TMI Blog2017 (3) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of commercial production or till the date of completion of the said Scheme ie., 31st December 2005; whichever is earlier between the two, shall be considered eligible for the purpose of Incentives. However, in the Gujarati version of the Incentive Scheme, the expression “whichever is earlier between the two” is missing in case of Industrial Units having project cost exceeding ₹ 10 Crores. The aforesaid seems to be an inadvertent mistake in publication/typing - Nobody can be permitted to take undue advantage/ disadvantage of the beneficial Scheme due to inadvertent mistake in publication. In case of Industrial Units having project cost exceeding ₹ 10 Crores, it is mentioned that the assets acquired within a period of 18 months form the date of commencement of production, or till the completion of the said Scheme, shall be considered eligible for the purpose of incentives. Therefore, the submissions made on behalf of the petitioners that the assets acquired upto 11th April 2007 are required to be considered eligible for the purpose of incentive; if is accepted, in that case, the words/expressions “till the completion of the said Scheme” shall be meaningless. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mic development of Kutch region had come to a major halt, in an attempt to give impetus to the economic development and for creating better opportunities of employment and environment of Industrial Development, the respondent-State vide its Resolution dated 9th November 2001 announced a sales-tax incentive scheme known as, Incentive Scheme 2001 for Economic Development of Kutch District [hereinafter referred to as, the Scheme ] and thereby invited existing industrial undertakings and new industries to set-up industrial units in the said district by promising benefit of Sales-tax exemption or Sales-tax Deferment Eligibility Fixed Capital Investment under Section 49 [2] of the Gujarat Sales Tax Act, 1969. 2.2 That, the period of the Scheme was initially notified from 31st July 2001 to 31st October 2004 which came to be extended further by two Notifications dated 13th September 2004 and 7th January 2005 by which the applicability of the Scheme was extended upto 31st December 2005. 2.3 That, the petitioner-Company is engaged in manufacture of sponge iron, ferro alloys and SS/MS round, flat, angles and other structural steel pig iron. That, the petitioner decided to set-up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional tax of ₹ 1,93,16,671/=. Out of this tax liability, the remission of tax available on manufactured goods under Section 41 of the Act is only ₹ 7,65,46,403/=. It is the case on behalf of the petitioner that the respondents have not considered the expenses of ₹ 257.55 Crores which were incurred and paid upto 11th April 2007, instead considered the expenses of ₹ 213.58 Crores, being paid within 18 months from the date of commercial production ie. , 12th October 2005, which is absolutely unjust, improper and against the terms and conditions of the Incentive Scheme 2001. It is the case on behalf of the petitioner that the State Government/ respondents have considered the investment to the extent of ₹ 213.88 Crores incurred upto 31st December 2005 only. It is the case on behalf of the petitioners that as per the Scheme, more particularly Clause 3.8 thereof, even the investment made during the period of 18 months from the date of commercial production ie ., 12th October 2005 is required to be considered while granting the tax exemption benefit under the Scheme ie ., expenses of ₹ 257.55 Crores incurred and paid upto 11th April 2007 and inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of 18 months from the date of commercial production, the petitioner- Company is entitled to the benefits of Sales Tax exemption on the amount incurred/expenses incurred by the petitioners upto 11th April, 2007. It is submitted that the petitioner-Company had incurred expenditure of ₹ 257.55 Crores upto 11th April, 2007, and therefore, the petitioner- Company is entitled to the benefits of incentive/Sales Tax exemption on the Capital Investment made up to 11th April, 2007 ie. , ₹ 257.55 Crores. It is submitted that the respondents authorities are not justified in considering only the expenses of ₹ 213.58 Crores ie ., the investment made only upto 31st December, 2005. For the said reasons, Shri S.N. Soparkar, learned senior advocate appearing on behalf of the petitioners has heavily relied upon Clause 3.8 of the Scheme (Gujarati version). 5.1 It is further submitted by Shri Soparkar, learned Sr. Advocate for the petitioners that the third part of Clause 3.8 is with respect to the Industrial Units investing more than ₹ 10 Crores is concerned, it is in two parts ie ., (i) for the period upto 31st December, 2005 or (ii) where the assets are acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Civil Application No. 5638 of 2011 [ Shaifali Rolls Ltd. Anr. v. State of Gujarat Ors.] Shri Soparkar, learned Senior Advocate appearing for the petitioners has heavily relied upon decision of Division Bench of this Court rendered in case of Shaifali Rolls Ltd. Anr . (Supra). 5.3 It is further submitted by Shri S.N. Soparkar, learned Counsel for the petitioners that even otherwise in case of Pipeline Project, the State Government has extended the scheme up to 31st December, 2007. It is submitted that therefore also, when in case of Pipeline Project, the scheme has been extended up to 31st December, 2007, the expenses incurred by the petitioner Company at least upto 11th April, 2007; being the period of 18 months from the date of commencement of commercial production, the petitioners shall be entitled to the Sales Tax incentives, as the petitioners can be on the stronger footing than the Pipeline Project. 