TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 922
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....of exemption under notification No. A-3(1)-95-ST-V (43) dated 06.06.1995 3. The facts of the case in brief are as follows: 3.1 The petitioner is a public limited company duly incorporated and registered under the Companies Act, 1956 (Now 2013) and is engaged in the business of manufacture and sale of Aluminum sections, submerged arc welded MS pipes and coating on pipes, etc. The petitioner has set up various units for the purpose of manufacturing of various other products like the Aluminum division, Saw Pipe division, SPEC division, pipe coating and complex set up. 3.2 The petitioner established the "Saw Pipe Division", mainly for the purpose of manufacture and sale of large diameter welded steel pipes over 400 mm dia. The said unit commenced production w.e.f 17.02.1996. The competent authority of respondents issued an eligibility certificate dated 22.05.1998 under notification No. A-3-24-94-ST-V(108) dated 06.10.1994 under which the said unit became entitled to get an exemption for the period of 9 years from 17.02.1996 to 16.02.2005. 3.3 Apart from the aforesaid notification, the State Government has issued another notification No. 3(1)-95-ST-V (43) dated 06.06.1995 for giving....
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....e eligibility period granted under the earlier notification No. 108 dated 06.10.1994 was also amended and the period of exemption was granted for 11 years. A similar benefit of exemption was also granted to the petitioner in respect of Entry Tax from 5 years to 11 years. 3.5 According to the petitioner after some time another manufacturing plant was set up in the name of 'SPEC Division' w.e.f. 22.04.1999 by investing fresh investment for the equity of Rs. 300 lakhs by the NRI promoters i.e. much more than the requisite 26% of the equity invested by the private promoters. According to the petitioner, this new SPEC division satisfies the requisite condition for grant of exemption under notification No. 43 dated 06.06.1995. The petitioner approached the competent authority of respondents by way of an application for grant of eligibility certificate initially issued under notification No. 108 dated 06.10.1994 and the said certificate was issued to the petitioner on 27.03.2002. After obtaining the said certificate, the petitioner became entitled to an exemption of payment of commercial tax for the period of 9 years from 22.04.1999 to 21.04.2008 meaning thereby the commercial pr....
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....,91,16,670/- of the petitioner company, the promoters' participation both NRI and Indian was Rs. 4,77,39,405/- and the investment in the equity by the NRI promoters was Rs. 1,66,65,405/- which is equal to 34.91% of the Indian promoters which satisfy the condition regarding NRI investment in the equity under the notification No. 43 dated 06.06.1995. Hence, Non-Resident Dealer was granted to the petitioner for the saw pipe division and the same status is liable to be continued in the SPEC division. 5. In support of his contentions, the learned Senior Counsel has placed on the judgment passed by the Division Bench of High Court of Telangana in case of State of Andhra Pradesh vs. Deccan Cements Ltd. reported in (2024) 126 GSTR 77 wherein it has been held that, only because a company is having two different registered units, it cannot be treated as two different persons and in the given circumstances if Unit-I transfers clinker to Unit-II, the same cannot be treated as a sale because a single balance sheet is prepared by the company in respect of all the units and divisions owned and controlled by the company. Learned Senior Counsel has also placed reliance on the judgment of the A....
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....it was only an internal arrangement made by the petitioner without prior approval from the RBI. 8. The decision of granting the tax exemption is a part of the State Government's policy to attract foreign investment especially through NRIs. Therefore, the NRI funds once invested into a particular unit i.e. in the Saw Pipe Division cannot be utilized by way of internal arrangement in the new SPEC division. The petitioner was required to show fresh NRI investment into the SPEC division. Therefore, no interference is liable to be made, and the petitions deserve to be dismissed. Appreciation and conclusion 9. The Directorate of Industries issued eligibility certificate No. 463 dated 22.05.1998 under the notification No. 108 dated 06.10.1994 to M/s Man Industries (India) Ltd. (Saw Pipe Division) at Plan No. 257 B and 258 B, Sector - I, Pithampur, District Dhar (MP) in order to avail the facility of exemption from payment of tax under category C from 17.02.1996 to 16.02.2007. Thereafter, this notification No. 43 dated 06.06.1995 came into operation. The petitioner applied under this notification and obtained certificate of a Non Resident Dealer by fulfilling the conditions mentione....
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....production i.e. 22.04.1999. Therefore, the NRI investment was not found made prior to the establishment of the SPEC division. The NRI investment of Rs. 1,66,65,406/- invested in the Saw Pipe Division had a lock-in period of three years and could not have been transferred in the SPEC division. 12. The conditions for grant of Non Resident Dealer under the notification No. 43 dated 06.06.1995 are reproduced below : "(a) specified in column (2) of the Schedule I below to the extent of the maximum cumulative quantum of tax under the repealed Act or Adhiniyam and the Central Act specified in column (3), for the maximum period specified in column (4), subject to the restrictions and conditions specified in column (5) of the said Schedule; and (b) specified in column (1) of Schedule II below to the extent specified in column (2), for the period specified in the column (3), subject to the restrictions and conditions specified in column (4) of the said Schedule. Who,- (i) are registered under the Adhiniyam and/or the Central Act; (ii) are registered with and certified by the Commerce and Industries Department, Government of Madhya Pradesh on or before 31st December, 1999 to be- (a....
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.... existing industrial unit. Para 6 is reproduced below : (6) New Industrial unit means an industrial unit established by a registered dealer in any district in the State of Madhya Pradesh for the manufacture of any goods, certified to be a new industrial unit by an authority authorised for the purpose by the Commerce and Industries Department of the Government of the Madhya Pradesh, wherein, he commence commercial production on or after 6th May, 1994 and shall include and industrial unit which is established by him in the premises of his industrial unit subject to the condition that he complies with the following requirements : (i) the industrial unit is separately registered as a new industrial unit with an authority authorised for the purpose by the Commerce and Industrial Department of the Government of Madhya Pradesh; (ii) separate factory licence/central excise licence, if necessary, and separate registration certificate under the Adhiniyam and the Central Act is obtained in respect of the new industrial unit; (iii) separate building/she for the new industrial unit is constructed, new plant and machinery is installed therein and separate electric power connection or add....