Tax exemption for industrial expansion requires statutory authority; policy assurances cannot override the governing exemption notification.

A toll exemption for plant, machinery, building material and other equipment used in industrial expansion depended on clear authority in the governing statute and delegated notification. The Industrial Policy, 2004 and SRO 22 of 2004 confined exemption to components procured for factory construction within five years of unit registration, and the petitioner's 1966 registration placed it outside that protected period. Clause 3.14 of the policy could not override the statutory exemption regime, and later SRO 85 of 2008 indicated that expansion-related relief was introduced only subsequently. Interdepartmental communications could not create tax exemption without authority of law, so the claimed exemption was unavailable.

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Issues: Whether the petitioner was entitled to exemption from additional toll on plant, machinery, building material and other equipment imported for substantial expansion of the industrial unit under the Industrial Policy, 2004 and SRO 22 of 2004.

Analysis: The Industrial Policy, 2004 was examined along with the statutory notification issued under Section 5 of the Jammu and Kashmir Levy of Tolls Act, Samvat 1995. Clause 3 of SRO 22 of 2004 granted exemption on components, plant and machinery, building material and other equipment procured from outside the State for construction of factory only for five years from the date of registration of the unit in the Small, Medium or Large Scale sector, including prestigious units. The petitioner was registered in 1966 and therefore did not fall within the protected period. Clause 3.14 of the Industrial Policy did not override the statutory notification, since the exemption regime had to operate through delegated legislation under the Act. The later introduction of exemption for capital goods used in substantial expansion through SRO 85 of 2008 showed that such benefit was not available earlier. Interdepartmental communications could not create a tax exemption in the absence of authority of law.

Conclusion: The petitioner was not entitled to the claimed toll exemption and the rejection of the claim was upheld.

Final Conclusion: The writ petition failed because the statutory exemption was unavailable on the petitioner's facts and the later expansion-related benefit did not apply retrospectively.

Ratio Decidendi: A tax exemption must have clear authority in statute or valid delegated legislation, and a policy assurance cannot prevail over the governing statutory notification.

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