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2018 (3) TMI 545

Policy of the State Government, and therefore, notification dated 21.04.2003 issued pursuant to the directions of the Board has not been continued - Held that: - After coming into force of SICA Repeal Act, 2003, as per notification dated 25.11.2016 (Annexure R/1), the proceedings pending before BIFR stands abated and interim order passed in favour of the petitioner stands automatically vacated by operation of law - The order dated 05.11.2007 passed by the BIFR was set aside by the AAIFR on 16.08.2010. - The petitioner is not entitled to get any relief as well as interim relief - petition dismissed. - Writ Petition No. 5616/2006, Writ Petition No.1450/2017 - Dated:- 8-3-2018 - Hon'ble Shri P.K. Jaiswal Hon'ble Shri Virender Singh, JJ. Shri Sumit Nema, learned Senior Counsel assisted by Shri Gagan Tiwari, learned counsel for the petitioner Shri H.Y. Mehta, learned Government Advocate for the respondent / State of Madhya Pradesh ORDER Per P. K. Jaiswal, J. By this writ petition under Article 226 of the Constitution of India, the petitioner has prayed following relief in paragraph No.7 of the writ petition: - 7. Relief prayed for: The petitioner respectfully prays this Hon .....

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and further the Ministry of Industry & Commerce of Government of Madhya Pradesh had already communicated their consent for grant of Sales Tax and Purchase Tax exemption to the company for a total period of nine years from the date of sanction of the Scheme and the Government of Madhya Pradesh had also issued a notification dated 21.04.2003 in this regard. 4. The Government of Madhya Pradesh did not continue the exemption granted vide notification dated 21.04.2003 (Annexure P/4) after introduction of Madhya Pradesh Value Added Tax Act, 2002 (herein after referred to as the VAT Act) with effect from 01.04.2006 and wrote a letter dated 04.08.2007 (Annexure P/6) to BIFR contending inter alia that after introduction of VAT Act w.e.f. 01.04.2006, the earlier exemption granted vide notification dated 21.04.2003 ceased to have any effect and thus, after 01.04.2006, no benefit can be given to the petitioner company. 5. BIFR in Case No.172/1997 vide order dated 25.03.2008 (Annexure P/7) issued the following directions: - "12. (ii) In view of the above, the Board, hereby, issues the following directions for compliance by the concerned agencies: - (a) As, in terms of para-4.7 (2) & .....

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ated 24.04.2009 passed by Hon ble High Court of Madhya Pradesh in Writ Petition No.1318/2008 have merged and subsumed in the order dated 11.09.2009 passed by the Hon ble Supreme Court of India. Further, it is also to be noted that the appellate company M/s. Saurabh Meals Pvt. Ltd. has challenged the jurisdiction and other issues in Writ Petition No.7682/2010 and the same was dismissed by Hon ble High Court of Madhya Pradesh, hence, the company is barred by the principle of res judicata as the same issues between the same parties have been adjudicated once for all. The BIFR was fully competent to adjudicate upon Miscellaneous Application filed by the Commercial Tax Department in pursuant of the order dated 11.09.2009 passed by Hon ble Supreme Court of India. As per the notification No.A-3-24-94-ST-V(108) dated 06.10.1994, the State Government had full power to review the exemption which was accordingly granted with a monetary limit of ₹ 4.10 crores. Para 5 of the said notification states: - 5. (i) Dealer who establishes a 1[…] new industrial unit in a growth centre developed by Audyogik Kendra Vikas Nigam other than Boral growth centre in Durg District or who undertakes .....

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39/2011 has been filed by the Commissioner, Commercial Tax Department against para 26 (9) of BIFR order dated 17.02.2011 wherein the BIFR had directed inter alia that all the reliefs which had been allowed to the company up to 31.03.2006, in accordance with the State Policy and in compliance with the provisions of SS-96, should not be disturbed. It was submitted on behalf of the Commercial Tax Department that on 31.03.2006, when the VAT Act came into force, the company had already availed the exemption beyond the monetary limit of ₹ 4.10 crores and therefore, any amount of commercial and other taxes collected by it beyond the limit of ₹ 4.10 crores should have been directed to be refunded to the Sales Tax Department. 19. We are in agreement with the submissions made on behalf of the Commercial Tax Department in this regard as already discussed above that the State Government was fully empowered to impose a limit of ₹ 4.10 crores as per the provisions of para 5 of the notification dated 06.10.1994. So far as the last argument of appellant M/s. Saurabh Metals Pvt. Ltd. is concerned, that any interference with the terms of sanctioned scheme at this belated stage woul .....

