VADILAL CHEMICALS LTD Vs. STATE OF A P

JUDGEMENT

(1.) The issue in this appeal is whether the appellant is entitled to exemption from payment of sales tax under the Andhra Pradesh General Sales Tax Act, 1957 as notified by G.O.M.S. No. 117, dated 17th March, 1993 (referred to in brief as the 1993 G.O.).

(2.) The 1993 G.O. was issued by the Government of Andhra Pradesh, Industries and Commerce Department to effectuate the liberalized State incentive scheme for setting up new industries as introduced by the Government in 1989. The package of incentives already granted by the State Government was reviewed whereafter the State Government decided to introduce certain modifications in order to accelerate industrial development in the State. The incentives were granted on the basis of Districts according to their grouping under areas I, II and III. We are concerned with District Medak, falling within area II.

(3.) Apart from an investment subsidy, rebate on electricity charges and a deferment/tax holiday on sales tax for specified periods on products manufactured in the new industrial units were granted in Clauses 5(c) and 5(b) respectively of the 1993 G.O. Medium and large scale industries were given sales tax deferment, whereas tiny and small scale industries were given a sales tax (holiday) exemption. The appellant falls within the latter category. In terms of the 1993 G.O. units like the appellants were given a 5 years sales tax holiday subject to a ceiling of hundred per cent of fixed capital costs of Rs. 35 lakhs whichever was less during the entire holiday period.