TaxTMI 
TaxTMI 
2007 (9) TMI 389
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....nt herein which is a large industrial unit had set up a sponge iron factory at Bileipada, Joda, in the district of Keonjhar, Orissa. Indisputably, it is classified as a large scale industry in terms of Industrial Policy Resolution (IPR), 1980 adopted by the State. In or about 1989, IPR was adopted for existing industries classified under IPR, 1980 wherein benefits for exemption from payment of sales tax on finished products were to be granted subject to the terms and conditions laid down therein including repayment of loan availed under IPR, 1980. Before the benefits of the said IPR could be obtained by the respondent, the Government of Orissa announced IPR, 1992 in terms whereof the existing industrial units could obtain exemption or deferment of sales tax on finished products and capital investment subsidy provided it had undergone an expansion/modernisation/ diversification of its unit. For our purpose, we may only notice paragraphs 7.4 and 7.5 of IPR, 1992 which are in the following terms: "7.4 Exemption/deferment of sales tax on raw materials, spare parts, and finished products of small, medium, large scale and pioneer industrial units.-New small, medium and large scale indu....
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....t, it filed a writ petition before the High Court of Orissa, Cuttack, which was marked as O.J.C.No.2213 of 2001. By reason of the impugned judgment, a Division Bench of the Orissa High Court Reported as Tata Sponge Iron Ltd. v. State of Orissa [2007] 6 VST 461 (Orissa). allowed the said writ petition directing: "1. Opposite party No. 2-The Director of Industries, Orissa, is directed to reconsider the petitioner's application for re-evaluation of its investment for expansion of the unit and determine afresh, the extent to which the petitioner is entitled to the sales tax incentives and also to make necessary amendment to the eligibility certificate granted by it in accordance with the IPR, 1992. 2.. The stipulation of a 'time period' in the certificate of eligibility granted to the petitioner in form No. II-A under annexure 4 to the writ petition is declared ultra vires the IPR, 1992 and shall have no effect. Necessary amended 'eligibility certificate' in terms of directions in paragraphs 1 and 2, be issued to the petitioner within two months from the date of communication of this judgment. 3.. After issue of the revised eligibility certificate as directed above, the petitioner-....
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....s tax concessions admissible under Industrial Policy Resolution 1992 (IPR 1992) effective from August 1, 1992 for your information and necessary action. You are requested kindly to bring it to the notice of all concerned for proper implementation of the provisions of IPR 1992." The learned Additional Solicitor General would submit that the respondent herein made expansion of its undertaking in the year 1997 and it having asked the benefit in terms of IPR, 1992 for a period of five years only as would be evident from its application filed in prescribed form II-A dated May 26, 1999 which is in the following terms: "This certificate is issued for 5 (five) years of its commercial production or expansion/modernisation/diversification and is valid from the date of September 7, 1998 to September 6, 2003."; It is estopped and precluded from contending otherwise, and, thus, it cannot be permitted to change its stand by seeking an amendment therefor as has been sought to be done by its letter dated April 7, 2000 and, thus, it was rightly rejected by the Government of Orissa in terms of its letter dated May 17, 2000. The said letter dated May 17, 2000 reads as under: "Paragraphs 7.4 and....
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....ted in the IPR itself and not to the industries/activities covered under paragraphs 7.2 and 7.5. Since the petitioner's industry is covered in the EMD category under para 7.5 of the IPR, 1992 read with entry No. 44 of S.R.O.No.1091 of 1992, clause 5 of the 'operational guidelines' cannot be said to apply to it. We are of the view that clause 5 of the 'operational guidelines' and stipulation in the eligibility form (the eligibility certificate), to the extent that it provides for a period of time, is not in consonance with the IPR, 1992, is clearly without jurisdiction/without sanction of law and is also ultra vires to the IPR, 1992. (c) The operational guideline and/or instructions were made for administration of incentive contained in the policy and not for the purpose of imposing any new stipulation and/or conditions alien to and/or not in consonance with the passing of the 1992 Policy. Such a stipulation cannot in law be read into and allowed to operate since it would frustrate the very objective sought to be achieved by the 1992 policy declaration. It was furthermore held: "Drawing an analogy from the aforesaid principles of law, we are of the view that for the incentive und....