TaxTMI 
TaxTMI 
2007 (11) TMI 576
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....de for issuance of direction to the respondents to maintain the earlier decision dated December 6, 2004, communicated vide letter dated March 18, 2005 (P 14). Brief facts of the case are that the petitioner-company was set up as a joint venture company with foreign collaborators, namely, M/s. Matthey Finance BV, Netherlands (Finance) and Johnson Matthey PLC, U.K. (Technical) for manufacturing and trading of automobile components, namely, catalytic converters, having its unit at plot No. 12, Sector 3, IMT Manesar, Gurgaon (P 2). On January 9, 1998, an application was filed with the Secretariat of Industrial Assistance (hereinafter referred to as "the SIA"), Department of Industrial Policy and Promotion, Ministry of Industries, Government of India, New Delhi, for grant of approval of foreign collaboration, which was granted on February 12, 1998 (P 3). In the approval so granted the proposed location of the industrial unit of the petitioner-company was shown as "Okhla Industrial Area, Phase-I, Delhi". The petitioner-company filed an application for amendment in SIA approval. Accordingly, the SIA issued amendment letter dated September 29, 1998, stipulating that the proposed unit was ....
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....specified format was to be filed by the new industrial unit with the SIA. In order to attract industrial investment in the respondent-State, the State of Haryana announced sales tax concessions for new units. On July 28, 2000, one such scheme was notified by inserting rule 28C in the Rules. As per the scheme, sales tax concessions were granted to the "eligible industrial units", which had come into commercial production during the operative period, i.e., from November 15, 1999 to April 30, 2000 or to such units which were in pipeline as on April 30, 2000 (P11). It is claimed that the industrial unit of the petitioner-company at IMT Manesar, Gurgaon, is qualified as a "unit in pipeline" as on April 30, 2000 in accordance with the provisions of clause (o) to sub-rule (3) of rule 28C of the Rules, which was inserted subsequently vide notification bearing No. SO No. 161/H.A.20/73/ S-64, dated October 15, 2001, with effect from November 15, 1999 (P17A). Sub-clause (o) to sub-rule (3) of rule 28C of the Rules, reads as under: "28C(3)(o) 'units in pipeline' means an industrial unit which as on the April 30, 2000, fulfils the following conditions: (i) is registered with the Dep....
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....ter, the case of the petitionercompany was considered by the HLSC in its 99th meeting held on June 7, 2007 and the benefits were withdrawn. The operative part of the HLSC decision reads thus: ". . . In this case HLSC which as per the minutes of the 89th meeting held on December 6, 2004 was shown to have granted the benefit of tax concession (Rs. 885.15 lacs) to the applicant, M/s. Johnson Mathey India Pvt. Ltd., P. No. 12, Sector 3, IMT, Manesar, Gurgaon (as a new unit) noted at the time of confirmation of the aforesaid minutes in its 90th meeting held on August 10, 2005 that the benefit was in fact not granted on December 6, 2004 to the applicant. The decision on the date was to defer the case for the next meeting in order to have an explanation of the unit as regards its IEM dated February 12, 1998 and IEM dated August 4, 2000. The unit was required to explain whether the IEM dated February 12, 1998 was taken for setting up a unit in Haryana or unit at Okhala. It was also to explain whether the IEM dated August 4, 2000 was intended for the further expansion programme of the unit in Haryana which has applied for tax concession. Sh. Kedar Sharma, Advocate and Sh. Naveen Kumar, Fi....
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....is registered with the department; (b) Has been allotted land for the factory; (c) The industry has applied for finances from a regular financial institution; and (d) Would start production within two years." After issuance of a public notice dated July 4, 2000 in the leading newspapers by the Director of Industries, Haryana, mentioning the criteria for considering the cases of units in pipeline, rule 28C was inserted in Chapter IV C of the Rules, vide notification dated July 28, 2000, with effect from November 15, 1999 (P 11). After referring to provisions of sub-rule (3)(b) and (3)(c)(vi) of rule 28C of the Rules, it has been asserted by the respondents that operative period means the period starting from November 15, 1999 and ending on April 30, 2000 except for the units in pipeline as on April 30, 2000 or any other later date notified by the Government. It has been admitted that notification regarding the unit in pipeline was issued on October 15, 2001 by the Excise and Taxation Department. It has further been admitted that the case of the petitioner-company was considered by the HLSC in its 89th meeting held on December 6, 2004 and benefit of sales tax concession, a....
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....the Department of Industries on February 12, 1998/August 4, 2000. He has made a reference to para 4 of the written statement to point out that receipt of memorandum is acknowledged by the SIA and a reference number is given, which is treated as registration as per press note No. 9 (1991 series). Learned counsel has also made reference to the admission made in para 6 that the case of the petitioner unit falls under the operative period of rule 28C and it was covered under the definition of "unit in pipeline" fulfilling the four conditions. The second condition that the unit has arranged the land or premises by way of purchase, allotment, lease or rent also stand satisfied as the land was allotted to the petitioner-company on December 8, 1999 by the HSIDC at plot No. 12, Sector 3, IMT Manesar, Gurgaon (P 5). Learned counsel has maintained that the third condition is also fulfilled as the unit had arranged finances from their own sources much before April 30, 2000. The fourth condition that the unit was to start production within two years, i.e., before May 1, 2002 is also complied with as the commercial production commenced from September 29, 2000. Learned counsel has emphasised th....
