TaxTMI 
TaxTMI 
2015 (1) TMI 81
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....laring notification, dated October 15, 2001 (annexure P1), ultra vires of article 14 of the Constitution of India and for quashing order dated April 26, 2005 (annexure P21), passed by the High Level Screening Committee, constituted under rule 28C of the Haryana General Sales Tax Rules, 1975 (hereinafter referred to as "the Rules"), declining to treat the petitioner as a "unit in pipeline." 3. Counsel for the petitioner submits that the petitioner was incorporated in 1996 with the object of manufacturing and selling HDPE woven fabrics and other packing material. The petitioner purchased land in village Patti Kalyana on April 3, 1996 and obtained change of land use certificate on August 18, 1997. The petitioner was in the process of setting up a unit, when it received information, based on an advertisement issued, by the State of Haryana in Hindustan Times, on June 30, 2000, that exemption would be granted to "units in pipeline" as on April 30, 2000. The petitioner immediately sent a communication, dated July 5, 2000, to the General Manager, District Industries Centre, Panipat, praying that his unit be included in the list of "units in pipeline". The petitioner had already applied f....
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...., if a unit was a "unit in pipeline" as on April 30, 2000, or any other later date to be notified by the Government, it would be treated as an "eligible unit". The operative period for availing of concessions under rule 28C(3)(e) of the Rules is from November 15, 1999 to April 30, 2000, except in the case of "units in pipeline" where the date is April 30, 2000 or any other later date to be notified by the Government. The State of Haryana without considering that rule 28C(3), was in operation and units like the petitioner had already taken steps to set up a unit, issued notification dated October 15, 2001, amending rule 28C(3) with effect from November 15, 1999, by enacting sub-rule (o) to define "units in pipeline" in the following terms:- "(i) is registered with the Department of Industries; (ii) has arranged land or premises by way of purchase, allotment, lease or rent; (iii) has applied for finances from a regular financial institutions; and (iv) would start production within two years, i.e., before the May 1, 2002." 5. The amendment was notified on October 15, 2001 but operates retrospectively from....
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.... units to comply with the definition of "units in pipeline". It is further submitted that the definition is unreasonable as a person, who was in the process of setting up a unit could not possibly conceive that such conditions would be notified retrospectively and even otherwise it is impossible to fulfil these conditions, by April 30, 2000, as the notification was itself issued on October 15, 2001, 1 1/2 years after April 30, 2000. It is further submitted that the definition of "unit in pipeline" is merely clarificatory and was enacted so as to put at rest inconsistencies in orders passed by the Higher Level Screening Committee and, therefore, cannot be interpreted to divest a party of a vested right, to be considered for exemption. The notification operates to the prejudice of the rights of the petitioner and may, therefore, be declared prospective. It is prayed that the writ petition may be allowed, the impugned notification as well as the impugned order holding that the petitioner is not a "unit in pipeline", may be set aside. 7. Counsel for the State of Haryana submits that incentives, concession and exemptions are not legally enforceable and, therefore, do not confer any rig....
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.... is rather surprising that, though, the petitioner purchased land in 1996, it did nothing after 1996, to set up a unit as all acts relevant for seeking exemption were carried out after April 30, 2000. The petitioner cannot be granted or considered as a "unit in pipeline" with or without the amendment and, therefore, the writ petition may be dismissed. 8. We have heard counsel for the parties, perused the paper book, considered the statutory provisions as well as the impugned order. 9. The dispute in the present case is whether the amendment defining "units in pipeline" set out in rule 28C(3)(o), by notification dated October 15, 2001, is ultra vires of any provision of the Constitution of India or the Haryana General Sales Tax Act,1973 (hereinafter referred to as "the Act"), whether the said definition operates to the prejudice of the petitioner and whether the order rejecting the petitioner's application for treating the petitioner as a "unit in pipeline" as on April 30, 2000 is legal and valid. The petitioner has advanced as his first submission that as rule-making power is exercised by a delegate, the rule could not be enacted with retrospective effect. The submission, tho....
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.... State of Haryana has from time to time enacted provisions to exempt and or defer payment of sales tax, by notifying rules 28A and 28B. On July 28, 2000, the State of Haryana introduced rule 28C to grant deferment from payment of sales tax, for the operative period, i.e., November 15, 1999 to April 30, 2000, as set out in rule 28C(e) of the Rules. Rule 28C defines an eligible industrial unit, as follows:- "28C(c) 'eligible industrial unit' means:- (I) A new industrial unit or a unit undertaking expansion or diversification which, on the date of commercial production of new/expanded/diversified unit, fulfils the following conditions:- (i) holds a certificate of registration under the Act, if it is a new unit; (ii) to (v) . . . (vi) has come into commercial production during the operative period; or was in pipeline as on 30th April, 2000 or any other later date notified by the Government.  ....
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....e amendment, namely, that he was not registered with the Department of Industries before April 30, 2000. In addition, it is contended that the amendment reveals that the definition of "units in pipeline" would not apply if it is prejudicial to the interest of an applicant. The retrospective operation of the definition adversely affects the rights of the petitioner to claim concession from payment of sales tax, as the petitioner could not have possibly conceived that such conditions would be imposed with retrospective effect. 17. The arguments, in our considered opinion, are misconceived if not altogether fallacious. The definition of "eligible industrial unit", as enacted before the amendment required an industrial unit, including "units in pipeline" to be registered and holding a registration certificate. The amendment enacted by sub-rule (o) merely reiterates this part of the original provision and says nothing more. The petitioner, admittedly, was not registered with any Department of the Government before April 30, 2000. Admittedly, the petitioner applied for registration with the Department of Industries pursuant to an application made on May 17, 2000 and was granted a provis....