TaxTMI 
TaxTMI 
1995 (7) TMI 337
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.... High Court in five writ petitions. All the five writ petitions were filed by the respondent herein, Jagannath Cotton Company, wherein the question is whether the respondent is entitled to the benefit of exemption from sales tax under the Industrial Policy Resolution of 1986 as well as of 1989. It also involves the question whether the process undertaken by the respondent, applying which he obtains cotton from waste cotton, can be called "manufacturing" activity. With a view to encourage the industrialisation of the State, the Government of Orissa published the Industrial Policy Resolution (dated May 13, 1986) in the Gazette of June 11, 1986. It provided several incentives to those establishing new industries in the State and also those wh....
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.... of goods and (2) that the process adopted by the respondent by which he obtains cotton from waste cotton does amount to manufacture. So far as the first ground given by the High Court is concerned, we find it difficult to accept. A reading of the Industrial Policy Resolution (I.P.R.) of 1986 as well as of 1989 clearly shows that several concessions at substantial cost to public exchequer were provided only with a view to accelerate the pace of industrialisation in the State. Para 3 of the I.P.R. states, "Therefore, the major thrust should be on development of sophisticated industries including electronics, upgradation of technology, modernisation of the existing units and development of functional (?) industrial areas in the fields of el....
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....d of 5 years in Zones'B' and'C' and 7 years in Zone'A' from the date of their commercial production. Deferred amount in respect of each year would be paid in full after the expiry of the period of deferment annually. (iv) Exemption of sales tax on finished products in lieu of deferment--- In lieu of the Sales Tax Deferment Scheme, new medium and large industrial units can opt for exemption of sales tax on their finished products for a period of 5 years if located in Zone A from the date of their commercial production." (Emphasis supplied) A reading of the above provisions in the context of the I.P.R. shows that the incentives are meant only for those units which are engaged in the manufacture or production of goods. Indeed, claus....
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....ded providing for exemption, then the court has to see whether they are the same as the I.P.R. or are they different-and if different, what is the effect of such difference. It is, therefore, necessary to ascertain the relevant provisions in the Sales Tax Act, Rules and notifications, if any, issued thereunder before expressing a final opinion in the matter. There is yet another important aspect upon which there is a woeful lack of material. While the respondent asserts that he obtains cotton from the waste cotton by employing machinery, the exact process employed by him is not set out or clarified in the counter-affidavit filed in these matters. The process adopted by the respondent has also not been noted in the judgment. We do not know ....