Himachal Pradesh High Court
M/S. Sps Steel Rolling Mills Ltd vs State Of Himachal Pradesh And Others on 28 July, 2016
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
1
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No.: 7396 of 2014 a/w
CWP No. 7407 of 2014 and
CWP No. 1242 of 2016
.
Reserved on: 21.07.2016
Date of Decision: 28.07.2016.
______________________________________________________________________
CWP No.: 7396 of 2014
M/s. SPS Steel Rolling Mills Ltd. .....Petitioner.
of
Vs.
State of Himachal Pradesh and others .....Respondents.
CWP No. 7407 of 2014
rt
M/s. Suraj Fabrics Industries Ltd. .....Petitioner.
Vs.
State of Himachal Pradesh and others .....Respondents.
CWP No. 1242 of 2016
M/s. Aditya Industries .....Petitioner.
Vs.
State of Himachal Pradesh and others .....Respondents.
Coram:
The Hon'ble Mr. Justice Ajay Mohan Goel, Judge
Whether approved for reporting?1 Yes.
For the petitioner(s): Mr. Ajay Vaidya Advocate..
For the respondents: Mr. V.S. Chauhan, Additional Advocate
General, for respondent-State.
Mr. Vivek Sharma, Advocate, vice Mr.
Satyen Vaidya, Advocate, for respondent-
HPSEB Ltd.
Whether the reporters of the local papers may be allowed to see the Judgment?
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2
Ajay Mohan Goel, J. :
All these writ petitions involve common questions of law, accordingly they are being disposed of by a common judgment.
.
2. Issue involved in these petitions is whether the petitioner-
industries are entitled to power concessions as are envisaged in Clause 9.1 of Industrial Policy, 2004 notified by the Department of Industries vide notification dated 30th December, 2004.
3. M/s. SPS Steel Rolling Mills Ltd., petitioner-company in CWP of No. 7396 of 2014 has set up its Unit at Goalthai in District Bilaspur for manufacturing and trading of MS Billets & TMT bars and other steel rt products. The connected load of the said Unit is 21996.660 KW. Said industry commenced commercial production w.e.f. 30.11.2007.
4. M/s. Suraj Fabrics Industries Ltd., petitioner-company in CWP No. 7407 of 2014 has set up its Unit at Goalthai in District Bilaspur for manufacturing and trading of MS Billets & TMT bars and other steel products. The connected load of the said Unit is 14931.118 KW. Said industry has commenced commercial production w.e.f. 12.04.2006.
5. M/s. Aditya Industries, petitioner-company in CWP No. 1242 of 2016 has set up its Unit at Village Rampur Jattan, Kala Amb for manufacturing steel and other steel products (wrongly mentioned in the writ petition as a company having its Unit at Golthai). The connected load of the said Unit is 3500 KW (Annexure P-3). The said industry has commenced commercial production w.e.f. 07.09.2005.
6. In this regard, the petitioner-companies in CWP No. 7396 of 2014 and CWP No. 7407 of 2014 had earlier also filed writ petitions ::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 3 which were disposed of by this Court by holding the said petitions to be premature (as the petitioner's request for rebate of electricity duty for the period commencing from 2006-2007 to 2010-2011 made vide .
communication dated 24.11.2011 was still pending with the respondent-
authorities) with a direction to the authorities to take decision considering the Industrial Policy, 2004. The competent authority vide order dated 19.07.2014 has rejected the claim of the said petitioner-
companies inter alia on the ground that the petitioners were not entitled of to exemption/rebate of electricity duty as they were in the Negative List.
Another ground on which the competent authority rejected the claim of rt the petitioner-companies was that in the absence of a notification issued by the Department of MPP & Power under the relevant statute/law, the provisions of the Rules cannot be made effective ipso facto. Said order passed by the competent authority is under challenge in CWP No. 7396 of 2014 and CWP No. 7407 of 2014.
7. As far as CWP No. 1242 of 2014 is concerned, the petitioner has approached this Court praying for similar relief as has been prayed in the abovementioned two writ petitions without there being an adjudication on his rights by the competent authority. However, keeping in view the fact that the legal issue involved in this petition is also same and similar as involved in the other two petitions, therefore, this case has also been heard alongwith the abovementioned two petitions. All the parties to the said three petitions have stated that replies and rejoinders filed in CWP No. 7396 of 2014 be also treated as replies and rejoinders of ::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 4 the respective parties in other petitions wherein replies and rejoinders have not been filed.