5.4 Shri S.N. Soparkar, learned counsel appearing on behalf of the petitioners has also heavily relied upon a decision of Divisional Bench of this Court rendered in case of Mahashakti Coke v. State of Gujarat, reported in (2012)55 VST 382 (Gujarat) in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the interpretation of the provisions contained by the said resolution has to be purposive in nature and all the provisions contained therein have to be read together in harmonious fashion. It is submitted that while doing so, the understanding on the part of the author, which is the State Government in the present case, as regard its scope and purview cannot be lost sight of. 6.2 It is submitted that the incentive Scheme in question was extended to all the Industrial Units regardless of any distinction like Small, Medium, Large Industrial Units vis-a-vis the project cost involved therein. That, the categories contained ie ., capital expenditure incurred and paid during the period of operation of the incentive Scheme would be taken into account. It is submitted that thereafter, in the initial draft of the resolution, Clause 3.8 thereof carried only Small scale, Medium scale and Large scale units without there being any mention as regards having project cost exceeding ₹ 10 Crores. It is submitted that it is only after further deliberations that provision of units having project cost exceeding ₹ 10 Crores have been incorporated in the said Clause 3.8. It is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been found that the petitioner company is entitled to the incentives on the investment made of ₹ 188.15 Crores, the Final Eligibility Certificate of ₹ 188.15 Crores has been issued. It is submitted that at that stage, no grievance was made by the petitioner at all. It is submitted that thereafter, for the first time, such a grievance has been made in the year 2015 which is nothing but an afterthought. It is submitted that thus from the very beginning, even the petitioner understood that they are entitled to incentives/Sales Tax exemption on the investment made upto 31st December 2005 only and consequently, they applied for Provisional Eligibility Certificate as well as Final Eligibility Certificate accordingly. 6.5 It is further submitted by Shri Kamal Trivedi, learned Advocate General that even the petitioners have not pleaded the case of promissory estoppel . It is submitted that it is not the case on behalf of the petitioners and so pleaded in the petition that at the time of making investment, even upto 12th April 2007, they considered Clause 3.8 and thereby considered that they shall be entitled to incentives/sales tax exemption on the investment made upto Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upto 11th April 2007 ie ., made during the period of 18 months from the date of commencement of commercial production is concerned, it is submitted that as such, in the present case, admittedly, the petitioners have started commercial production on 12th October 2005. It is submitted that therefore, case of the petitioners cannot be compared with Pipeline projects. It is submitted that the intention of the State Government to grant incentive/sales tax exemption benefit is very clear ie. , till 31st December 2005 or on investments made within 18 months from the date of commercial production; whichever is earlier of the two. It is submitted that therefore, the petitioner has rightly been denied the benefit of the Scheme on the investment/expenses incurred after 31st December 2005; though may be made within 18 months from the date of commencement of commercial production. 6.8 Making above submissions and relying upon the decision of the Supreme Court in the case of Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc ., reported in [2016] 4 SCC 1265 and another decision in case of Secretary, Ministry of Chemicals Fertilizers, Government of India v. CIPLA Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeding ₹ 10 Crores, which words though are there in case of Small Scale Industrial Units, Medium and Large scale Industrial Units. Therefore, it is the case on behalf of the petitioners that in case of Industrial Units having project cost exceeding ₹ 10 Crores, the assets acquired within period of 18 months from the date of commencement of commercial production or till completion of the Scheme ie ., 31st December 2005, shall be considered eligible for the purpose of incentives. Therefore, it is the case on behalf of the petitioner that as the date of commencement of commercial production in their case is 12th October 2005, all the expenses incurred by the petitioner- Company upto 11th April 2007 ie ., 18 months from the date of commencement of commercial production are eligible for grant of incentives. 