AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 711
X X X X Extracts X X X X
X X X X Extracts X X X X
....been denied to petitioners?" 2. Before referring to facts of each individual case, it is relevant to note at the outset that respondent - State introduced new Industrial Policy w.e.f. 15.11.1999 vide notification dated 12.11.1999. As per said Industrial Policy, 1991, certain industries were categorised as delicenced industries for which no industrial licence was required to be taken but a form i.e. Industrial Entrepreneurs' Memorandum (IEM) was to be submitted. Series of press notes were issued in respect to IEM form as is detailed in paras 2 and 3 of CWP-4838-2006 with copies thereof attached as Annexure P-1 (Colly). 3. Public notice (attached as Annexure P-5 with CWP-4838-2006) was issued wherein it was stated that State of Haryana had decided to discontinue tax incentives extended to the industry with 30.04.2000 as the cut off date. It was further decided to prepare a list of such industrial units in pipeline as on or prior to 30.04.2000. Norms for determining cases in pipeline were as under:- "a) the unit is registered with the Department of Industries; b) the unit has been allotted or acquired land for itself; c) the unit has applied for financ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g the operative period, in one go, not exceeding a period of one year, exceeds 25% of the fixed capital investment (gross block) of the unit before diversification at the same or new location: Note-I. - Tax benefits in the case of diversification shall be available in respect of turnover product(s) different from the manufacture of the unit before diversification. product(s) of Note-II. - For the purpose of computing the tax benefits under this rule, unit shall append with its tax return, a calculation sheet clearly showing break-up of turnover and tax benefits thereon claimed in respect of diversification. 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) is not an undertaking where the State or Central Government holds 33% or more shares; (iii) is not included in negative list at Schedule IV appended to this rule nor any of its products is covered in the said Schedule: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefrom the highest turnover achieved in any previous year of the existing unit, This will be taken as the turnover of the expansion for the purposes of this rule: Provided that the ratio of turnover of the expansion to turnover of the existing unit shall not exceed ratio of fixed capital investment of the expansion to fixed capital investment (gross block) of the existing unit. Note-II- For the purpose of computing the tax benefits under this rule, unit shall append with its tax return, a calculation sheet clearly showing break-up of turnover and tax benefits thereon claimed in respect of expansion. xxx xxx xxx TABLE I 1) New Industrial unit Category Extent of Tax concession Small scale Medium/large scale Period Scale of tax concession A 125% of fixed capital investment 100% of fixed capital investment 9 years 1st to 9th year 50% B 125% of fixed capital investment 100% of fixed capital investment 10 years 1st year 80% 2nd and 3rd year 60% 4th to 7th year 50% 8th year 40% 9th year 30% 10th year 20% C 150% of fixed capital investment 125% of fixed capital investment 11 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... acknowledged by SIA, with a reference number being given, which is treated as registration, therefore, there was no justification to waive the condition of unit being registered with Department of Industries for determining eligibility of the unit to be in pipeline. 10. In this backdrop, brief facts in each of writ petitions are as under:- CWP No. 4838 of 2006 (i) Petitioner in this writ petition claims to be a Public Limited Company incorporated under Companies Act, 1956. Petitioner - Company obtained certificate of incorporation in the name and style of M/s Sona Precision Products Limited on 20.08.1993 and thereafter fresh certificate of incorporation was issued on 26.10.1994 upon change of petitioner's name to M/s Sona Somic Components Limited and yet again fresh certificate of incorporation was issued on 18.03.1999 upon change of petitioner's name to M/s Sona Somic Lemforder Components Limited. (ii) It is pleaded that petitioner was engaged in manufacture of inner and outer ball joint assemblies used in production of cars, jeeps, vans and commercial vehicles. IEM registration was obtained by petitioner with SIA, Ministry of Industry, Government of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onducting a limited post facto check as to whether proposed manufacturing activity required an industrial licence or not. Aggrieved of denial of benefit, CWP-4838-2006 was, thus, filed. (iv) Written statement on behalf of respondents No. 1 to 4 denying the averments as raised was filed. CWP-8802-2004 (i) Petitioner is stated to be a Public Limited company incorporated under Companies Act, 1956 engaged in cold rolling unit of stainless steel coil. It is stated that petitioner originally went into production w.e.f. 01.03.1991 with installed capacity 800 mts. per year and registered as small scale unit with the Department of Industries Haryana. First expansion of unit took place in 1993 and capacity thereof increased by another 1800 mts i.e. total of 3600 mts per year. In accordance with Policy in existence at that time, petitioner applied for exemption from payment of sales tax. In tune with Policy in force, petitioner was afforded 100% exemption from payment of sales tax to be availed for a minimum period of 9 years. Second expansion of petitioner was undertaken in 1996 and capacity increased to a total of 6000 mts. per year. 100% exemption was again grant....