Pipeline industry exemption applies where later notification expressly covers eligible IMFL units despite earlier withdrawal.

A later sales tax exemption notification under the Pondicherry General Sales Tax Act extended incentive benefits to industries already established and to units in the pipeline, subject to specified conditions. An IMFL unit that was provisionally registered, had obtained the required approvals and licences, and otherwise satisfied the pipeline conditions was therefore covered by the later notification. The earlier withdrawal of exemption for new IMFL industries did not defeat that benefit where the subsequent notification expressly preserved and expanded eligibility. On those facts, the assessment denying exemption was unsustainable.

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Issues: Whether an IMFL unit, established as an industry in the pipeline, was entitled to sales tax exemption under the later notification despite the earlier withdrawal of exemption for IMFL.

Analysis: The relevant notifications were issued under section 19 of the Pondicherry General Sales Tax Act, 1967. The earlier policy withdrew exemption for new IMFL industries from 1 April 1999, but the notification dated 21 July 2000 expressly continued exemption for industries already come in and also extended the incentive to industries in the pipeline, subject to specified conditions. On the facts, the unit had been provisionally registered, had obtained requisite approvals and licences in the course of establishment, and satisfied the conditions for pipeline industries. The departmental letter also supported the view that IMFL units could avail the incentive if they met the prescribed requirements.

Conclusion: The company was entitled to the exemption as an industry in the pipeline, and the assessment denying that benefit was not sustainable.

Ratio Decidendi: Where a later exemption notification expressly covers industries in the pipeline subject to stated conditions, an IMFL unit satisfying those conditions cannot be denied the benefit merely because earlier notifications had withdrawn exemption for new IMFL industries.

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