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TMI Blog2016 (3) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... ner started commercial production on April 14, 1989 duly certified by the DIC. It is also averred, inter alia, that the eligibility certificate has been issued by the opp. party No. 4 to avail of sales tax, exemption on purchase of raw material, machinery and spare parts and sale of finished products for a period of five years, i.e., from April 14, 1989 to April 13, 1994 in accordance with the Finance Department Notification dated February 13, 1987 bearing SRO No. 83/87. It is stated that this exemption has been accepted by the assessing authorities vide annexure 1 series. After completion of assessment of sales tax under section 12(4) of the Orissa Sales Tax Act (hereinafter called "the OST Act") for the periods 1989-90 and 1990-91, the same has been accepted by the assessing authority towards exemption of sale of finished products. But later reassessment proceeding was drawn purportedly under section 12(8) of the Act on the plea that grant of exemption in assessment was irregular. The opp. party No. 3 after considering the case of the petitioner in reassessment proceeding dropped the proceeding by affirming the grant of exemption as correct one. It is further stated that opp. p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the benefit. It is observed illegally that the exemption of sale of the petitioner expires on April 13, 1994. Such order of opp. party No. 2 demanding to pay back refund for 1994-97 already received, has been agitated on several grounds. The petitioner being aggrieved by the order of the opp. party No. 2 preferred revision before the Commissioner of Sales Tax (O. P. No. 1) on different grounds, but the Commissioner of Sales Tax confirmed the order of the assessing officer and dismissed the revision. Since no notice was served while the revision order was passed, the petitioner claims that he has not been given reasonable opportunity to put his grievance. Thus, it is prayed to allow the petition and confirm the exemption of pulverizing unit of the petitioner to pay any tax on the self-same periods from 1994-95 to 1996-97. Hence the writ petition. Submissions: The learned counsel for the petitioner submitted that since the petitioner runs a sophisticated pulverizing unit and manufacturing various garam masala powders/curry powders and the General Manager of the DIC has allowed the exemption of sales tax under the IPR-1986, the impugned order of demand is wrong, illegal and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily they are spice production unit, for which the unit of the petitioner cannot be exempted from eligibility of sales tax. He further stated that although the petitioner claimed that the spice powders were prepared by using pulverizers, but preparation by any means will not take away the structure of finished products, which is not exempted from payment of sales tax. On the other hand, he submitted that the assessment order under section 12(4) of the OST Act and the subsequent orders are not correct, but he supports the impugned order passed according to law. In whole, he submitted that the suo motu revision proceeding purportedly started against the petitioner is legal and proper. According to him the assertion of the petitioner that he used the pulverizers for grinding the spices is immaterial because the spice production unit is not exempted from payment of sales tax beyond five years as per the IPR-1986. The unit of the petitioner is not under IPR 1989 for which benefit of seven years' exemption is not applicable to the petitioner. The petitioner has already availed of the benefit for five years under IPR-1986 and he has failed to show any document stating that the DI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en accorded PMT Regn. No. 15/04/0657/PMT/SSI, dated June 7, 1989, August 11, 1989 and February 7, 1990 for manufacture of the following finished products. The unit has been registered under the OST Act, 1947 bearing regn. Certificate No. CU-II-4663, dated December 29, 1987 valid with effect from December 29, 1987 and CST Act, $b$ 1956 bearing regn. No. CUC-ii-891, dated December 29, 1987 valid with effect from December 29, 1987. SI. No. Name of the finished products to be exempted Quantity/value 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Haladi powder Dhania powder Jeera powder Chilly powder Qurry powder Garama masal powder Black pepper powder Black salt powder Panchu phutan Amchur powder Sambar powder 4,54,200 kgs 2. The unit has started fixed capital investment after April 1, 1986 and has gone into commercial production on April 14, 1989. 3. The unit is a small-scale continuing unit of 1986 Policy as defined in the IPR-1989 and is eligible for exemption from payment of sales tax on sale of its finished products for a period of 7 (seven) years from the date of commercial production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit. The General Manager, vide his letter No. 2303, dated April 10, 1992 clarified that the said concern is not an ordinary spices grinding unit but a pulverising unit that functions with a pulveriser fitted with a blower integrator and dust collector. From the aforesaid relevant portion of the order passed by the assessing officer relying upon the contention of the petitioner to the effect that the unit of the petitioner is pulverizing one, as it has been clarified by the General Manager in his letter No. 2303, dated April 28, 1992 that the unit of the petitioner is not an ordinary spice grinding unit but pulverizing unit which functions with a pulverizer with a blower interrogator and its collector. Moreover the assessing officer relying upon the Finance Department notification dated August 16, 1990 vide annexure 11 to the effect that the exemption of sale tax on the finished product has been extended up to seven years from the date of commercial production of the petitioner. It is true that the clarification made by the General Manager shall not be questioned but such letter is not filed in this case. Moreover, the pulverizer is not an ordinary spice grinding unit as clarifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to