TMI Blog2017 (7) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... entives. 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. 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 30th 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. The intention of the framers of the Scheme ie., the State Government is very clear and unambiguous ie., to consider the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, the petitioners have prayed for the following reliefs :- {A} This Hon'ble Court may be pleased to issue the writ of mandamus, or any other writ, order or direction in the nature of mandamus, quashing and setting aside the communication dated 29th March 2014 conveying the decision of the High Power Committee that the capital investment made by the petitioners after 31st December 2005 are not eligible for Sales-tax incentives as the said decision is absolutely unjust, improper, unlawful, contrary to the provisions of the Scheme and in violation of the principles of promissory estoppel as well as natural justice. {B} This Hon'ble Court be further pleased to issue the writ of mandamus, or any other writ, order or direction in the nature of mandamus directing the respondents to modify the final eligibility certificate issued on 16th February 2008 restricting the petitioners entitlement to Sales-tax exemption only upto 71.80 Crores and not taking into consideration the further investment made by the petitioners to the extent of ₹ 91.45 crores upto 31st December 2007, being the extended period of the Scheme. {C} During the pendency and final disposal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligibility Certificate was granted to the petitioner- Company, considering the eligible capital investment of ₹ 73.80 Crores made upto 31st December 2005. 3.4 It is the case on behalf of the petitioners that in Phase II, the Company had invested a further sum of ₹ 50.36 Croes during the Calender Year 2006 as a part of planned investment; as shown in the Project Report already submitted alongwith application for registration on 18th August 2005 by the petitioner- Company vide its letter dated 24th March 2007. It is the case on behalf of the petitioners that the Company made the said investment of ₹ 50.37 Crores towards the factory buildings, tube-mills, spiral plants, chamfering machines, overhead cranes, hydro-testing machines, extrusion press, etc., as a part of project and required to attend planned capacity. According to the petitioners, the petitioner no.1-Company had, as a part of Phase II, made investment of ₹ 65.73 Crores towards balancing equipments and wind-mills to be installed upto 30th April 2007. According to the petitioners, as per the Scheme, Phase II is to be considered as a pipe-line project, and therefore, any investment made upto 31st D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 73.80 Crores incurred upto 31st December 2005. It is submitted that the petitioner-Company commenced commercial production by creating assets as Phase-I, while investment in Phase II was in process as on 31st December 2005 at Kutch in the remaining assets like critical plant and machinery and balancing equipments to complete the planned plant capacities and for that purpose, the petitioner-Company had made investment of ₹ 50.36 Crores during the Calender Year 2006, as a part of planned investment as shown in the Project Report already submitted alongwith application for registration on 18th August 2005. It is submitted that the petitioner-Company had made investment of ₹ 50.36 Crores towards Factory Building, Tube Mills, Spiral Plants, Chamfering machines, Overhead cranes, Hydro-testing machines, Extrusion press, etc., were brought as a part of Project and required to attain the planned capacity. It is submitted that the petitioner- Company had, as a part of Phase-II, made investment of ₹ 65.73 Crores towards Balancing equipments and Wind Mills to be installed upto 30th April 2007. It is submitted that therefore, it can be said that the aforesaid inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets acquired upto the period of six months from the date of commencement of production, or till completion of the scheme (whichever is earlier between the two) shall be considered eligible for the purpose of incentives. It is submitted that even in the case of medium and large scale Industrial Units, the assets acquired upto the period of one year from the date of commencement of production, or till the date of completion of the scheme [whichever is earlier between the two] shall be considered eligible for the purpose of incentives. It is submitted that, however, no such words are used whichever is earlier between the two - in case of Industrial Units having project cost exceeding ₹ 10 crores. 6.2 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 incentives. It is submitted that therefore, on reading Clause 3.8 of the Scheme as it is, as in the present case the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted 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 30th October, 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 as such, the intention of the State by the Scheme was to grant incentives/Sales Tax exemption on the Capital Investment made and/or expenses incurred only upto 31st December, 2005. It is submitted that however, in the printing, through oversight, in the Gujarati version the word, whichever is earlier between the two is missing, like in the case of Small Industrial Units and Medium Industrial Units. It is submitted that therefore, the petitioners cannot be permitted to take undue advantage of the mistake in 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 commence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the Scheme, whichever is earlier , was to be taken into account for exceeding the benefit of incentive Scheme. It is submitted that thus, the intention on behalf of the State in Clause 3.8 of the Scheme is that the Capital Investment of the units, namely, Small Industrial Units, Medium 