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2017 (5) TMI 377 - GUJRAT HIGH COURT

2017 (5) TMI 377 - GUJRAT HIGH COURT - TMI - Benefit of Sales Tax Exemption - Notification dated 28th July 2016 - exemption limit - Eligibility Certificate - economic development of District of Kutch - investment in purchase of assets - relevant date of investment - typing error in Gujarati version - interpretation - Whether the petitioner-Company is entitled to Incentives/Sales Tax Exemption under the Scheme on the investment made/expenditure incurred after 31st December 2005, but within a peri .....

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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 - even the petitioners also understood that the assets acquired within a period of 18 months from the commencement of commercial production or till the Scheme ends on 31st December 2005 [whichever is earlier between the two] shall be considered eligible for the .....

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ction or after 3.12.2005 - claim of petitioner rejected. - Whether the petitioner-Company is entitled to Incentives/Sales Tax Exemption under the Scheme on the investment/expenditure incurred after 31st December 2005 with respect to Phase II project? - Held that: - only those Units/Industries/Projects which had not gone in production before 31st December 2005 are considered as pipeline projects. In the present case, the petitioner-Company had already gone in production w.e.f 27th December 20 .....

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hat: - the petitioner-Company is entitled to the benefit of Incentive Scheme/Sales Tax Exemption on the expenses incurred/investment made on purchasing the land, constructing building and installing the plant and machineries prior to 31st December 2005 but the payment might have been made subsequently ie., after 31st December 2005 - partly decided in favor of petitioner. - Petition dismissed - decided partly in favor of petitioner. - SPECIAL CIVIL APPLICATION No. 16977 of 2016 - Dated:- 2-5- .....

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ondent no. 4-Joint Industries Commissioner [Incentives], Gandhinagar and to direct the respondents herein to grant the Final Eligibility Certificate to the tune of the actual project cost of ₹ 94,49,84,000/=, and to direct the respondents to grant benefit to the petitioner no.1- Company in terms of the Notification dated 28th July 2016 [Annexure K ]. 2. Facts leading to the present Special Civil Application in nutshell are as under :- 2.1 That, on account of devasting earthquake which shoo .....

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fter 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 7 .....

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s granted on 13th July 2005. That, the petitioner-Company commenced the commercial production with effect from 27th December 2005. That thereafter, the petitioner applied for grant of provisional Eligibility Certificate on 29th March 2007 on the investment made prior to the date of commencement of the commercial production ie., 27th December 2005/31st December 2005. That, the petitioner-Company came to receive the Provisional Eligibility Certificate on 29th March 2007, treating the eligible inve .....

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oner-Company produced a Certificate of Chartered Accountants. However, the authorities treated the eligible investment to the tune of ₹ 37.67 Crores only instead of ₹ 47.25 Crores [rounded off]; as claimed by the petitioners. That thereafter, after verification of the plant of the petitioner-Company by the Inspection team, the authority found that the petitioner-Company was eligible for ₹ 28.73 Crores to avail of Sales-tax Incentives. Therefore, the office of the Industries Com .....

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that the eligible investment in the case of the petitioner no.1-Company was fixed at ₹ 28.73 Crores, relying upon the report of the Joint Team and that the additional investment cannot be considered for the purpose of grant of incentive under the Scheme. Therefore, the petitioners approached this Court by filing Special Civil Application No. 5638 of 2011 challenging the decision of the respondent in granting the Eligibility Certificate to the tune of ₹ 28.73 Crores only and also pra .....

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, other than those made under the head GEB deposit, second hand indigenous machinery and furniture, office equipments, etc., on the basis of documents made available by the petitioner and those evidences to be further made available within four weeks of the said order. The Division Bench also directed the respondents to re-look at the request made for considering the investment made under Phase II of the Undertaking; particularly for production of forging steel and only if, the petitioner-Compan .....

