TMI Blog2007 (11) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... een adjudicated upon, therefore, the impugned order dated June 7, 2007 (annexure P 17) is liable to be set aside. For the reasons aforementioned, this petition succeeds. Order dated June 7, 2007 (annexure P 17) passed by HLSC in its 99th meeting [withdrawn the benefit of sales tax concession of ₹ 885.15 lacs, granted in favour of the petitioner-company pursuant to the decision of the HLSC that was taken in the 89th meeting, held on December 6, 2004 (P 17)] is hereby quashed and the order dated December 6, 2004 taken by HLSC in its 89th meeting is restored. - C.W.P. No. 12075 of 2007 - - - Dated:- 27-11-2007 - HON'BLE MR. JUSTICE M.M. KUMAR AND HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Mr. Akshay Bhan, Advocate, for the petitioner. Ms. Ritu Bahri, Deputy Advocate General, Haryana, for the respondent JUDGEMENT M.M. KUMAR J.- This petition filed under article 226 of the Constitution prays for quashing order dated June 7, 2007, passed by the Director of Industries and Commerce, Haryana, communicating the decision of the Higher Level Screening Committee (for brevity, the HLSC ), constituted under rule 28C of the Haryana General Sales Tax Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 12, Sector 3, IMT Manesar, Gurgaon, measuring 11250 sq. mtrs., was issued in favour of the petitioner-company by the Haryana State Industrial Development Corporation ( HSIDC ) (annexure P 5). Subsequently, on December 29, 1999 an agreement between the petitioner-company and the HSIDC was also executed. On January 31, 2000, the petitioner-company applied for approval of building plans of their industrial unit, which were duly approved by the HSIDC on February 18, 2000 (P 7 and P 8 respectively). On February 23, 2000, the petitioner-company was also issued a certificate of registration under the Haryana General Sales Tax Act, 1973 for manufacture and trading of auto parts (P 1). The manufacturing unit of the petitioner-company commenced commercial production with effect from September 29, 2000. As per stipulation laid down under the Industries (Development and Regulation) Act, 1951 read with Notification No. 477, dated July 5, 1991, issued by the Department of Industrial Development, Ministry of Industries, Government of India, New Delhi, the petitioner-company after coming into commercial production, filed its Industrial Entrepreneurial Memorandum (IEM) with the SIA, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaon-respondent No. 4, requiring it to appear before the HLSC along with documents on the date to be specified later (P 13). The observations of the sub-committee dated July 23, 2004 were also communicated to the petitioner-company, which reads as under: 1. IEM for unit at Manesar was obtained on August 4, 2000, i.e., after cut-off date of April 30, 2000. 2.. Unit is self-financed. In its 89th meeting held on December 6, 2004, the HLSC approved the case of the petitioner-company declaring its unit eligible under rule 28C of the Rules, for sales tax concession to the tune of ₹ 885.15 lacs for a period of 10 years from the date of issue of entitlement certificate for the manufacture of automobile accessories, namely, catalytic converters. On March 18, 2005, aforementioned decision of the HLSC was conveyed to the petitioner-company by the Director of Industries, Haryana (P 14). Pursuant to the decision of the HLSC, the Deputy Excise and Taxation Commissioner, Gurgaon-respondent No. 3 issued an entitlement certificate to the petitioner-company in form ST 72B, under sub-rule (8)(a) of rule 28C of the Rules, for a period of 10 years, i.e., March 28, 2005 to March 27, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed on the cut-off date (April 30, 2000). No departure from or relaxation of the conditions is permissible under the strict interpretation principle applicable to exemptions/exceptions. Accordingly, the explanation submitted is untenable and the benefit already granted is hereby ordered to be withdrawn. DETC, Gurgaon, shall proceed to implement the above order immediately. (emphasis Here italicised. added) The aforementioned decision of the HLSC has been communicated to the petitioner-company vide letter dated July 5, 2007 (P 17) by the Director of Industries and Commerce, Haryana, which is subject-matter of challenge in the instant petition. In the written statement filed on behalf of the respondents though factual position as pleaded by the petitioner-company in the petition has not been denied however, a preliminary objection has been raised asserting that the incentives/exemption/concession, etc., are in the nature of concession and do not confer any legally enforceable right upon the petitioner-company and it is not entitled to invoke the extraordinary writ jurisdiction. It has further been pointed out that a conference of Chief Ministers on Sales Tax Reforms w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n: Sh. Rajinder Arora, Manager (Taxation) and Sh. Mohit Malik, Advocate, appeared before the committee on behalf of the unit. This is a case of unit in pipeline. The committee took a decision in 89th meeting for calling for the supporting documents to establish that first SIA approval dated February 12, 1998 was taken for setting up unit in Haryana. The committee also asked the applicant to prove that the IEM obtained on August 4, 2000 has been taken for further expansion programme of the unit in Haryana. The committee decided to issue notice to the unit to show cause as to why its earlier decision be not reviewed. Thereafter, after due notice dated July 13, 2006, the HLSC in its 99th meeting held on June 7, 2007, decided to withdraw the sales tax concession. It has been asserted that the petitioner unit did not fulfill the first condition of unit in pipeline as prescribed under sub-rule (3)(o) of rule 28C of the Rules. Therefore, the case of the petitioner-company has rightly been declined by the HLSC. Mr. Akshay Bhan, learned counsel for the petitioner has argued that the case of the petitioner-company is covered by clause (o) of sub-rule (3) of rule 28C of the Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of review cannot be exercised by treating the same as an appeal in disguise. In that regard he has placed reliance on the judgments of the honourable Supreme Court in the case of Aribam Tuleshwar Sharma v. Aribam Pishak Sharma [1979] 4 SCC 389, Parsion Devi v. Sumitri Devi [1997] 8 SCC 715 and Haridas v. Usha Rani Banik [2006] 4 SCC 78. Exploring the argument that the power of review could be exercised only to correct an error apparent on the face of record, he has urged that such a power cannot be used for any other purpose. He has placed reliance on the judgments of the honourable Supreme Court in the cases of Smt. Meera Bhanja v. Nirmala Kumari Choudhury AIR 1995 SC 455, Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137 and Thungabhadra Industries Ltd. v. Government of Andhra Pradesh AIR 1964 SC 1372. He has further pointed out that the HLSC acts as a quasi-judicial authority and it has to follow the principles of natural justice by passing a detailed reasoned order. In that regard he has placed reliance on a judgment of this court in the case of Haryana Tubes Private Limited v. State of Haryana [1997] 105 STC 364 (P H); [1997] 115 PLR 21. Mr. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclusion that the same cannot be enforced by issuance of a writ of mandamus. After hearing learned counsel for the parties at great length and perusing the numerous documents on record, we consider it appropriate to first read the relevant parts of rule 28C, which are as under: (d) 'entitlement certificate' means a certificate granted in form S.T. 72-B by the concerned Deputy Excise and Taxation Commissioner; (e) 'existing unit' means an industrial unit which had come into commercial production before coming into force of this rule; (f) 'expansion' means an industrial capacity set up or installed during the operative period which creates additional production facilities for manufacture of the same product(s) as of the unit before expansion in which the additional fixed capital investment in plant and machinery made [within two years immediately preceding the date of commercial production of diversified capacity], exceeds 25 per cent of the fixed capital investment (gross block) of the unit before expansion at the same or new location; . . . (l) 'operative period' means the period starting from November 15, 1999 and ending on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or production capacity; (ii) failure to furnish security as required under clause (b) of subrule (10) of this rule; (iii) discontinuance of its business by the unit or closing down of its business for a continuous period exceeding 6 months except in case of fire, flood, other natural calamities, riots, strike or lockout which in the opinion of the committee concerned is beyond the control of the unit; (iv) violation of any of the conditions of this rule; (v) for any other sufficient reason to be recorded in writing: Provided that no order of cancellation of the entitlement certificate shall be passed without affording a reasonable opportunity of being heard to the affected unit. (b) A report made under rules 12(a) or 13(a) shall be taken up for consideration and decided within sixty days of its having been received by the member-secretary of the committee concerned. In case of delay, the entitlement certificate may be suspended by the Deputy Excise and Taxation Commissioner concerned, after hearing the unit concerned, for a period not exceeding ninety days during which the committee may ratify the suspension. On suspension of the entitlement certificate, the affected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir industrial unit is at New Delhi, Okhla Industrial