Punjab-Haryana High Court
M/S Johnson Matthey India Pvt. Ltd vs State Of Haryana & Others on 7 February, 2011
Author: Adarsh Kumar Goel
Bench: Adarsh Kumar Goel, Ajay Kumar Mittal
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
C.W.P. No.12075 of 2007
Date of decision: 7.2.2011
M/s Johnson Matthey India Pvt. Ltd.
-----Petitioner.
Vs.
State of Haryana & others.
-----Respondents.
CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
Present:- Mr. Akshay Bhan, Advocate for the petitioner.
Mr. Vinod S. Bhardwaj, Addl.A.G., Haryana.
Mr. Gurpreet Singh, Sr. Standing Counsel
for Union of India.
---
ADARSH KUMAR GOEL, J.
1. This petition seeks quashing of order dated 7.6.2007, Annexure P-17, passed by the Higher Level Screening Committee (HSSC) of the State of Haryana constituted under the Haryana General Sales Tax Rules, 1975 (for short, "the Rules").
2. By the said order, benefit of tax concession of `888.15 lacs given to the petitioner under Rule 28-C of the Rules has been cancelled on the ground that the petitioner did not have the requisite registration with the Department of Industries, which was a condition precedent for grant of benefit by treating the unit to be 'unit in pipeline'. According to the scheme of the Rules, the C.W.P. No.12075 of 2007 2 industrial units located in specified areas during the specified period, were entitled to concession of deferment of sales tax and conversion thereof to capital subsidy.
3. Case of the petitioner is that its unit was set up in Gurgaon district in collaboration with foreign collaborators for manufacture of automobile components and was registered with the assessing authorities of the Sales Tax Department on 23.3.2000. Secretariat of Industrial Assistance (SIA), Department of Industries, Government of India granted the necessary approval for setting up the unit with foreign collaboration initially at Delhi and later at Gurgaon. The plot in District Gurgaon was allotted to the petitioner on 8.12.1999 and commercial production commenced from 29.9.2000. The Industrial Entrepreneural Memorandum (IEM) was filed with the SIA on 4.8.2000. Since under the Rules, the "units in pipeline" eligible for tax concession were defined as units which came into commercial production after the Rules but were in the process of being set up during 15.11.1999 and 30.4.2000 subject to fulfillment of certain conditions including registration as on 30.4.2000, the petitioner claimed to be eligible. It made necessary application on 11.2.2002 and 6.12.2004. The application of the petitioner was granted by the HLSC as per its decision dated 6.12.2004. The petitioner was held entitled to sales tax concession to the extent of `885.15 lacs for 10 years. The petitioner was issued Entitlement Certificate and it availed of the concessions. After C.W.P. No.12075 of 2007 3 more than one year, notice for cancelling the concession was issued on 13.7.2006, which was contested by the petitioner but vide the impugned order, the benefit was withdrawn on the only ground that the petitioner was not duly registered on the relevant date and was not, thus, "unit in pipeline" as per Rule 28C(o).
4. When the writ petition earlier came up for hearing, the same was allowed vide order dated 27.12.2007, only on the ground that the benefit once having been given, the same could not be withdrawn by reviewing the earlier order. On appeal of the State of Haryana, the said order was set aside by the Hon'ble Supreme Court with the observation that the question as to which was the registering authority, as contemplated under Rule 28C(o) of the Rules and whether filing of IEM with the SIA amounted to registration, was required to be decided. The petitioner was directed to implead the Union of India as party. Accordingly, Union of India has been impleaded as a party and has filed its reply by way of affidavit of Shri Alok Mukhopadhyay, Under Secretary to the Government of India, Ministry of Commerce and Industries, Department of Industrial Policy and Promotion, New Delhi dated 10.8.2010, stating that on 4.8.1999, the petitioner was informed that it was entitled for setting up the unit outside the NCT of Delhi. The location as approved earlier vide letter dated 12.2.1998, was deleted. Letter dated 4.8.2000 was only acknowledgment of IEM application form filed by the petitioner on 24.7.2000 on account of change of location.
C.W.P. No.12075 of 2007 4
5. We have heard learned counsel for the parties.
6. Learned counsel for the petitioner submitted that the unit of the petitioner was required to be treated as "unit in pipeline" under the Rules and the benefit extended could not be withdrawn. Drawing attention of the Court to the stand of the State in its reply filed on 17.7.2007, it was submitted that registration with Industries Department as contemplated under Rule 28C(o) meant making of application of the SIA of Industries Department of Government of India. The relevant averment is as under:-
"4. ....In response, the Excisie & Taxation Department had informed vide letter dated 5.5.2004 that "the medium and large scale industries are required to file memorandum in the prescribed form to Secretarial of Industrial Approval (SIA) in the Ministry of Industry. The receipt of memorandum is acknowledged by SIA. A reference number is given, that is treated as registration as mentioned in the press note No.9 (1991 series). Since acknowledgement of memorandum by SIA is treated as registration there appears to be no justification to waive the condition that the unit should be registered with the Department of Industries for determining eligibility of the unit to be in Pipeline"....."
Thus, cancellation of tax concession was not justified. In any case, the HLSC was required to reconsider the matter in the light of stand of the Central Government that the petitioner had applied to the SIA prior to 30.4.2000.
7. Learned counsel for the Union of India submitted that even though IEM acknowledgement was dated 4.8.2000, C.W.P. No.12075 of 2007 5 subsequent to the cut off date i.e. 30.4.2000, the relevant date is 12.2.1998 when SIA approved the collaboration. Vide letter dated 4.8.1999 followed by letter dated 29.9.1999, the petitioner was informed that the unit could not be set up in Delhi. He submitted that the petitioner could be taken to have been registered prior to the cut off date.
8. In view of above, learned counsel for the State of Haryana fairly states that the matter may have to be reconsidered.
9. Accordingly, we set aside the impugned order dated 7.6.2007 and remand the matter to the Higher Level Screening Committee for passing a fresh order in accordance with law. The petitioner will be at liberty to place such further material as may be considered necessary before the said Committee within one month from today. The Higher Level Screening Committee may take its decision within three months thereafter.
The petition is disposed of.
(ADARSH KUMAR GOEL)
JUDGE
February 07, 2011 ( AJAY KUMAR MITTAL )
ashwani JUDGE