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made after 31st December 2005, but within the period of 18 months from the date of commencement of the commercial production nor any grievance was made and/or claim was made with respect to Phase-II project ie., for production of forging steel. 2.5 It appears that thereafter, the High Power Committee constituted by the State took a decision on 24th January 2013 to rejecting the claim of all the Units requesting to consider their investment made beyond the period of 31st December 2005. That there .....

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₹ 3.58 Crores as investment and payments made upto 31st December 2007. However, as no decision was communicated, the petitioner- Company preferred another writ petition, being Special Civil Application No. 3817 of 2016 seeking direction to grant Final Eligibility Certificate to the tune of actual project investment of ₹ 94.49 Crores; including its claim to consider investment made in Phase-II and forging steel as also to consider the investment made after 31st December 2005. That, b .....

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ommunicated to the petitioners that the Final Eligibility Certificate granted was proper and no additional amount is required to be granted. 3. Feeling aggrieved and dissatisfied with the order/ communication dated 30th July 2016, the petitioners have preferred the present Special Civil Application praying for issuance of appropriate writ, order directing the concerned respondents to grant Final Eligibility Certificate to the tune of ₹ 94,49,84,000/= and to grant the benefit to the petitio .....

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fication dated 28th July 2016 is absolutely bad in law and contrary to the decision of the Division Bench of this Court dated 13th January 2012 passed in Special Civil Application No. 5638 of 2011 and the Order dated 30th June 2016 passed in Special Civil Application No. 3817 of 2016. It is further submitted by Shri Soparkar, learned Sr. Advocate appearing on behalf of the petitioners that while passing the impugned Order dated 30th July 2016, the respondents have failed to comply with the direc .....

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is further submitted by Shri S.N Soparkar, learned counsel for the petitioners that even otherwise, the impugned decision is based on misreading and misinterpretation of Clause 3.8 of the Scheme. 6.3 Shri S.N. Soparkar, learned counsel appearing on behalf of the petitioners has vehemently submitted that the case of the petitioners will fall under the third category of Industrial Units; as mentioned in Clause 3.8 of the Scheme ie., the Industrial Units having project cost exceeding ₹ 10 Cr .....

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acquired within the period of 18 months from 12th October, 2005; being 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 total expenditure of ₹ 94.49 Crores upto January 2011, and therefore, the petitioner- Company is entitled to the benefits of incentive/Sales Tax .....

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ate 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 acquired within a period of 18 months from the date of commencement of commercial production. It is submitted that in the first category ie., in case of Small Industrial Units, the assets acquired upto the period of six months from the date of commencem .....

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no such words are used whichever is earlier between the two - in case of Industrial Units having project cost exceeding ₹ 10 crores. It is submitted that in case of industrial units having project cost exceeding ₹ 10 crores, the words, whichever is earlier between the two are missing, and therefore, the assets acquired within the period of 18 months from the date of commencement of production or till the completion of the said scheme, shall be considered eligible for the purpose of .....

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benefits on the total expenditure of ₹ 94.49 Crores, which are incurred and paid up to 27th June 2007, instead of ₹ 37.67 Crores, being the period of 18 months from the date of commercial production. 6.5 It is further submitted by Shri S.N. Soparkar, learned Counsel appearing on behalf of the petitioners that in the present case, even the petitioners are entitled to the incentive on the investment made in Phase II of the undertaking, particularly for production of forging steel by tr .....

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in Phase II of the undertaking, particularly for production of forging steel. It is submitted that therefore, the impugned action of the respondents and the Final Eligibility Certificate issued considering investment eligible for incentive under the Scheme only upto 31st December 2005 is absolutely illegal and contrary to the Scheme, as amended from time to time and even contrary to the direction issued by this Court in Special Civil Applications No. 5638 of 2011 and 3817 of 2016. It is further .....

