2013 (2) TMI 688

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....n although no such cut-off date has been specified in the notification. It is submitted by the petitioner that fixing such cut-off date was arbitrary exercise of power on the part of the respondent. 3. It may be appropriate to take note of list of dates and events leading to filing of present writ petition, which are as under: 1984 The petitioner-company commenced its commercial production at industrial unit in village Ganga Honi, Dist.-Rajgarh, M. P. 01-04-1992 In the process of modernization and sophistication the petitioner-company undertook another phase of expansion with a view to convert its unit as an exporting unit. Factual position in this respect not disputed at any stage. 06-10-1994 Notification No. A-3-24-94-ST-V(108) issued by the State Government for implementing the above industrial policy and action plan, (annexure P3). 06-06-1995 Notification No. A-3(1)-95-ST-V(43) issued by the State Government to provide incentive to 100 per cent. exporting units, (annexure P4). The notification grants exemption to three categories of dealer a. The non-resident Indian dealers establishing industrial unit in the State by making specified investment....

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....ioner-unit and held that capital investment made prior to April 1, 1994 has been rightly disregarded/ ignored by the State Level Committee-(annexure PI). 4.  As per the aforesaid eligibility certificate, the exemption of the tax which was required to be 250 per cent, of the total capital investment was granted only with respect to Additional Capital Investment on fixed assets amounting to Rs. 104.11 lacs whereas the claim of the petitioner was to grant exemption by taking into consideration the total investment towards fixed assets as on the date of the eligibility certificate which according to the petitioner was 232.41 lacs. 5.  The petitioner therefore, filed an appeal before the State Appellate Forum which was decided on 10th of October, 2001. The appellate authority set aside the order of the State Level Committee (in short, "the SLC") as non-specking order without assigning any reason and remanded back the matter to the SLC vide annexure P8. In the remand proceedings, the SLC maintained its earlier order and refused to grant benefit of exemption with respect to investment made during the period from 1st of April, 1992 to 31st of March, 1994, which is subject-m....

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.... various claims made by the petitioner-company in the grounds of appeal. Consequently, without commenting on the claim made by the petitioner-company qua the exemption claimed by it, the present petition is allowed to the extent that the appellate order dated June 25, 2007 passed by the State Appellate Forum shall stand quashed. The appeal filed by the petitioner-company before the appellate forum shall stand revived to its original number and shall be decided afresh by the State Appellate Forum, by passing a detailed and speaking order within a period of four months from the date a certified copy of this order is presented by the petitioner-company. The petitioner-company shall appear before the State Appellate Forum on July 7, 2008 and shall be at liberty to make a request for grant of personal hearing through its representative.  The present petition is disposed of accordingly." 7. Now it will be appropriate to take note of the impugned order passed by the State Appellate Forum after the order of remand. In this regard, it may be observed here that the submission made on behalf of the petitioner seeking exemption with respect to the investment made in fixed a....

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....l investment. It is submitted that no power is vested either with the State Level Committee or with State Appellate Forum to fix a cut-off date and restrict the claim of a dealer who has in fact invested huge amount for conversion of its unit into exporting unit. There is no such express or implied delegation in favour of State Level Committee or the State Appellate Forum. It is thus submitted that bringing a cut-off date by the State Level Committee and its approval from the State Appellate Forum is patently illegal, bad in law and without jurisdiction. Hence this writ petition. 12.  Arguments have been heard from both the sides. We have also gone through the written submissions filed on behalf of both the sides. 13.  In so far as the averments made in paragraph No. 11 of the writ petition, in reply filed by the respondent, the averments made therein has been denied. They have denied the claim without giving any specific reply to para 11. According to them, the Notification No. 43 dated 6th of June, 1995 has its application with effect from 6th of May, 1994. reference has been made to sub-clause (c) of the said notification which reads as under:- "(c) a dealer w....

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....is of the conditions mentioned in the notification including clause No. 3 which speaks about the cut-off date. However, the petitioner has not challenged the validity of the notification issued by the State Government, wherein clause 3 has been specified and cleared the controversy involved in the petition. Therefore, unless and until the validity of the notification is being challenged, the present petition is devoid of merit and substance and liable to be dismissed on this ground." 16.  It is further submitted that as per the notification dated 6th of June, 1995, clause 3 speaks about cut-off date. 17.  To appreciate the contentions of both the parties, it would be necessary to take into consideration relevant part of the notification in question which is annexure P4 which reads as under:- "Notification No.-A-3(I)95-ST-V- (43) dated 6th June, 1995 unit put up by NRI, 100 per cent. EOU and exporting units. Whereas, the State Government is satisfied that it is necessary so to do in the public interest, Now, therefore, in exercise of the powers conferred by:- (1) and (2) . . . (a) ... ... ... (b) specified in column (1) of Schedule II below to the e....

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.... (i) up to a period of three years from the date of commencement of commercial production in the NRI industrial unit or a hundred per cent. export oriented industrial unit established by him or in his exporting industrial unit. If his capital investment in such industrial unit up to that date is up to rupees one hundred crores ; or (ii) up to a period of five years from the date of commencement of commercial production in any of his industrial units specified in (i) above, if his capital investment in such industrial unit up to that date is above rupees one hundred crores, shall be taken into consideration. (2) for the purpose of determination of the cumulative quantum of tax in respect of a dealer, specified in serial number 2 of Schedule I who converts his existing industrial unit into a hundred per cent. export oriented industrial unit, the capital investment made by such dealer:- (i) up to a period of three years from the date of such conversion if his capital investment in such industrial unit up to that date is up to rupees one hundred crores ; or (ii) up to a period of five years from the date of such conversion if his capital investment in such industrial unit ....

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....with respect to capital investment in plant initiated. In that case, notification provided deferment of investment to the extent to 75 per cent, but did not provide for any limitation or period. 21.  It will be appropriate to take note of relevant para Nos. 18, 21, 22 of the aforesaid judgment (pages 423 and 424 in 9 VST):- "18. It is not in dispute that in the said entry, during which the same would remain operative, no period far less the period of five or seven years had been mentioned. The only limitation prescribed thereby was that only 75 per cent. of the additional capital investment in Zone B would be allowed where the unit of the respondent is situate. 21. A bare perusal of the said notification would clearly show that whenever the period up to which the exemption, could be obtained was required to be stated had specifically been done therein, as for example SI. Nos. 30A, 41, 42A and 43A, etc. We may, furthermore, notice that against entry 44, however, what is mentioned is the extent to which such exemption would be granted. No period during which such exemption is to be obtained was stated. In other words, no period of limitation was fixed thereby. 22. In....

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....g unit and as such the fixed capital investment till the recognition took place shall qualify for exemption if other condition which made, i.e., the period within which, the unit must be become 100 per cent. exporting unit. 24.  We are therefore, satisfied that in this case, the orders of the State Level Committee and the State Appellate Forum are not in accordance with the notification dated 6th of June, 1995 or in accordance with the industrial policy of the State of M. P. made by the State for the purpose of incentive to the units which make their units 100 per cent. exporting unit within the period specified. 25.  As there is no dispute that the unit of the petitioner has been qualified by a 100 per cent. exporting unit within time framed, which has been permitted by the notification, they are entitled to claim benefit of fixed capital assets as prayed for by the petitioner. 26.  Accordingly, the order of the State Appellate Forum is modified to the extent that the petitioner shall be entitled to the benefit of exemption towards fixed capital assets to the tune of Rs. 232.41 lacs as claimed by them and to that extent, the order of the State Appellate For....

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