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....arned State Counsel has argued that rule 28C of the Rules is in the nature of concessions, which cannot be claimed as a right. She has then referred to the power of review as per sub-rule (15) of rule 28C of the Rules. According to the learned counsel the petitioner's unit did not fulfil the first condition of "unit in pipeline" as per the requirement of clause (o) of sub-rule (3) of rule 28C of the Rules and, therefore, the HLSC has lawfully rejected the case of the petitioner-company. She has pointed out that the SIA was issued to the petitioner-company at the address of M/s. Mathey Finance, B.V. Netherlands, C/o S.S. Kothari and Company, 9 A, Atma Ram House, 1, Tolstoy Marg, New Delhi (P 2), proposing the location at Okhla Industrial Estate, Phase I, Delhi. She has further submitted that the Industrial Entrepreneur Memorandum (for short, "the IEM") for establishing the proposed unit in Haryana was finalised on August 4, 2000 which is subsequent to the cut-off date postulated by rule 28C, namely, April 30, 2000. She has also submitted that no unit has been given the benefit of sales tax concession, who do not fulfil the conditions of "unit in pipeline" as per the requirement....
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....ial institution; and (iv) would start production within two years, i.e., before the May 1, 2002 (12)(a) The entitlement certificate granted to an eligible industrial unit shall be liable to be withdrawn by Higher Level Screening Committee/Lower Level Screening Committee if it is established that it has been obtained by fraud, deceit, misrepresentation, mis-statement, concealment of material facts or if it is found that the unit was otherwise not eligible for tax benefit: Provided that no order of withdrawal of the entitlement certificate shall be passed without affording a reasonable opportunity of being heard to the affected unit. (b) For sufficient reasons to be recorded in writing, if the Deputy Excise and Taxation Commissioner of the district comes to the conclusion that a unit is misusing the benefit or contravening any condition imposed by this rule or in the entitlement certificate, he may suspend the entitlement certificate for a period of ninety days after affording an opportunity of being heard to the unit, but shall immediately send a report to Higher Level Screening Committee/ Lower Level Screening Committee and the same shall be taken up for consideration by the co....
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....ts, failing which the unit shall be liable to pay interest at the rate of two per cent per month on the amount due up to the date of payment. (d) Upon withdrawal or cancellation of entitlement certificate a unit shall have no right to avail of tax concession under this rule notwithstanding that any appeal or review is pending against such withdrawal or cancellation." A perusal of aforementioned provisions of rule 28C shows that a unit in pipeline as per the language of sub-rule (3)(o) of rule 28C would be that industrial unit which fulfils the following conditions on April 30, 2000: (i) it is registered with the Department of Industries. (ii) it has arranged land or premises by way of purchase, allotment, lease or rent; (iii) it has applied for finances from a regular financial institution; and (iv) it is to start production within two years, i.e., before May 1, 2002." The HLSC after taking into account the aforementioned conditions appears to have issued and approved the case of the petitioner-industrial unit as a new industrial unit eligible for sales tax concession to the tune of Rs. 885.15 lacs which is 100 per cent of total FCI for a period of 10 years from the d....
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....0 by the HSIDC, at plot No. 12, Sector 3, IMT-Manesar, Gurgaon, therefore, second condition of the unit is also complied with. The third condition is also fulfilled that they have arranged finances from their own sources, i.e., self financed. The investment has been made prior to April 30, 2000 by the unit. The third condition is also fulfilled by the unit. The date of commercial production of the industrial unit is September 29, 2000. This condition is also fulfilled because the unit came into commercial production before May 1, 2002. Further, the Joint Director (FA) apprised the committee that the application for grant of sales tax concession was made on February 11, 2002. The application is to be submitted within 120 days from the date of commercial production or within 120 days from the publication of the rule 28C whichever is later. This is a case of 'unit in pipeline' and the relevant notification was issued on October 15, 2001. If this date of publication 'unit in pipeline' is taken then the application is made within the stipulated period. The committee deliberated over this issue and observed that since the relevant notification of unit in pipeline was is....
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.... registered with the competent authority before April 30, 2000, i.e., on February 23, 2000. In other words, the HLSC in its 89th meeting held on December 6, 2004 has resolved the controversy that the unit was registered with the Department of Industries for SIA and IEM before the cut-off date. With regard to other three conditions, there was no controversy as all other three conditions were duly fulfilled. After issuance of order on March 18, 2005 (annexure P 14) communicating the decision of HLSC dated December 6, 2004, the petitioner unit was issued entitlement certificate postulating that the certificate was to be valid for the period from August 23, 2005 to March 27, 2015 and the quantum of tax concession available to the petitioner unit would be Rs. 885.15 lacs. Thereafter, even a revised entitlement certificate in proper form BAT-G-15 under rule 69(2) was also issued on March 28, 2005. The petitioner has claimed that unit has utilised total benefits available under the entitlement certificate. The language of the show-cause notice for withdrawing the benefits given by HLSC makes an interesting reading. It has been pointed out in the show-cause notice dated July 13, 2006 (an....
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.... order to the Tribunal or the Higher Level Screening Committee, as the case may be. Review can be filed within one hundred eighty days of the date of order. Condonation of delay in filing review shall not be permissible. The Tribunal or the Higher Level Screening Committee of its own accord at any time, or on basis of an application, after giving notice to the party, review any order made by it." A perusal of the aforementioned provision makes it evident that HLSC could review its earlier decision, which may be shown to be erroneous from the discovery of any new and important matter/evidence which was not considered earlier or there is a mistake apparent on the face of record or for any other sufficient reasons. The only reason for reviewing its earlier decision of HLSC given in the impugned order is that IEM dated February 12, 1998 did not relate to the expansion of the company and the same was issued only after the cut-off date on August 4, 2000. The aforementioned issue, has already been adjudicated upon by HLSC in its 89th meeting held on December 6, 2004 by recording the conclusion in favour of the petitioner. The question for consideration is whether an issue which ....