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 31st December, 2005, or 18 months from the date of commencement of production; whichever is earlier, the benefit under the Scheme shall be available. It is submitted that none of the 105 projects like that of the petitioners have ever applied for investment made beyond 31st December, 2005 and/or none of the 105 projects like the petitioners have ever been given benefit under the incentive Scheme for investment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pipeline project, and therefore, treating Phase-II project as a Pipeline project, the investment made upto 31st December 2007, the petitioner shall be eligible 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 cannot be said to be a pipeline project more particularly once the petitioners had gone for commercial production on 30th October 2005. It is submitted that therefore, extension of the period applicable to pipeline projects shall not be applicable to the petitioners who had already started commercial production admittedly on 30th October 2005, and therefore, the petitioners are not eligible to get incentives on the investment made after 31.12.2005 and before 31.12.2007; as claimed by the petitioners. 7.7 Making above submissions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine projects, the petitioners are entitled to/eligible for Sales-tax exemption on the investment made upto 31st December 2007 is concerned, the aforesaid has no substance. It is required to be noted that admittedly, the petitioners had gone for commercial production on and from 30th October 2005. There is nothing like Phase I or Phase II project in the Scheme. What can be said to be 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, 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 29th/30th October 2005, and therefore, as per the Scheme/Government Resolutions amended from time to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Eligibility Certificate towards Sales-tax exemption, considering investment made upto 30th October 2005 ie., upto the date of commencement of commercial production is absolutely just, proper and legal, and in consonance with the provisions of the Scheme/Government Resolution. Therefore, the petitioners are not eligible for Sales-tax Exemption/Incentives on the investment/expenses incurred upto 31st December 2007, treating the same as a pipeline project . 11. Now so far as the alternate submission made by learned advocate for the petitioner, relying upon Clause 3.8 of the Scheme and the submissions on behalf of the petitioners that the petitioner-Company shall be eligible for incentives/sales tax exemption on the investment made/expenses incurred after 31st December 2005, but within a period of 18 months from th date of commencement of commercial production is concerned, 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 the case of Industrial Units having project cost exceeding ₹ 10 Crores, which words though are there in case of Small Scale Industrial Units, Medium and Large sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 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. The aforesaid aspect has been explained in detail, while narrating the sequence which led to introduction of Incentive Scheme in paras 5 to 7 of the affidavit dated 6th December 2016 filed on behalf of the respondent no. 1, which read as under :- 5. In this behalf, 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 disti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he intention behind the said clause 3.8 is that the capital investment of the units viz., small scale, medium scale, large scale and the units having project cost exceeding ₹ 10 crore, will be considered for the respective specified period from the date of commencement of production or completion of the scheme, whichever is earlier. Mere nonmentioning of the term whichever is earlier after the 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 ₹ 10 crore was added later on, as a result of the further deliberation. It is pertinent to mentioned that none of the 105 projects like that of the petitioners have ever been given the benefits under the Incentive Scheme after the expiry of 31st December, 2005 even though the specified periods v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 14.1 It is also required to be noted that the understanding of the Scheme; including that of the petitioners, was in line suggested by the State Government. All the 105 projects which are beneficiaries of the Incentive Scheme 2001 applied for eligibility certificate and thereby claimed incentives on the assets acquired on or before 31st December 2005 only. None of the projects had claimed incentives on the assets acquired after 31st December 2005. At this stage, it is also required to be noted that even the petitioners also understood 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 purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the State Government had pleaded and all 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. 16. 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 acquire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. 18. 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 31st December 2005, but made on or before 31st December 2007 ie., within a period of 18 months from the date of commencement, treating its Phase-II project as a pipeline project and the alternate claim of the petitioners for incentives/sales-tax exemption on the investment made/assets acquired after 31st December 2005 but made on or before 31st April 2007 ie., within a period of 18 months from the date of commercial production are hereby rejected. It is held that the petitioners are not entitled to the incentives/Sales-tax exemption on the total expenses/investment made thereafter upto 31st December 2007 and/or upto 31st April 2007; as claimed. It is also held that they are entitled to Incentives/Sales-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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