Rs. 1.03 crores paid by the petitioner for the said purpose. Added to this, the Assistant Commissioner issued notices and revised the demands suo motu for the period 1999, which forced the petitioner to approach this court. When the petitioner failed in all its efforts to convince the authorities, it filed this writ petition on the ground that it is the victim of hostile discrimination as the benefits granted to it have been snatched away without any authority by the opposite parties and prays for a direction to the opposite parties to grant the benefits in terms of IPR, 1996, which says that for all priority industries the period of exemption shall be extended by two additional years and there shall be no limit of such exemption during the eligibility period. Accordingly, along with other prayers, a prayer is made by the petitioner to quash the orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment fall within the category of medium scale, which is the basis for classification of industries in terms of the Industries (Development and Regulation) Act, 1951. Now from the facts narrated above, the question that falls for determination of this court is whether the petitioner industry is to be treated as a priority industry under IPR, 1996 so as to be eligible to avail the incentives of exemption of sales tax. In order to resolve the aforesaid issue, it is necessary to have a look at IPR 1996. Clause 2.4 in Part II of the IPR, 1996 defines fixed capital investment thus: Fixed capital investment means investment in land, building, plant and machinery and other equipments of permanent nature. Sales tax exemptions have been provided under the head sales tax in paragraphs 5.1 and 5.6, which are relevant for the present purpose, stipulate: 5.1 Subject to operational guidelines, instructions and procedure, sales tax incentives shall be allowed after the unit has gone into commercial production and from the date of commercial production. 5.6 All new small, medium and large scale industrial units will be eligible for exemption/deferment of sales tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew our attention to the decision rendered by this court in Hi-Tek Powercon [2008] 14 VST 379 (Orissa); [2007] 103 CLT 658, in which this court relied upon the decision of the apex court in Validal Chemicals Ltd. v. State of Andhra Pradesh [2005] 142 STC 76; [2005] 6 SCC 292; AIR 2005 SC 3073. Mr. Ashok Mohanty, the learned Senior Standing Counsel (C.T.) appearing for the Finance Department as well as the Commercial Taxes Department, relied upon various decisions including the decision in Manickam and Co. v. State of Tamil Nadu [1977] 39 STC 12 (SC) at page 17 and submitted that the word all in clause (ii) of third proviso to entry 43A includes only those priority industries which fall under clause (iii) and not under any other category of industries. All these arguments advanced on behalf of the opposite parties go futile in view of the decision rendered by this court in Hi-Tek Powercon [2008] 14 VST 379 (Orissa); [2007] 103 CLT 658, wherein it was held that: . . . The expression 'all' appearing before 'priority industries' in the proviso to entry 43A(1)(b) is significant. It is clear that all priority industries whether, small, medium or large, would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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