Tax exemption under pre-reorganisation notification survives State bifurcation and continues for the successor territory.

A tax exemption granted under a fixed-term notification continued to attach to the industrial unit after State reorganisation. The change in territorial jurisdiction did not, by itself, extinguish a benefit that had already crystallised under a valid exemption notification. The applicable legal position was that laws and notifications in force immediately before reorganisation continue to operate in the relevant territory until they are modified, repealed or altered by the authority. The petitioner's entitlement to the exemption for the assessment year 2001-02 was therefore sustained in principle, and the authorities were directed to reconsider the matter in accordance with the controlling precedent.

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Issues: Whether the tax exemption granted under the notification continued to apply to the petitioner after the reorganisation of the State, so as to entitle it to the benefit for the assessment year 2001-02.

Analysis: The exemption had been granted under Notification No. A-3-27-ST-V(15) dated 19.02.1991 for a fixed period. On reorganisation of the State, the industrial unit fell within the territory of the successor State, but the benefit attached to the unit was not lost merely because of the change in territorial jurisdiction. The legal position was governed by the principle that laws and notifications in force immediately before reorganisation continue to operate in the relevant territories until modified, repealed or altered, and the benefit already crystallised under the exemption notification survives the bifurcation.

Conclusion: The exemption remained applicable to the petitioner even after reorganisation of the State, and the authorities were required to reconsider the matter in accordance with the law laid down in the controlling precedent.

Final Conclusion: The petitioner's entitlement to the exemption was upheld in principle, with consequential reconsideration directed by the authorities.

Ratio Decidendi: An exemption or incentive crystallised under a valid notification continues to operate in the successor territorial regime after State reorganisation unless the competent authority modifies, repeals or alters it.

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