8. Department of Industries, Government of Himachal Pradesh .
notified a policy vide Notification dated 30th December, 2004, i.e. "Industrial Policy Rules Regarding Grant of Incentives, Concessions and Facilities to Industrial Units in H.P. 2004 and H.P. -Industrial Renewal and Revival Scheme, 2004." This policy was introduced by the Government of Himachal Pradesh in recognition of the importance of an of emphatic Industrial Policy statement as an extremely effective instrument to boost the confidence of investors and catalyze industrial expansion in rt the State of Himachal Pradesh. The policy was intended to lucidly express the State Government's vision and approach towards industrial sector.
The policy statement intended to focus on specific micro factors affecting the overall investment climate in the State, such as technology upgradation, quality improvement and productivity, so that Industrial Units set up in the State can effectively compete and keep pace with global standards. According to the Government, the policy statement was a reflection of its commitment to overall economic development of the State by continuously responding to the dynamic economic forces and carving out a niche in the national economy by responding to changing times and needs. The objective and aims of the policy as contemplated in Clase-2 were as under:
::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 5"2. OBJECTIVE AND AIMS OF THE POLICY:
2.1 This policy intends to:
.
Serve as a guideline for achieving the objective of uniform growth of industry and service sector throughout the State.
Disperse Industries and service sector activities.
Cull together ingredients of a Industrial Policy so as to facilitate generation of employment opportunities of for local resource owners and stakeholders. Clearly State Government's commitment and approach to the development of key infrastructural sector rt like Power, Housing, Social Infrastructure Development, Human Resource Development and Vocational Education so as to create a congenial investment climate for existing industry to grow as well as attract further investments in the State. Clearly spell out industrial incentives of fiscal nature.
Specifically address the issues impeding industrial growth such as procedures for setting up industry, obtaining permissions required under various Labour Laws, addressing issues related Transportation of industrial produce so as to lay the foundation of strong and consistent growth of industrial sector."
9. The Rules Regarding Grant of Incentives, Concessions and Facilities to Industrial Units in Himachal Pradesh, 2004 (hereafter referred to as '2004 Rules') were to come into force w.e.f. 31.12.2004, which was the 'appointed day'.
::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 610. Rule 9 of the same deals with Power Concessions. This rule provided as under:
"9. POWER CONCESSIONS:
.
Power:
Power will be made available to industrial units only as long as they satisfy the eligibility criterion as laid down under Rule 4 of these Rules, specifically Rule 4.1(c) and are also approved and registered with the Department of Industries as also fulfill the other eligibility of conditions laid down for availing incentives under these Rules.
9.1 rt All New industrial units including EOUS/Specified Category of Activities/Thrust Industries/ setting up of state of the art computerized auction houses and quality certifying agencies etc., but excluding those units listed in Annexure-III with a connected load not exceeding 100KW, shall be charged a concessional rate of Electricity Duty at the rate of 10 paisa per unit for a period of 5 years from the date of commencement of commercial production in category B and C areas only.
This concession would be effective from the date of notification by the Department of MPP & Power. 9.2 The existing unit(s) already availing this incentive under the previously applicable incentive Rules (1999 incentive rules) shall continue to avail those incentives, only for the unexpired period of its/their eligibility.
9.3 No electricity duty will be charged from any New Industrial unit or Existing Industrial Unit, on the power generated from their captive power generation sets from the appointed day.
::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 79.4 Out of turn preference and top priority would be given to sanction power connections to 100%Export Oriented Units, Export oriented units, Information Technology projects, Bio Technology projects, and projects .
involving Foreign Direct Investments.
9.5 Industrial Units (except those listed in the negative list-Annexure-III), which involve continuous process, and are registered as export oriented units and food processing industry will be exempted from power load cuts depending upon the system constraints."
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11. As per petitioner-Industrial Units, they are eligible for power concessions as are contemplated in Clause 9.1. Their grievance is that rt their rights which are crystallized under Clause 9.1 of the Industrial Policy and Rules framed thereunder are not being honoured by the Government. In other words, the incentives to which the said industrial units are entitled to under Clause 9.1 of the Rules (supra) are being denied to them arbitrarily by the respondent-State.