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dated 22.10.2001 in prescribed form ST 70B for grant of sales tax concession as a new industrial unit under Rule 28C of HGST Rules. Certain documents were sought from petitioner which it is stated were duly submitted. It is further stated that after two years of submission of documents, petitioner was asked to attend High Level Screening Committee meeting alongwith supporting documents as sub-Committee while examining the case had found that condition No. 1 was not fulfilled with registration/IEM for expansion of unit not being obtained and there being no proof of financing of project by any financial institution or bank. Petitioner's application was rejected by High Level Screening Committee on the premise that petitioner had not obtained registration/IEM for expansion of its unit at IMT, Manesar. Aggrieved therefrom, writ petition was filed. (ii) Written statement on behalf of respondents No. 2, 3 and 5 was filed refuting the averments. It is stated therein that petitioner - Unit obtained IEM for existing unit for Government of India vide memo dated 25.11.1991 for manufacturing of rear view automobile mirrors. Its case was approved by High Level Screening Committee in i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tter was put up before High Level Screening Committee which rejected petitioner's application on 14.02.2006. Dismissal of writ petition is, thus, sought. 11. Learned counsel for petitioner in CWP-8802-2004 vehemently argued that first and foremost there was no requirement whatsoever for fresh IEM registration. Furthermore, even if it would be so, in case of petitioner in CWP-8802-2004, it should have been waived. Moreover, there is not much legal significance attached to registration of unit with Department of Industries for qualifying as a unit in pipeline. 12. Learned senior counsel for petitioners in CWP Nos. 4838 and 4839 of 2006 also reiterates that once the unit was already running, there is no question of fresh registration/issuance of IEM. Furthermore, even if it is so accepted for the sake of argument, though not admitted, subsequent issuance of IEM should necessarily relate back to the date of first IEM which was issued to petitioner. Petitioners, it is submitted, are duly entitled to the benefit in question. It was vehemently argued that respondents kept sitting on their applications for a number of years and then have incorrectly proceeded to reject petitioners' r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 02.06.2000. After expansion of their unit, petitioner had applied for sales tax concession under Rule 28C of HGST Rules on 23.02.2001. IEM dated 02.06.2000 for manufacture of inner and outer ball joints as applicable to cars, jeeps, vans and commercial vehicles was submitted. Proposed capacity was 1260000 numbers, which is the expanded unit with existing capacity of 1440000 numbers i.e. total capacity of 2700000 numbers. Petitioner - unit obtained IEM for expanded unit on 02.06.2000 i.e. beyond the cut off date. 17. In the case of petitioner in CWP-8802-2004, petitioner initially obtained SSI registration from General Manager, District Industries Centre, Hisar on 06.06.1985. Two applications for benefit of sales tax exemption were submitted on 26.11.1993 i.e. one application for original unit in which date of commencement of commercial production was stated to be 01.03.1991 and another application for expanded unit in which date of commercial production was 15.10.1993. Lower Level Screening Committee rejected benefit of sales tax exemption for the original unit being time barred. Insofar as expanded unit i.e. regarding first expansion, petitioner's application was rejected by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....anded its unit and then applied for sales tax deferment in the name of M/s Sandhar Locking Devices Limited (Mirror Division), Plant-II situated at village Dhumuspur, P.O. Bhadshahpur Gurgaon on 22.04.1999 under Rule 28B for manufacturing of automobile mirrors. Petitioner then obtained IEM for their expanded unit of enhanced capacity for manufacturing of automobile locks/switches, automobile rear view mirrors, automobile doors, clasps and frames with clasps, incorporation locks. Acknowledgement is dated 16.05.1997 (Annexure P-3) with the said writ petition. Eligibility certificate was issued to petitioner on 14.03.2000 as new industrial unit under Rule 28B of HGST Rules. Petitioner's request for change of option of switch over of deferment of tax to tax concession from Rule 28B to Rule 28C for balance tax benefit available to credit of applicant - unit to be utilised upto 21.02.2008 was approved by HLSC with the direction that balance quantum of benefit and remaining period of availment of sales tax concession will be decided by DETC concerned. 20. It is pertinent to note that petitioner in CWP-4839-2006 again applied in form ST 70B for sales tax concession i.e. subject matter of....