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ground that the entire plant and machinery etc., was purchased and/or acquired prior to 31st December 2005, but part payment was made after 31st December 2005. It is submitted that by passing the judgment and order in Special Civil Application No. 5638 of 2011, Division Bench of this Court specifically did approve the same and directed the respondents to re-look at the request and consider the investment made under Phase II of the Undertaking; particularly for production of forging steel. It is .....

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1999] in support of his submission that with respect to plant and machinery installed prior to 31st December 2005, but for which the actual payment was made subsequently, the petitioners shall be entitled to the benefits of incentives under the Scheme on such investment. It is further submitted by Shri Soparkar, learned counsel for the petitioners that in the present case, the respondents have not considered the investment on purchase of land, building, plant and machineries on both accounts ie. .....

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ents made on the properties acquired prior to 31st December 2005, but its payment made subsequently ie., after 31st December 2005. It is submitted that any Scheme and/or Statute is required to be construed/interpreted purposively to give effect to the legislative intention of the Scheme and to the purpose and spirit of the enactment so that no absurdity or practical inconvenience may result and the legislative exercise and its scope and object may not become futile. In support of his above submi .....

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fs, as prayed for. 7. The present petition is vehemently opposed by Shri Kamal B. Trivedi, learned Advocate General appearing for the State submitted that in the facts and circumstances of the case, the grant of benefit of incentives as well as Sales Tax exemption to the petitioner-Company on the Capital Investment incurred upto 27th December 2005 is absolutely just, proper and legal and in consonance with the Scheme. It is further submitted by Shri Kamal Trivedi, learned Advocate General that a .....

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n printing in Gujarati version. He has submitted that in the English version, which is referred to in the Additional Affidavit-in-Reply, it has been specifically mentioned that in case of Industrial Units having project cost exceeding ₹ 10 Crores, the assets acquired within the period of 18 months from the date of commencement of production or till the completion of the said Scheme [whichever is earlier than the two], shall be considered eligible for the purpose of incentives. It is submit .....

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interpretation of the provisions contained in the said resolution. It is submitted 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. 7.2 It is submitted that the ince .....

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ithout there being any mention as regards having project cost exceeding ₹ 10 Crores. It is submitted that it is only after further deliberations that the provision of units having project cost exceeding ₹ 10 Crores have been incorporated in the said Clause-3.8. It is submitted that though, the said provision was made by adding the words exceeding ₹ 10 Crores, unfortunately, the condition whichever is earlier between the two was inadvertently omitted to be mentioned. It is submi .....

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dium Industrial Units and the Large Industrial Units and Units having project cost exceeding ₹ 10 Crores will be considered for the respective specified period from the date of commencement of the production or completion of the Scheme whichever is earlier. 7.3 It is further submitted by Shri Kamal Trivedi, learned Advocate General appearing on behalf of the respondent-State that as such everybody; including the petitioner understood that the capital investment made only upto 31.12.2005, o .....

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tioners even applied for Provisional Eligibility Certificate only with respect of expenses incurred upto 31.12.2005 ie., ₹ 47.25 Crores. It is further submitted that even thereafter also, when in the year 2008, the petitioners applied for Final Eligibility Certificate, the petitioners applied for the same for the investment made upto 31.12.2005 ie., ₹ 47.25 Crores. 7.4 It is submitted that, therefore, the said application for Final Eligibility Certificate, with respect to investment .....

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ion No. 5638 of 2011 for quashing and setting aside the Final Eligibility Certificate dated 20th July 2009 with a direction to consider its actual investment to the tune of ₹ 47.25 Crores made with the grant of incentive benefits to that effect. It is submitted that thereafter for the first time at the time of hearing of Special Civil Application No. 5638 of 2011, the petitioner Company came out with the averment of its total investment of ₹ 94.49 Crores and not ₹ 47.25 Crores .....

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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 30th April 2007, they considered Clause 3.8 and thereby considered that they shall be entitled to incentives/sales tax exemption on the investment made beyond the the period of 31.12.2005, and therefore, they made the investment. It is submitted that therefore, in the present case, there is no question of applying the principles of promissory estoppel. 7.6 Now so .....