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ected Commercial Tax Department to file its reply within two weeks. 12. Thereafter, Ministry of Finance vide notification dated 25.11.2016 (Annexure P/14) repealed Sick Industrial Companies (Special Provisions) Act, 1985 (herein after referred to as the SICA) with effect from 1st December, 2016. As per Clause (b) of Section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, any appeal preferred to the Appellate Authority or any reference made to the Board or any inquiry pending before the Board or any other authority or any proceeding of whatever nature pending before the Appellate Authority or the Board immediately before the commencement of this Act shall stand abated; and as per proviso (i), a company may make a reference under Part-VIA of the Companies Act, 1956 within one hundred and eighty days from the commencement of this Act in accordance with provisions of the Companies Act, 1956. 13. The contention of Shri Sumit Nema, learned Senior Counsel for the petitioner is that Sanctioned Scheme dated 20.05.2002 is saved by virtue of Section 5 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 and retains its binding effect; and hence, exe .....

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as submitted before the BIFR on behalf of the Commercial Tax Department in BIFR Case No.172/1997 mentioning about the fact with the enforcement of the VAT Act, 2002 with effect from 01.04.2006, it was agreed by all the States that no exemption to any individual industry be granted from payment of VAT. It was also agreed that only the unexpired period of industrial incentives are to be carried over under VAT and that no other exemption is to be allowed. The case of the petitioner - M/s. Rajshree Plastiwood Private Limited did not fall under the Policy of the State Government, and therefore, notification dated 21.04.2003 (Annexure P/4) issued pursuant to the directions of the Board has not been continued. It is also not in dispute that the application of the Commercial Tax Department was decided by the BIFR vide order dated 05.11.2007 (Annexure P/2) and against the aforesaid order, Commercial Tax Department has preferred Appeal No.46/2008 before the AAIFR, which was decided by order dated 16.08.2010 (Annexure P/8) and allowed in part. The aforesaid order had remained pending till the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 came into force. After coming into fr .....

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portunity of hearing was given to him. It is not in dispute before us that before the BIFR the principles of natural justice are required to be complied with. The AAIFR relying upon one of the judgment of the Supreme Court has recorded that the Rules of natural justice are applicable to the BIFR in the proceedings under SICA. The fact that the AAIFR has not set aside the order of BIFR on merit but only on the short ground of non compliance of principles of natural justice, is apparent from para 7 of the order of AAIFR quoted below: - We have heard the ld. counsels for the parties and perused the impugned order as well as records of the BIFR and have also considered the rival contentions of the ld. counsels for the parties. In this appeal, we have only considered the question whether any opportunity of hearing was provided to the appellant department, while passing the impugned order dated 5.11.07 and whether the impugned order was passed ex parte. Shri R.D. Makheeja, Advocate has submitted that no notice was given to the appellant for the hearing dated 5.11.07 nor was the appellant heard on its letter/application dated 4.8.07 which was filed by the appellant Department for review o .....

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r dated 5.11.2007, it is also noticed that the said order was passed in the review proceedings, therefore, it was all the more necessary for the BIFR to give notice and hear the respondent no.3, who had sought the review of the Sanctioned Scheme 2002. Therefore, it can not be said that no prejudice is caused to the respondent no.3 by the said order. 9. By the order dated 5.11.2007 the BIFR has discharged M/s Rajshree Plastiwood Ltd. (RBL) from the purview of SICA, therefore, before passing the said order the BIFR ought to have given opportunity of hearing to the respondent no.3 on his objections. The objections of the respondent no.3 may have a bearing on the reliefs, which have been granted to the petitioner in the said order. 10. That apart we also do not find any jurisdictional error or illegality in the exercise of jurisdiction by the AAIFR requiring interference by this Court under Article 227 of the Constitution of India. The Writ Petition is accordingly dismissed in limine." 20. The order dated 16.08.2010 passed by the AAIFR is affirmed by the learned Writ Court on 07.05.2011 in Writ Petition No.13289/2010. 21. After coming into force of SICA Repeal Act, 2003, as per no .....

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