Sales tax deferral incentives cannot be expanded to cover scrap sales beyond the eligibility certificate's express terms.

Sales tax deferral under an incentive scheme was confined to the products covered by the eligibility certificate and incentive agreement, so the benefit could not be extended to sale of steel scrap generated as a by-product. The assessment authorities were bound by the existing certificate, and the petitioner could not enlarge it in writ jurisdiction after accepting its original terms. The refusal by SIPCOT to expand the certificate remained effective, and an earlier direction to reconsider the issue did not amount to authorisation for automatic inclusion of scrap sales. The Madras HC therefore upheld the assessments and rejected the claim for deferral on scrap turnover.

---

---

Issues: Whether the sales tax deferral benefit granted under the incentive scheme and eligibility certificate extended to the sale of steel scrap generated as a by-product in the manufacturing process.

Analysis: The deferral scheme under the Government Orders and the eligibility certificate was confined to the products manufactured by the unit, and the petitioner had already obtained the certificate and entered into the agreement on that basis. The request to enlarge the certificate so as to include scrap was expressly rejected by SIPCOT, and the petitioner could not seek a fresh or expanded construction in writ jurisdiction after accepting the original terms. The Court held that the assessment authorities were bound by the existing eligibility certificate, and the earlier writ direction to reconsider the scrap issue did not authorise automatic expansion of the concession. The Court distinguished liberal construction of incentive schemes as applied to eligible capital investment but found no basis to treat scrap sales as covered within the existing deferral arrangement.

Conclusion: The claim that sale of steel scrap was covered by the sales tax deferral scheme was rejected, and the assessment orders were upheld.

Final Conclusion: The writ petitions failed because the impugned assessments correctly treated scrap sales as outside the scope of the existing deferral benefit.

Ratio Decidendi: An eligibility certificate and incentive agreement granting tax deferral cannot be enlarged in writ jurisdiction beyond their expressed terms to include a by-product unless the certificate itself covers it.

---