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to interpretation of Clause 3.8 of the Scheme and/or to consider whether the Industrial Undertaking which had made investment within the period of 18 months from the date of commencement of commercial production [beyond 31.12.2005] are entitled to the incentive/sales tax exemption on the above or not. It is, therefore, submitted that decision is required to be considered in light of the controversy in the petition, and therefore, any observations made dehors the controversy in the petition shal .....

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n Bench in the case of Saifali Rolls Limited & Anr. [Supra] is read as a whole, there is no specific finding given by the Bench on the aforesaid aspect. It is submitted that therefore, the decision of the Division Bench in the case of Saifali Rolls Limited & Anr. [Supra] shall not be applicable on the facts of the case on hand. 7.7 It is further submitted by learned Advocate General that so far as submissions made on behalf of the petitioners that in the case of Pipeline projects, the St .....

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e 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 31.12.2005 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 with .....

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e to get the incentives on such investment made upto 31st December 2007 is concerned, it is submitted that the aforesaid has no substance. It is submitted that even as per the policy, once the commercial production has started, there is no question of considering the Unit/Industry as a pipeline project. There is nothing like dividing the project phase-wise. It is submitted that what can be considered the pipeline project is very much clear. It is submitted that therefore, Phase-II of the Project .....

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oners. 20.1 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 & Ors., reported in [2003] 7 SCC 1 [on interpretation of Statute and/or Resolution and/or Scheme] and yet another decision in case of Afcon Infrastructure Limited v. Nagpu .....

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der the Scheme on the investment made/expenditure incurred after 31st December 2005, but within a period of 18 months from the date of commencement of the commercial production ?; [2] Whether the petitioner-Company is entitled to Incentives/Sales Tax Exemption under the Scheme on the investment/expenditure incurred after 31st December 2005 with respect to Phase II project ?; and [3] Whether the petitioner-Company is entitled to Incentive/Sales-tax exemption under the Scheme on the plant and mach .....

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On the other hand, it is the case on behalf of the State that the Incentive/Sales-tax exemption is available only on the investment/ expenses incurred upto 31st December 2005 or within 18 months from the date of commencement of commercial production; whichever is earlier. 11.2 It is the case on behalf of the petitioners that in Clause 3.8 of the Scheme, the words, whichever is earlier between the two are not there in case of Industrial Units having the project cost exceeding ₹ 10 Crores, .....

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ase on behalf of the petitioners that as the date of commencement of the commercial production in their case is 27th December 2005, all the expenses incurred by the petitioner- Company upto 30th June 2007 ie., 18 months from the date of commencement of commercial production are eligible for grant of incentives. 11.3 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 w .....

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cost exceeding ₹ 10 Crores, the words, whichever is earlier between the two are missing, when it had gone to the press for publication. It is submitted that it being an inadvertant mistake that the words, whichever is earlier between the two are not printed in the Gujarati version of the Scheme. It is the case on behalf of the State that in Engligh version, the expression whichever is earlier between the two is there. However, the same had not gone to the press, and therefore, the same co .....

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and considering Clause 3.8 of the Scheme, at the outset, it is required to be noted that in case of Small Scale Industrial Units, Medium and Large scale Industrial Units, the assets acquired upto the period of six months or within 1 year from the date of commencement 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 o .....

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, as is discernible from the Government file, I clearly suggests that originally, 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 .....

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ing 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 goes to show that the capital investment incurred and paid during the specified period from the date of commencement of commercial production or till the currency of the Scheme, whichever is earlier, was to be taken into account .....

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of six months from the date of commencement of the production or till the completion of the scheme, whichever is earlier. Secondly, for medium and large scale projects, the clause similarly provides consideration of capital investment made during the period of one year from the date of commencement of commercial production or till the completion of the scheme, whichever is earlier. Thirdly, so is the position with respect to the Units having project cost exceeding ₹ 10 crore, wherein the .....

