TaxTMI 
TaxTMI 
2006 (3) TMI 313
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....ed December 22, 1995. By the impugned judgment the appellant-State and Commercial Taxes Department under the Bihar Finance Act are directed to adjust the refundable amount of Rs. 54.5 crores towards sales tax dues from the assessee for the accounting year commencing on and from April 1, 2004. 2.. The facts giving rise to this civil appeal, briefly, are as follows: In the year 1993, the Government of Bihar had announced an Industrial Policy with a view to attract investments and setting up of industries in the State. In the year 1995, the Policy was modified partially. In its introduction, the Policy set out the aims and objectives of the Policy as to create an environment for optimum utilisation of the State resources, to provide quality infrastructure for rapid industrialisation, to attract investments to generate economic activities, reviving potentially viable and closed industries, to boost exports of goods manufactured in the State and to simplify procedures of decision making. As part of the incentives, the Policy envisaged allotment of land in growth centres to corporates for setting up industrial units on lease for 99 years with option for renewal. It also envisaged s....
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....rnment in favour of TISCO had expired and until and unless the head lease in favour of TISCO stood renewed, Tata Cummins Ltd. was not entitled to claim the benefit of exemption from payment of sales tax. Consequently, the claim made by Tata Cummins Ltd. was rejected. Since then, the head lease has been renewed. 6.. Thereafter, Tata Cummins Ltd. challenged the decision of the Deputy Commissioner in Writ Petition No. 2689 of 2000. The division Bench held that Tata Cummins Ltd. not having a valid lease from the State Government or from TELCO, it could not claim the benefit of the exemption under the above two notifications. Thus, the order of the Deputy Commissioner was upheld. 7.. Tata Cummins Ltd. thereafter challenged the decision of the division Bench in this Court by way of petitions for special leave to Appeals Nos. 20375 and 20376 of 2000. 8.. During the pendency of the petitions for special leave to appeal, it was found that the Deputy Commissioner had passed the above order without the approval of the Joint Commissioner as required under the above two notifications. Therefore, the Joint Commissioner called for the records of the case to examine the question of exempt....
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....ly, the State Government and the Commercial Tax Department have been directed to adjust the refundable amount of Rs. 54.5 crores towards sales tax liability of Tata Cummins Ltd. for the accounting year commencing from April 1, 2004. 13.. The facts found by the High Court are, that, after obtaining 37.19 acres of land from TELCO, out of the lands held by TELCO from TISCO under a sub-lease, Tata Cummins Ltd. established its factory in its building. The building was constructed by Tata Cummins Ltd. The industry started its production on and from January 1, 1996. TELCO was 50 per cent owner in the joint venture known as Tata Cummins Ltd. The object of insisting on the ownership of the building or a lease for 15 years, was only to ensure that the industry did not run away after taking the advantage of the benefit granted under the Policy and that the company was really a bona fide investor of capital in the industry intended to be run in the State for a reasonable length of time. It is in this background that one has to see the investments made by Tata Cummins Ltd. As stated above, Rs. 302 crores were invested by Tata Cummins Ltd. which employs more than 800 workmen and which has pai....
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....from the commencement of deferment option." "Notifications S.O. No. 478 dated December 22, 1995: 6.. For getting this facility it shall be necessary that a unit should be installed in such a building which is in exclusive ownership of the proprietor/entrepreneur of the unit or in the ownership of any of its partner or holding company. If the factory or workshop of a unit is installed on the land or building taken on lease, exemption will be granted only when such land or building or both have been acquired by way of a registered lease for a period of minimum 15 years or more. That lease should be in favour of the proprietor of the unit or any partner of the firm or holding company. S.O. No. 479 dated December 22, 1995: 8.. For getting this facility it shall be necessary, that a unit should be installed in such a building which is in exclusive ownership of the proprietor/entrepreneur of the unit or in the ownership of any of its partner or promoter or holding company. If the factory or workshop of a unit is installed on a land or building taken on lease, exemption will be granted only when such land or building or both have been acquired by way of a registered lease....
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....so envisaged under clause 16 that sales tax benefit/ exemption shall be granted to attract investments in order to sustain industrial development in the State. It is in this background, that we have to consider clause 16.1 and clause 16.2 of the Industrial Policy, 1995. The two notifications are merely instruments giving effect to the Policy envisaged under the Industrial Policy, 1995. 18.. Under clause 16.1 of the Policy, all new units were given the facility of "set-off" or "exemption" on purchase of raw material within the State. The period of exemption was 10 years for industries situated in category "A" districts and 8 years for industries situated in category "B" districts. Under clause 16.2, new units were given an option to choose deferment or exemption of sales tax on sale of finished goods for a period of 10 years for category "A" districts and 8 years for category "B" districts from the date of production of the unit with a ceiling of 100 per cent of the fixed investment made by the unit. However, for those industries which were considered as "Thrust Industries" located in "A" category backward districts, the ceiling of exemption or the deferment envisaged was 150 per....