12. According to Mr. Ajay Vaidya, learned counsel for the petitioners, Rule 9.1 envisages that all new industrial units excluding those units listed in Annexure-III with a connected load not exceeding 100 KW shall be charged a concessional rate of electricity duty at the rate of 10 paisa per unit for a period of five years from the date of commencement of commercial production in category B and C area only.
His argument is that the Units which have been excluded under Clause 9.1 are those Units which are listed in Annexure-III and have a connected load not exceeding 100 KW. According to Mr. Vaidya though the ::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 8 petitioner-Units (including the petitioner-unit in CWP No. 1242 of 2016, i.e. M/s. Aditya Industries) are units listed in Annexure-III appended with the Rules, which specifies the units mentioned in negative list, but .
because their connected load capacity is more than 100 KW, therefore, these units are entitled to Concessional Rate of Electricity Duty as contemplated in Clause 9.1.
13. On the other hand, Mr. V.S. Chauhan, learned Additional Advocate General has argued that interpretation being given to the said of Rule by Mr. Vaidya is totally misplaced. As per Mr. Chauhan, what Rule 9.1 contemplates is that all new industrial units with a connected load rt not exceeding 100 KW, but excluding those units listed in Annexure-III shall be charged concessional rate on electricity duty at the rate of 10 paisa per unit for a period of five years from the date of commencement of commercial production in category B and C areas only. Therefore, according to him, the contention of the petitioners is totally misplaced and there is no merit in the writ petitions.
14. I have heard the learned counsel for the parties and also gone through the pleadings on record.
15. Rule 9.1 of 2004 Rules reads as under:
9.1 All New industrial units including EOUS/Specified Category of Activities/Thrust Industries/ setting up of state of the art computerized auction houses and quality certifying agencies etc., but excluding those units listed in Annexure-III with a connected load not exceeding 100KW, shall be charged a concessional rate of Electricity Duty at the rate of 10 paisa per unit for a period of 5 years from the date of commencement of ::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 9 commercial production in category B and C areas only.
This concession would be effective from the date of notification by the Department of MPP & Power."
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16. Annexure-III appended with the said Rules contains the names of those industrial units which are reflected as Units in the Negative List as per Government of India, Ministry of Industry and Commerce O.M. dated 07.01.2004 and as defined by the Government of India from time to time. It is not disputed that the petitioner-Industrial of Units are in the Negative List.
17. In my considered view, a harmonious reading of the rt Industrial Policy, 2004 of the Government of Himachal Pradesh and the Rules framed thereunder envisage that power concessions are to be granted to all new industrial units including EOUS/Specified Category of Activities/Thrust Industries/setting up of State of the art computerized auction houses and quality certifying agencies etc. with a connected load not exceeding 100 KW and shall be charged a concessional rate of electricity duty as provided in Rule 9.1 for a period of 5 years from the date of commencement of commercial production in categories B and C. However, units listed in Annexure-III are excluded from the conferment of the said power concessions.
18. In other words, what Rule 9.1 envisages is that those units which are listed in Annexure-III and are having connected load capacity not exceeding 100 KW are not entitled for concessional rate of electricity duty as is provided in Rule 9.1.
::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 1019. This Rule does not contemplate that a new industrial unit which finds mention in Annexure-III (negative list) but has a connected load capacity of more than 100 KW is also entitled for Concessional Rate .
of electricity duty as contemplated in the said Rules. Such an interpretation, if given to Rule 9.1 will frustrate the very purpose for which the said Rule has been framed. Obviously, the purpose of leaving out the negative list of units from being conferred a concessional rate of electricity duty is to dissuade entrepreneurs from setting up units of mentioned in the negative list.
20. Even otherwise, the interpretation being given to Rule 9.1 by rt Mr. Vaidya does not seem to be prudent. According to him, Rule 9.1 bars only those Industrial Units which though find mention in Annexure-III, but are having a load capacity of less than 100 KW. Therefore, Mr. Vaidya contends that as the petitioner-Units have the load capacity exceeding 100 KW, the rider contained in Rule 9.1 does not apply to them.