12. On the other hand, it is the specific case on behalf of the State that in fact, the duration of the Incentive Scheme was upto 31st December 2005, and therefore, the incentive scheme was valid from 31st July 2001 to 31st December 2005 and from the beginning, the intention of the framers of the Scheme/State Government was that the assets acquired within a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nally, the Incentive Scheme in question was intended to be extended to all the industrial units regardless of any distinction like Small, Medium and Large Scale Units vis-avis the project cost involved therein, with a categorical condition that the project cost, i.e . capital expenditure incurred and paid during the period of operation of the Incentive Scheme, would be taken into account. This clearly shows as to what was intended by the State Government. However, thereafter, in the initial draft of the Resolution, clause No. 3.8 thereof carried only Small Scale, Medium Scale and Large Scale Units without there being any mention as regards the Units having project cost exceeding ₹ 10 Crore. It is only after further deliberation that the provision of the Units having project cost exceeding ₹ 10 crore came to be incorporated in the said clause 3.8. Though, the said provision was made subsequently by adding the Industrial Units having investment exceeding ₹ 10 crore, unfortunately, the qualifying condition _____ ______________, was inadvertently omitted to be mentioned. Thus, if one peruses the file and intention of the Government is to be culled out therefrom, it g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers have ever been given the benefits under the Incentive Scheme after the expiry of 31st December, 2005 even though the specified periods viz. 6 months, 1 year and 18 months, as the case may be from the date of commencement of commercial production in those cases, had spread over beyond the last date of the operation period of the said Incentive Scheme i.e. 31st December, 2005 (except pipe-line cases). 15. Nobody can be permitted to take undue advantage/ disadvantage of the beneficial Scheme due to inadvertent mistake in publication. 15.1 Even otherwise, it is required to be noted that even considering Clause 3.8 of the Scheme, in case of Industrial Units having project cost exceeding ₹ 10 Crores, it is mentioned that the assets acquired within a period of 18 months form the date of commencement of production, or till the completion of the said Scheme, shall be considered eligible for the purpose of incentives. Therefore, the submissions made on behalf of the petitioners that the assets acquired upto 11th April 2007 are required to be considered eligible for the purpose of incentive; if is accepted, in that case, the words/expressions till the completion of the said S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or till the completion of the Scheme ie ., 31st December 2005 [whichever is earlier between the two], shall be considered eligible for the purpose of grant of incentive and that is how, when the petitioners applied for Provisional Eligibility Certificate, they considered assets acquired only upto 31st December 2005 amounting ₹ 213.57 Crores. While submitting application for grant of Provisional Eligibility Certificate, the petitioners submitted a Certificate issued by Chartered Accountant with respect to the investment made upto 12th October 2005 ie. , ₹ 213.57 Crores and accordingly, Provisional Eligibility Certificate was issued, considering the investment made of ₹ 213.57 Crores only. It is also required to be noted that the said Provisional Eligibility Certificate is dated 12th September 2006. At this stage, it is required to be noted that even subsequently, while the petitioners applied for Final Eligibility Certificate, which was dated 29th April 2008, they claimed benefit on the investment made of ₹ 237.40 Crores ie ., the investment/ assets acquired upto 31st December 2005 only and accordingly, the State Government issued Final Eligibility Certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are treated equally and in case of all Industrial Undertakings/Projects, the assets acquired only upto 31st December 2005 are considered eligible for the purpose of incentive, the petitioners are not entitled to incentive on the assets acquired subsequently after commencement of commercial production or after 31st December 2005. 19. Now so far as reliance placed on the decisions of Division Bench of this Court in Special Civil Application No. 5638 of 2011 11768 of 2013 by the learned counsel for the petitioner is concerned, at the outset, it is required to be noted that in the case before the Division Bench, the controversy was with respect to investment/assets acquired upto 31st December 2005 only and even the pleadings in the first petition, being Special Civil Application No. 5638 of 2011 was also with respect to the assets acquired/ investment made upto 31st December 2005 only. No such case was pleaded before the Division Bench with respect to investment made during 18 months from the date of commencement of commercial production. As such, there was no controversy before the Division Bench with respect to the assets acquired/investment made after 31st December 2005 and mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onths from the date of commencement of commercial production. Under the circumstances also, the said decision shall not be applicable to the case on hand and/or the same shall not be of any assistance to the petitioners herein. 21. In view of the above and for the reasons aforestated, the present writ petition with respect to claim of the petitioners for incentive/sales tax exemption on the investment made/assets acquired after 31.12.2005, but made on or before 11.04.2007 ie., within a period of 18 months from the date of commencement of commercial production ie. , ₹ 257.55 Crores is hereby rejected. It is held that the petitioners are not entitled to the incentive/sales tax exemption on the total expenses/investment of ₹ 257.55 crores as claimed and are entitled for incentive/sales tax exemption on the investment made/assets acquired upto the date of commencement of commercial production ie ., 12th October 2005. 22. As observed hereinabove, so far as the prayer of the petitioners to extend the period of Sales Tax Eligibility Certificate for a further period of five years for un-utilized amount of ₹ 57.82 Crores, out of ₹ 188.15 Crores is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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