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condition applicable to the units having investment exceeding ₹ 10 crores, does not extend the benefit under the scheme for a longer period than the currency of the scheme i.e. beyond 31st December, 2005. It may be appreciated that the expression 'whichever is earlier' at the end of the said clause 3.8 is inadvertently omitted to be mentioned in view of the fact that the last underlined portion in clause 3.8 referred to above, relating to Units having project cost exceeding ₹ .....

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tive Scheme i.e. 31st December, 2005 (except pipe-line cases). 13. Nobody can be permitted to take undue advantage/ disadvantage of the beneficial Scheme due to inadvertent mistake in publication. 13.1 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 com .....

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ts acquired maximum upto 31st December 2005 shall be considered eligible for the purpose of incentives, or the assets acquired within a period of 18 months from the date of commencement of commercial production, if the same is before 31st December 2005. For example, in a case where the date of commencement of production is 1st day of January 2002, in that case, the assets acquired within period of 18 months from 1st January 2002 shall be considered eligible for the purpose of incentives and in o .....

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acquired within 18 months from the date of commencement of commercial production or till completion of the Scheme ie., 31st December 2005 [whichever is earlier between the two] are considered eligible for the incentive. Under the circumstances, as such, the State have treated all equally and with equal standard. At this stage, it is required to be noted that even the petitioners have not alleged any violation of Article 14 of the Constitution and/or discrimination. 15. It is also required to be .....

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nderstood from the very beginning the Scheme in the manner as suggested by the State Government and they also understood that on the assets acquired within a period of 18 months from the date of commencement of commercial production 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 conside .....

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at the said Provisional Eligibility Certificate is dated 29th March 2007. At this stage, it is required to be noted that even subsequently, while the petitioners applied for Final Eligibility Certificate, which was dated 20th December 2008, they claimed benefit on the investment made of ₹ 47.27 Crores ie., the investment made/assets acquired upto 31st December 2005 ie., ₹ 28.73 Crores [even as claimed by the petitioners] and out of which ₹ 47.27 Crores, the State/Department con .....

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ade for the first time in the year 2015. There is nothing on the record that any representation was made to consider the assets acquired upto 30th June 2007, being the period of 18 months from the date of commencement of commercial production. Thus, such a claim is made in the present petition requesting to consider the assets acquired by the petitioners after 31st December 2005, but before 30th June 2007 ie., within 18 months from the date of commencement of the commercial production. Thus, the .....

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tween the two] shall be considered eligible for the purpose of the incentive. It is also not the case on behalf of the petitioners in the petition that in fact they understood, considering Clause 3.8 that the assets acquired within a period of 18 months from the date of commencement of the commercial production shall also be considered eligible for incentive and therefore, they made investment subsequently. The petitioners have also not pleaded any estoppel or promissory estoppel. Under the circ .....

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2.2005. 18. 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 .....

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s between the parties with respect to the said controversy. Even otherwise in the said decision, while disposing of Special Civil Application No. 5638 of 2011, the Division Bench has nowhere held that the investment/assets acquired during 18 months from the date of commencement of commercial production and after 31st December 2005 may be considered eligible for incentive. No such prayer is granted. It appears that while deciding the question involved in the said petition, some submissions were m .....

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date of commencement of commercial production, the same is eligible for incentive or not. Under the circumstances, the decision of Division Bench of this Court in Special Civil Application No. 5638 of 2011 and Special Civil Application No. 11768 of 2013 shall not be of any assistance to the petitioners and/or the same shall not be applicable to the facts of the case on hand. 19. Now so far as reliance placed on the decision of Division Bench of this Court in case of Mahashakti Coke v. State of .....