21. In my considered view, this interpretation being given by Mr. Vaidya to Rule 9.1 is totally incorrect. A perusal of Rule 9.1 clearly demonstrates that the said power concession even otherwise is confined to new industrial units with a connected load not exceeding 100 KW, meaning thereby, that even those industrial units which are not listed in Annexure -III, but are having connected load exceeding 100 KW are not entitled to power concessions contemplated in Rule 9.1. Admittedly, all the industrial units subject matter of the present writ petitions are with connected load in excess of 100 KW. In this view of the matter also, de hors the fact as to whether petitioner-Industrial Units are listed in ::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 11 Annexure-III or not, they are not entitled to power concession as contemplated in Rule 9.1 of 2004 Policy. Even otherwise, keeping in view the importance and object of the Policy in issue, it seems to be totally .
irrational that the Policy will contemplate that an Industrial Unit which finds mention in the Negative List but has a connected load exceeding 100 KW will be eligible for the benefit of Power Concession, whereas a similar Unit having connected load not exceeding 100 KW will not be eligible.
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22. The Competent Authority vide its order dated 19.07.2014 in CWP No. 7396 of 2014 and CWP No. 7407 of 2014 has also held that it is rt admitted case of the petitioner therein that its Industrial Unit is included in the negative list of industries, which effectually means that the unit is not entitled to the power incentives, otherwise specified in Para 9.1 of the incentive Rules, 2004. The said authority has held that when Incentive Rules, 2004 clearly deny the specified incentive of concessional rate electricity duty to industries listed in negative list (Annexure-III) appended to these Rules, the documents being relied upon by the petitioners to advance their case are liable to be rejected.
23. In my considered view, there is merit in the findings returned by the competent authority. During the course of arguments, Mr. Vaidya has relied upon certificate issued by Member Secretary, SWCA, Goalthai dated 14.09.2010 (Annexure P-2) (in CWP No. 7396 of 2014 and CWP No. 7407 of 2014) to advance his case. I am afraid that the reliance placed upon the said certificate is totally misplaced. This certificate refers to concessional rate of CST @ 1% on the goods manufactured as ::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 12 contemplated in Rule 10.3 of Industrial Policy, 2004, which deals with sales tax concessions. Present case pertains to power concessions. This Court is not adjudicating on this aspect of the matter as to whether the .
petitioners have been rightly conferred the benefits as is contemplated in Rule 10.3 of 2004 Rules nor it is upholding the benefits, if any, given to the petitioners under Rule 10.3 of 2004 Rules because that is not the subject matter of the dispute here. In the present case, this Court is concerned with the interpretation of Rule 9.1 and in my considered view, of the said Rule in unambiguous terms restricts the power concessions only to all new industrial units with a connected load not exceeding 100 KW rt excluding those units which are listed in Annexure A-III appended with the said Rules.
24. Therefore, the only inference which can be drawn is that as per Rule 9.1 of the 2004 Policy:
(a) All New Industrial Units with a connected load not exceeding 100 KW which fulfill the criteria provided in the said Rule are entitled for power concession.
(b) Only exception to this is those Industrial Units which find mention in Annexure-III appended with the said Rules, though their connected load also does not exceed 100 KW.
(c) It is evident that Rule 9.1 does not confer the benefit of power concession to new Industrial Units whether or not the same are listed in Annexure-III appended with the said Rules, if their connected load capacity exceeds 100 KW.::: Downloaded on - 15/04/2017 20:54:33 :::HCHP 13
25. In view of what has been held above, it cannot be said that the petitioner-Industrial Units are entitled to power concessions as envisaged in Rule 9.1 of the 2004 Policy. The contention of learned .
counsel for the petitioners to this effect is rejected.
26. Keeping in view the fact that this Court has not found merit in the contentions raised by learned counsel for the petitioner that the petitioner-Units were entitled for power concessions as are contemplated in Rule 9.1 of the 2004 Rules, therefore, the second point adjudicated by of the competent authority with regard to interpretation of Rule 4.1(e) of 2004 Rules is left open.
27. rt Accordingly, in view of what has been discussed above, there is no merit in the writ petitions and the same are dismissed. No order as to costs.
(Ajay Mohan Goel) Judge July 28, 2016 (bhupender) ::: Downloaded on - 15/04/2017 20:54:33 :::HCHP