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TMI Blog2020 (10) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... e of tax. By the virtue of the aforementioned powers, Government came out with a notification S.R.O No.1729 of 1993, granting tax exemptions to industrial units or reduction in tax, payable on the sale or purchase, as the case may be, of goods produced by such industrial units, subject to conditions and restriction, specified, in the notification. The aforementioned exemption was withdrawn and amended by a subsequent notification S.R.O No.1092/99 dated 31.12.1999 Ext.P1. Notification of (1999) envisaged certain industries, eligible for exemption or reduction in the sale tax, relevant portion reads thus: 1.i. new industrial units other than public sector undertakings which have been set up or have commenced commercial production before 1st January, 2000. 1.ii. new industrial units other than public sector undertakings which have taken effective steps for setting up new industrial unit prior to the 1st day of January 2000. An industrial unit shall be considered to have taken such effective steps if it has. (a) obtained provisional registration (applicable only in the case of SSI units). (b) owned or acquired or has been allotted land for establishing the industrial unit and (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has applied for loan from any regular financial institution and/or (c) has placed firm orders for the purchase of such plant and machinery and equipment before the 1st day of January, 2000 provided that such unit commences commercial production of such diversification, expansion or modernization on or before the 31st day of December, 2001.". A unit shall be deemed to have placed firm orders, for the purchase of plant, machinery and equipment if such unit had made any advance payments therefore by means of demand draft or cheque which has been credited to the account of the seller prior to 1st January, 2000. The onus of proving that an industrial unit had placed firm order for purchase of such plant machinery and equipment prior to 1st January 2000 shall be on such industrial unit". (iii) After sub-clause (iv), the following sub-clause shall be inserted, namely:- (iv) where on enquiry it is found that any industrial unit had secured exemption by furnishing false information or forged documents, the authority which issued the exemption order, shall after affording such industrial unit a reasonable opportunity of being heard, cancel the exemption." 4. Learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.3.2006 without affording an opportunity of hearing. The review petition dated 27.7.2006 was filed by the petitioner before the 2nd respondent to restore its earlier appeal, Ext.P14. Aggrieved by the non-consideration, the petitioner approached this Court through W.P.(C) No.6679 of 2007, which was dismissed vide order dated 28.2.2007. Against the aforementioned order, Writ Appeal No.1411 of 2007 was preferred. Allowing the Writ Appeal, this Court directed the 2nd respondent to afford an opportunity of hearing to the petitioner prior to disposing of the appeal. The revenue recovery proceedings were initiated to recover the amount demanded as sales tax. Challenging the recovery proceedings, the petitioner had approached this Court by filing W.P.(C) No.34831 of 2007. 7. In the meanwhile, the petitioner had written a letter to the Government indicating the predicament it was placed in on account of the Government's promises, Ext.P15. The aforementioned appeal preferred was considered only in 2011, pursuant to a direction of this Court in W.P.(C) No.11009 of 2010 dated 6.4.2010 for speedy disposal of the appeal. The 2nd respondent noted that certain clarifications regarding the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not applied for loan before 1.1.2000 is incorrect as is evidenced from Ext.P4, which is dated 5.9.1997. There is no such reference to any report from the General Manager, District Industries Centre, Thrissur who visited the petitioner unit on 9.11.2011. Further reasoning ,that Ext.P5 was only a letter and not allotment is absolutely untenable as from the plain and simple reading thereof, it is evident that the District Industries Centre recommended to allot five sheds in Athani including that to one of the petitioner. Respondents have not chosen to apply liberal construction to the notification and assigned all possible flimsy reasons in not accepting the grant of exemption. 11. This case stands admitted vide order dated 18.12.2017. Counter affidavit has not been filed till the final hearing. However counsel representing the respondents supported the impugned order by justifying that the reasoning assigned in Ext.P22 having not complied with the condition No.(b) and (c); would not entitle into grant of exemption by complying only condition No.(a) as is being sought to be projected in case of M/s Prashanth Rubbers, Ernakulam. The allotment was cancelled and the unit had purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that the notification dated 3.11.1999 was issued in terms of an industrial policy; whereto exemption was to be granted for a period of seven years and it was observed that obtaining of provisional registration in respect of SSI unit was sufficient. For the sake of brevity, the observation of the judgment reads as under: "42. This brings us to the question of interpretation of the notifications. The notification dated 3.11.1993 was issued in terms of an industrial policy; pursuant whereto exemption was to be granted for a period of seven years. Appellant had placed orders for supply of plant and machinery both with advances and without advances. What was necessary was to take effective steps for setting up of new industrial units. A deeming provision existed in terms whereof the effective steps would be considered to have been taken; if it has : (a) obtained provisional registration (applicable only in the case of SSI units); (b) owned or acquired or has been allotted land for establishing the industrial units and applied for financial support from any regular financial institution/ government before 1.1.2000; or (c) in the case of self financed units acquired or plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been confirmed on it. 16. There cannot be any doubt whatsoever that the burden of proof was on the appellant. According to the Director of Industries, he had discharged the burden. Only because the procedural sanction of grant of financial exemption was to be received from the Deputy Commissioner (General) Commercial Taxes, the same, in our opinion, would not mean that the conditions had not been satisfied. In any event, the certificate granted by the Director deserved serious consideration. Both the learned Single Judge as also the Division Bench did not consider this aspect of the matter." 16. The relevant portion of the decision taken in Ext.P22 rejecting the case of the petitioner reads as under: "In this particular case, the unit has obtained provisional registration on 15.7.1997. Hence condition (a) is complied. Regarding condition (b) the contention of the appellant is that the General Manager, District Industries Centre, Thrissur, has allotted land vide proceedings No.B9/5882/96 dated 01.09.1997 at Development plot, Athani. But it is to be noted that the said proceedings dated, 1.9.1997 is not a proceedings but only a letter addressed to the Managing Director, Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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