Industrial policy exemption depends on prior permission obtained before the policy cut-off date for expansion or modernisation claims

Industrial policy notifications for existing units seeking expansion or modernisation operated only within the policy period and did not survive independently after the policy expired on 31 August 2000. The amended scheme required prior permission from the specified authorities before the cut-off date and provided a time-bound decision mechanism, but it did not create any deemed approval if the authorities failed to act within the outer period. As the petitioner had not obtained prior permission before expiry, the claimed sales tax exemption was not available and the refusal to grant prior permission was upheld.

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Issues: Whether the petitioner, an existing industrial unit seeking expansion or modernisation, was entitled to prior permission and consequential sales tax exemption under the industrial policy notifications notwithstanding that the policy period had expired before prior permission was granted.

Analysis: The notifications issued to implement the Industrial Policy, 1995 were tied to the policy period and were intended to operate within the framework of the policy itself. For existing units seeking expansion or modernisation, the amended notifications required prior permission before the specified authorities and provided a time-bound mechanism for decision-making, but they did not create any deemed grant if the authorities failed to act within the outer period. The policy expired on 31 August 2000, and the petitioner had not obtained prior permission before that cut-off date. The Court rejected the contention that the application survived indefinitely or that the notifications continued independently after the policy came to an end. The cited precedents were distinguished on the ground that they did not involve a policy-specific cut-off date.

Conclusion: The petitioner was not entitled to the claimed benefit, and the refusal to grant prior permission was upheld.

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