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However, the eligible amount of Sales Tax Scheme recommended was only ₹ 63.04 Crores and the same was controversy before the Division Bench. Before the Division Bench, there was no dispute with respect to the investment made after 31st December 2005 but within 18 months 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. 2 .....

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xemption on the total expenses/investment made after 31st December 2005 and/or before 11th April 2007 ie., within 18 months from the date of commencement of commercial production and it is held that the petitioners are entitled for Incentive Scheme/Sales-tax exemption on the investment made/assets acquired upto the date of commencement of the commercial production ie., 27th December 2005. QUESTION No. 2 21. Now so far as the case on behalf of the petitioners that Phase-II project can be said to .....

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the pipeline unit has been specifically mentioned in the Government Resolution dated 9th November 2001 [in the Scheme]. As per the Scheme/Government Resolution dated 9th November 2001, the pipeline Units are such which had not gone in for commercial production before 31st October 2004 [as per G.R dated 9th November 2001], and thereafter before 31st December 2004 [as per G.R dated 13th September 2004], and even thereafter before 31st December 2005 [as per G.R dated 7th January 2005]. Therefore, .....

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, Whether the petitioner-Company is entitled to Incentives/Sales-tax exemption benefits on the investment made in the plant and machineries installed/ purchased prior to 31st December 2005, but for which payment is made subsequently ie., after 31st December 2005, it is not in dispute that according to the petitioners and as per its original claim as per Chartered Accountant certificate produced by the petitioner-Company, the petitioners have made actual investment of ₹ 47.25 Crores upto 31 .....

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ote of different heads envisaged in which it is treated as ineligible by the State Inspecting Team : Sr No Investme nt as per CA Certificat e Unpaid Amount Paid Amount Ineligible Amount as per Team e 1 Land 4.82 4.82 1.88 2.94 2 Building 298.18 19.76 278.42 270.33 27.85 3 Advance Payment for Building 37.78 34.73 34.78 4 Electrificatio n 3613.66 2984.8 3 1697.03 60.75 5 Plant & Machineries 3613.66 628.84 2984.8 3 1697.03 649.3 6 Pre-operate & Preliminary Expenses 77.07 0.68 76.38 77.06 TO .....

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rtificate is ₹ 4.82 lacs and the entire amount has been paid off, out of which ₹ 1.88 lacs is treated as eligible investment as per the eligibility certificate, whereas a sum of ₹ 2.94 lacs is termed as ineligible. The report is indicative that the petitioner acquired land of village Pune admeasuring 98746 Sq. Mts at the total cost of ₹ 3.54 lacs. It also got permission for use of the same for non-agricultural purpose from the competent authority or the total built up are .....

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d development for setting up of the industry is a vital component. However, while denying the amount spent on land development, it was expected of the Committee to specify the grounds on which remaining sum has been treated as ineligible for the purpose of tax benefits particularly when there is no dispute to the factum that the petitioner has spent a sum of ₹ 4.82 lacs for the development of the land. The objections with regard to not treating the entire amount eligible for the purpose of .....

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2011 sent to the respondent on 28th January 2011, the petitioner had spoken about the pipeline unit and requested further that the Committee should consider all the investment made upto 31st December 2007 as eligible investment and the total investment made is of ₹ 9449.84/lacs. (B) Building : The total investment is of ₹ 298.18 lacs and advanced payment was made to the tune of ₹ 34.78 lacs. Out of this, total amount of ₹ 298.18 lacs, only sum treated as eligible is S .....

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total investment in the building of ₹ 298.18 lacs is considered to be ineligible. However, the advanced payment made for the building in its entirety is treated as ineligible, Unpaid amount of ₹ 19.84 lacs and ₹ 8.08 lacs, per government resolution, are considered ineligible. No reasons are given as to why ₹ 8.08 lacs is treated as ineligible nor has it been specified as to why the advanced payment is also considered ineligible. We are therefore of the opinion that for bo .....

