Exhausted industrial tax exemption cannot be revived by later incentive notifications where the protective clause does not apply.

An industrial unit that had already enjoyed the five-year sales tax exemption under the Industrial Policy Resolution, 1986 could not claim further exemption for 1994-95 and 1995-96 under later incentive notifications. The unit was treated on the facts as a spice-making unit, and the later policy changes, including the exclusion and subsequent treatment of spice-making or pulverising units, did not revive any exhausted entitlement. The protective footnote in the later policy applied only where the unit was already receiving incentives under that regime, so it did not extend benefit to a unit governed by the earlier policy. The authorities were therefore justified in disallowing the exemption claim and recovering the refund.

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Issues: Whether the petitioner was entitled to sales tax exemption for the periods 1994-95 and 1995-96 on the footing that its unit was covered by the industrial incentive notifications and whether the authorities were right in denying the claim and directing recovery of refund already granted.

Analysis: The unit had already enjoyed the five-year exemption available under the Industrial Policy Resolution, 1986 from the date of commercial production. The subsequent notifications extending incentives under the later policy regime did not assist the petitioner because the unit was found, on the facts, to be a spice-making unit whose finished products remained spices even if manufactured through a pulverising process. The exclusion of spice-making units and later pulverising units from the ineligible list, together with the footnote protecting only units already receiving incentives under the later policy, did not revive any further entitlement for a unit governed by the earlier policy and already exhausted of its five-year benefit. The challenge to the revisional and appellate orders therefore failed.

Conclusion: The petitioner was not entitled to exemption for 1994-95 and 1995-96, and the authorities were justified in disallowing the claim and recovering the refund.

Ratio Decidendi: An industrial unit that has exhausted the exemption period actually granted to it under the applicable policy cannot claim an extended benefit under a later notification unless the later policy and its protective footnote clearly apply to that unit on the facts and statutory regime governing it.

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