TMI Blog2021 (6) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... 996. Clearly, this would include an existing unit, which undertakes expansion and modernization after 1st March, 1996. The certificate issued by the DoI on 7th March, 2002, in Form II-A, granting the Petitioner eligibility for sales tax concession on sale of finished products acknowledges both the new products as well as the existing product viz., air coolers . Indeed, the Opposite Parties have no answer to the above contention of the Petitioner that it was a unit in the pipeline in terms of SRO 141/2000. The Petitioner has also clarified how its agreement with M/s. Nilkamal Plastic Private Limited had no relevance to its claim for sales tax exemption. The machineries for the manufacture of moulded plastic furniture were purchased from M/s. Nilkamal Plastic Private Limited under proper invoices, challans and excise gate passes. It was the Petitioner that produced the finished products - With the Petitioner satisfying all the requirements of the applicable notifications, there appears to be no justification in the Opposite Parties seeking to revoke the sales tax exemption thereby cancelling the certificate issued for that purpose. It is held that the Petitioner, as a prio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner's unit should be issued a Priority Industries Certificate (PIC) indicating the project cost in the aforementioned sum, after due verification. 4. At this stage, it requires to be noticed that Clause 2.7 of IPR 1996 defines priority industry to mean an industrial unit in certain specified categories having a project cost of not less than ₹ 1 crore. 5. By communication dated 8th January, 2002 the DoI issued a production certificate in favour of the Petitioner stating inter alia that after the expansion and modernization drive the unit had come under the purview of Large and Medium sector and its date of commercial production is determined as 12th November, 2001. By another communication dated 24th January 2002, the DoI certified the Petitioner's unit to be a priority industry as defined in Para-2.7 (i) and (xii) Part-II of the IPR 1996. In the said certificate it was noted that the unit was eligible to avail sales tax exemption/deferment as applicable under IPR 1996 subject to fulfillment of all other conditions as laid down, if any. 6. On 7th March, 2002, the DoI further issued in favour of the Petitioner, under Form II-A, a certificate of eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. This notification further stipulated that where an industrial unit was in the pipeline as on 1st January 2000, it would be entitled to the incentive under the notification on same terms and conditions if it fulfilled the following criteria as on 1st January, 2000: i. Industrial unit which is regd. under the Orissa Sale Tax, 1947. ii. Industrial Unit which has been allotted land for the factory. iii. The industrial unit which has applied for finance from regular financial institution. iv. Industrial unit which will start commercial production before the 1st January, 2000. 10. The Petitioner contended that it fulfilled each of the above criteria spelt out in SRO 141/2000. The Petitioner pointed out that Opposite Party No.3 by its letter dated 24th March, 2003 had put out a list of industries that were in the pipeline as on 1st January 2000. The name of the Petitioner's unit was at Serial No. 24 of the said list. Further, it was pointed out by the Petitioner that in exercise of powers conferred on it under Section 6 of the Orissa Sales Tax Act (the OST Act), the Government of Orissa had brought out an amendment to Notification No. 206 dated 23rd Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e month from the date of receipt of the same. Thereafter Opposite Party No.2 shall decide the matter on its own merit with accordance with the law. The claims of the Petitioner is that the Industry is a priority Industry and entitled to get the benefit of sales tax exemption for seven years or otherwise shall also be decided by the Authorities dealing with the representation. In the meantime, no coercive action shall be taken against the Petitioner till a decision is taken. The writ petitions are disposed of accordingly. 14. Thereafter, a show cause notice (SCN) dated 5th December, 2005 was issued by the DoI to the Petitioner recording the prima facie view that the eligibility certificate granted to the Petitioner on 7th/11th March, 2002 was erroneous and contrary to the various notifications issued by the Government of Odisha. The Petitioner replied to the SCN on 12th January 2006 explaining why it was entitled to the exemption. Thereafter, by the impugned order dated 18th January 2008, the DoI held that the Petitioner's unit was not a new unit in terms of IPR 1996 and, therefore, not entitled to priority industry status thereby upholding the cancellation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an E/M/D unit) after 1st day of March, 1996. 18. The Petitioner also pointed out in its rejoinder that it was a unit in the pipeline as it satisfied all the conditions stipulated in SRO 141/2000 dated 17th February, 2000 and in fact, the Petitioner figured at Serial No. 24 of a list of such industries prepared by the DoI on 24th March, 2003. 19. This Court has heard submissions of Mr. S. P. Misra, learned Senior Counsel appearing for the Petitioner and Mr. P. K. Muduli, learned Additional Government Advocate for the State. 20. There appears to be a factual misconception on the part of the DoI about the status of the Petitioner, which admittedly graduated from an SSI unit to a Medium Scale unit having undertaken the expansion and modernization drive. There also appears to be a misconception as regards the eligibility of the Petitioner for sales tax exemption for an additional two years since it is recognized as a priority industry. 21. While it is true that the Petitioner as a new unit was in the SSI category, it graduated to a Medium Scale industry after the expansion and modernization drive. It satisfied the description of an existing unit that had undertaken e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. Emergency light - 03.01.2001 b. UPS - 03.01.2001 c. Moulded Furniture other household goods - 03.01.2001 d. TV sets (B/W CTV) - 12.11.2001 25. Indeed, the Opposite Parties have no answer to the above contention of the Petitioner that it was a unit in the pipeline in terms of SRO 141/2000. The Petitioner has also clarified how its agreement with M/s. Nilkamal Plastic Private Limited had no relevance to its claim for sales tax exemption. The machineries for the manufacture of moulded plastic furniture were purchased from M/s. Nilkamal Plastic Private Limited under proper invoices, challans and excise gate passes. It was the Petitioner that produced the finished products. That it was an industry in the pipeline as on 1st January, 2000 has been admitted by the Opposite Parties themselves as its figures at Serial No. 24 of the list dated prepared by the DoI on 24th Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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