ELECON ENGINEERING COMPANY LTD Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THIS petition has been preferred challenging the action of the respondents authority of demanding and recovering the tax on the basis of the certificates issued by the Sales Tax Department on 1. 11. 1994 and : 27. 6. 1996 being cancelled in the following circumstances. In 1993, respondent - State of Gujarat announced the scheme titled "incentive scheme for Wind Power Generation 1993" (the Scheme) for extending sales tax incentives to industrial undertakings who would set up wind farms in the State of gujarat so as to curb the gap between demand and supply of power in the State. Pursuant to the said Scheme, the petitioner installed three windmills in two lots at lambha, Dist: Jamnagar between the period of March 1994 and March 1995. On 1. 11. 1994, Sales Tax Department issued exemption certificate granting sales tax deferment benefit to the tune of rs. 41,35,503/- and the said certificate was effective from 31st March, 1994. The period of benefit was available for a span of six years that commenced from 31st March, 1994 and ended on 30th March, 2000. On 27. 6. 1996, second certificate was issued by the Sales Tax Department for a sum of rs. 1,25,22,949/- and the said certificate was effective from 30th March, 1995 upto 29th march, 2001.

(2.) ON 9th June, 1998, a cyclone hit coastal regions of the State, more particularly districts of Porbandar and jamnagar resulting in wide spread damage. The windmills installed by the petitioner company were uprooted resulting in stoppage of production of power. One of the conditions of the Scheme was condition no. 7 (b) which reads as under:

(3.) ON 8th March, 2000, the windmills have been reinstalled by the petitioners and this fact is not in dispute. It is the case of the petitioners that despite the aforesaid fact situation, respondent, - Sales Tax authority has held the petitioner liable to pay an amount, because there was, according to the authority, breach of condition No. 7 (b) of the Scheme of running the windmill for a continuous period of six years from the date of commissioning.