which it has been certified that the unit is eligible for exemption from payment of sales tax on sale of its finished products for a period of five years from the date of its commercial production as per IPR 1986. It is also noticed from purchase bill bearing No. 62, dated February 11, 1988 that the dealer has purchased a pulverising unit at a cost of Rs. 50,190 from M/s. Jayems Engineering Co. (P) Ltd., Calcutta. After observing the same the Assistant Commissioner of Sales Tax dropped the proceeding initiated under the relevant provision of the Act and Rules thereof for the assessment years 1989-90 and 1990-91. The concerned Assistant Commissioner of Sales Tax went on the footing that the pulverizing units were eligible for tax exemption pursuant to the notification dated August 16, 1990 and as such eligible to continue the same under IPR 1989. This order relates to years 1989-90 and 1990-91 but does not relate to the disputed years of 1994-95 and 1995-96, against which relief has been claimed, therefore, annexure 2 has no strength to support the petitioner. On May 7, 2005 vide annexure 6 the suo motu revision notice under section 23(4)(a) of the OST Act read with rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 38 Nos. of industries to the ineligible List and according to SI. No-51 of the said List pulverising units are excluded from tax exemption list. So by 29/ 04/92 both spice making unit and pulverising units are excluded from tax exemption on sale of its finished products for a period of five years from the date of commercial production as per entry 30FF (pre amended) of tax-free list of CST rate chart. Since this unit has started commercial production from April 14, 1989, the period of exemption on sale of finished products expires on April 13, 1989, and no exemption is available thereafter. Hence, allowance of exemption beyond April 13, 1994 is erroneous, irregular and against Revenue. It appears that the concerned officer has observed clearly in the aforesaid paras that the unit of the petitioner was spice manufacturing unit and also it is filtered that the period of exemption of sale of finished products is five years under IPR 1986 and it has expired on April 13, 1994. Hence the concerned Sales Tax Officer disallowed the exemption granted to the petitioner on finished products for the years 1994-95, 1995-96, 1996-97 amounting to Rs. 42,64,754. On going through the detailed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame as 'spices' even though the claim of the petitioner is that he has used sophisticated machinery for pulverisation. The production/manufacture by the pulverising unit is spices and is being sold as spices in the market. Both the spice making industry and/or the pulverising unit was declared ineligible by the notification issued by Government by F. D. Therefore, the claims of the petitioner that on the strength of the 'footnote' it will continue to enjoy exemption of additional two years are unsustainable. The incentives envisaged under IPR 1989 has been abridged/modified/ enlarged as per the aforesaid guidelines issued by Government in F. D. placing clearly the spice making industry and subsequently pulverising unit beyond the pale of exemption of sales tax. Further the intention of the 'foot note' is not to deny the incentive to industrial units which have made investment pursuant to a promise or representation made in IPR-1989. But the fact of the appellant is that it has made investment during IPR-1986 and has not made any investment under IPR-89. Therefore, there is no case for application of the 'foot note' to the notification dated April 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary 20, 2007 (annexure 9) passed by the Commissioner of Sales Tax, Cuttack (O. P. No. 1), it is abundantly clear that SSI unit of the petitioner was spice making unit but subsequently used pulverizer to prepare spices but the finished products remained the same and the sales tax imposed is exempted on the finished products which do not undergo any change. Beyond the relevant portion as extracted above, the appellate authority has also gone into the depth of the interpretation of the industrial unit and also other aspects of the case to unveil the real truth. It is clear from the impugned order that IPR-1989 is not at all applicable to the facts of the case of the present petitioner and his case is governed under IPR-1986 and IPR-1986 is clear to the effect that the incentive can be availed of for exemption of the payment of sales tax for a period of five years and it has been availed of as observed in the impugned order, that is from April 14, 1989 to April 13, 1984. So far as the footnote to the notification dated April 28, 1992 (annexure 12) is concerned, the exemption will not be available to the petitioner as the said industrial unit of the petitioner is not covered under IP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id case. So the said decision will not be of any help to the case of the petitioner. On the other hand, learned counsel for the Revenue has cited decision of this court in Mansfield Electronics v. State of Orissa in OJC No. 4153 of 1990 decided on May 1, 1992 where the question of exemption of manufacturing black and white television was considered. There this court held that an exemption which was granted by one notification to remain operative for a period of time as specified in that notification, would continue to remain in force that period is over irrespective of the fact as to whether the notification is subsequently amended by abridging the period exemption. Since in the instant case IPR- 1986 did not extend any time of exemption but limited to five years and the petitioner has availed of the same, the question of extension for two years under abridge notification dated August 16, 1990 (annexure 11), cannot be extended under IPR-1989 to the petitioner. So the decision cited by the learned counsel for the Revenue is not applicable to the facts and circumstances of the present case. As such the point for determination goes in favour of the Revenue. Conclusion: In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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