SAURASHTRA CHEMICALS LTD Vs. CHAHYA NAGAR PALIKA

JUDGEMENT

(1.) Saurashtra Chemicals Ltd., previously known as Birla VXL Limited along with one Mr.V.N.Vyas, describing himself to be the shareholder of M/s.Birla VXL Limited is before this Court being aggrieved by action of the respondent Chhaya Nagarpalika and other respondents, i.e. District Collector, Deputy Secretary (Nagarpalika) and State of Gujarat in the matter of non-grant of exemption under the Gujarat Gram and Nagar Panchayats Taxes and Fees Rules, 1964 ("the Rules" for short) for their cogeneration Power Plant which is in the nature of 'Captive Power Plant', meaning thereby the power generated is going to be used necessarily for running business of the company.

(2.) At the outset, it is required to be stated that it is not the case of either Nagarpalika or the State authorities that the company in question has now diverted itself from manufacturing of Soda Ash and Soda Bicarb. It is also not the case of the Nagarpalika or the State authorities that the company is selling the power generated by its newly established power plant (Captive Power Plant). In fact, the very term 'Captive Power Plant' is suggestive of the fact that one who is generating power is using the same for its own use. Despite that, only because it is a public money which is to be spent by way of litigation that Nagarpalika as well as the State authorities are out to contest the petition tooth and nail. Be that as it may, the Court has to consider only the merits of the case as placed before it.

(3.) The case of the petitioners is that the company applied for permission from Gujarat Electricity Board, which was granted by communication dated 15.03.1996 for installation of Captive Power Plant of 20 MW capacity at Porbandar Plant. A copy of communication dated 15.03.1996 is at Annexure-D to the petition. Simultaneously, the petitioner company had also asked for the permission to put up new construction vide its letter dated 27.02.1995. A copy of communication dated 27.02.1995 is produced at Annexure-E. The petitioner company then applied for giving recognition to its new Power Plant Unit as a new industry by application dated 16.11.1995. It appears that, this application was filed because of the words used in sub-rule (2) of Rule 36, which pertains to 'Exemption from octroi'. Sub-rule (2) of Rule 36 of the Rules reads as under:-