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ly when the fact is not in dispute that the petitioner has already spent all these amounts. (C) Plant and Machinery : Under this head, the total amount disallowed is ₹ 16,49,30,000/=. The advanced payment made towards the machinery is not considered eligible for not having come to the site which is to the tune of ₹ 4103.70 lacs. This amount has been spent and machineries as per the say of the petitioner were at the Port. Amount of ₹ 628.84 lacs is held ineligible for being unpa .....

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is pointed out by learned counsel that in subsequent correspondence made to the respondent, these details have already been provided and the petitioner is further ready to prove the mode of payment of both the sum of ₹ 41,03,70,000/and ₹ 34.78 lacs. 16. From the above discussion, it can be noted that there is a considerable amount of investment which is treated as ineligible on account of non-availability of details of mode of payment. Moreover, the land development also the cost is .....

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ssession of all those vouchers and can be produced which had also been communicated to the respondents. 17. In light of the discussion held hereinabove, as far as the first Unit of M.S Ingots is concerned, we are of the opinion that when the unit had started production within the stipulated time period and when there is no doubt with regard to making of investment merely on technical grounds, the denial on the part of the respondent to treat such investment as ineligible for the purpose of tax b .....

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e of land, plant and machinery which were already been installed prior to 31st December 2005 but the actual payment is made subsequently are held to be ineligible. 22.3 At this stage, decision of Division Bench of this Court in the case of Vishal Lines Private Limited [Supra] requires a reference, where somewhat identical question viz., whether computation of fixed capital investment would exclude the amount which is outstanding and to be paid to the supplier of fixed capital assets, namely, the .....

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act as the lender by deferring the payment, making the outstanding against acquisition of such capital investment, as borrowed capital for the purpose of capital investment in the new industry by the petitioner. 22.4 To the aforesaid, it was the case on behalf of the State that only those assets which are acquired and paid during the operative period of the Scheme shall be eligible for the Sales-tax exemption/incentives under the Scheme. The words acquired and paid refers to actual payment made .....

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observed and held as under :- In our opinion, no distinction can be made on the basis where from the credit comes for the acquisition of the eligible assets or on the ground whether the liability is met from own capital or from the capital borrowed from financing agencies or credit enjoyed as a result of deferred payment. The computation of investment in the five items referred to in sub-clause [c] of Clause [iv] of the Resolution remains unaltered. In the circumstances the word paid has to be u .....

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ny provision of the constitution is to be avoided unless the other view is not possible to take. In the context in which the term capital investment has been used, we are of the opinion that the definition which takes its colour from the definition used in the resolution dated 6th May 1986 referred to above and the meaning of word actual price paid or acquired and paid means that the capital investment relates to the acquisition of assets for consideration for which liability has been incurred t .....

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e considered. Such liability to payments be incurred during the currency of the scheme, in the sense during which the commencement of New Industrial undertaking or Expansion or Diversification will be eligible for operation of incentive and not in the sense during the period for which it operates for the beneficiary. Actual payments during that period is not a condition of its treatment as Capital Investment. To illustrate, instead of acquiring land, the assessee brings a land which is already o .....

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e he may have acquired it by dint of succession, gift or any other form in which he does not have to pay the price for it, notwithstanding that the same forms part of the capital structure of the undertaking, for the purpose of eligible fixed capital investment for quantifying the limit of benefit under Entry 175 or for deferment under the Resolution dt. 6th May 1986 the same cannot be considered as part of eligible fixed capital investment. Giving any other meaning to the words 'acquired an .....

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opinion that there is no justification in denying the benefits of Incentive Scheme/Sales Tax Exemption on the investment made in acquiring the land, building, plant and machineries acquired/installed prior to 31st December 2005, but payment of which was made subsequently ie., after 31st December 2005. To the aforestated extent, the petitioner-Company is justified in making the grievance in not considering the investment made in acquiring the land, building, plant and machineries prior to 31st D .....

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