Estate. But the representative appearing before the committee stated that the foreign collaboration was approved by the SIA and on that date they had no site to write down in the SIA approval. This approval was sent to their commercial office and the proposed site was also inadvertently shown on the office address. They further pleaded before the committee that it makes no difference they are registered with the competent authority before April 30, 2000. The representative of the unit stated before the committee that every approval was taken at the office address because they had no location for manufacturing in 1998. The second IEM obtained by the unit on date August 4, 2000 is relating to the acknowledgment made to the SIA after coming into the production. Though the unit came into commercial production after a month after filing of this IEM dated August 4, 2000. The Joint Director Industries apprised the committee that the SIA approval for foreign collaboration was also forwarded to the State of Haryana in the Directorate of Industries on dated April 1, 1999, which was confirmed by the Director of Industries (small and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit on August 4, 2000, which is acknowledgment made to the SIA. The second condition that the unit has arranged its land or premises by way of purchase, allotment, lease or rent also stands fulfilled as plot No. 12, Sector 13, IMT Manesar, Gurgaon was allotted to the petitioner as self financing unit and all finances were duly arranged by the promoters of the unit with their own sources much before April 30, 2000 which fulfilled the third condition. And the last condition that the unit was to start production has also been fulfilled as commercial production commenced from September 29, 2000. Therefore, we are of the considered opinion that the unit was fully eligible for grant of concession as unit in pipeline within the meaning of, clause (o) sub-rule (3) of rule 28C. Some controversy has been raised before the HLSC as also before this court with regard to the fulfilment of first condition namely that the unit was not registered with the department. It has come on record of the HLSC when it decided the case of the petitioner on December 6, 2004 that this unit has submitted two copies of IEM and first SIA approval was granted on February 12, 1998. It has become further clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have communicated any such decision to the petitioner. There is nothing on the record for us to believe and accept the aforementioned stand of the respondent. In fact in para 7 of the written statement, the factum of granting benefit to the petitioner unit by HLSC on December 6, 2004 in 89th meeting and its communication vide letter dated March 18, 2005 by the Director of Industries has been accepted. It has further been pleaded in the written statement that the benefit was wrongly given. There is world of difference between the claim that the petitioner unit on December 6, 2004 was only asked to prove that the IEM was issued for the State of Haryana on February 12, 1998 and no decision was taken and to claim that the decision was wrongly taken. In fact, this inherent conflict between the stand taken by the committee as reproduced in the impugned order (annexure P 17) clearly shows that irrelevant consideration has influenced the mind of the HLSC for withdrawing the benefits. In the aforementioned facts and circumstances, we are to consider as to whether respondent could have exercised the power of review as envisaged by sub-rule (15) of rule 28C which reads as under: An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overy of new and important matter of evidence which, after the exercise of due diligence was not within the knowledge of the person seeking the review or could not be produced by him at the time when the order was made; it may be exercised where some mistake or error apparent on the face of the record is found; it may also be exercised on any analogous ground. But, it may not be exercised on the ground that the decision was erroneous on merit. That would be the province of a court of appeal. A power of review is not to be confused with appellate power which may enable an appellate court to correct all manner of error committed by the Subordinate court. The aforementioned proposition that the review cannot replace the area occupied by the appellate court has again been accepted by the honourable Supreme Court in the case of Parsion Devi's case [1997] 8 SCC 715. Therefore, it has to be held that a review is by no means an appeal as disguised whereby an erroneous decision is reheard and corrected. Review lies only for a patent error as apparent from the face of record. Therefore, we find that the HLSC has admittedly made an attempt to correct erroneous decision particular ..... X X X X Extracts X X X X X X X X Extracts X X X X
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