P P P INDUSTRIES Vs. COMMISSIONER OF INDUSTRIES

JUDGEMENT

(1.) These writ petitions are filed by small-scale industrialists in the State seeking directions to the respondents to provide them sales tax holiday up to the sum of Rs. 35,00,000 in terms of G.O. No. 498, Industries and Commerce (IA) Department, dated 16/10/1989. They also seek a consequential direction that the action of the respondents in restricting the amount of such sales tax incentives/exemption to a sum equal to the capital investment of each of the industrial units as illegal, arbitrary and without jurisdiction.

(2.) The undisputed facts are only a few. The petitioners established small scale industrial units involving capital investments of less than Rs. 35,00,000 in each case subsequent to 3/10/1989 which was the relevant date according to G.O. Ms. No. 498 dated 16/10/1989. Admittedly, they were entitled to "tax holiday" in terms of clause 3 of the above order, though the Government Pleader for Commercial Taxes has advanced a rather belated plea that most of the petitioners being oil millers, are excluded from the purview of the concessions/incentives provided in the Government order, since oil mill industry is excluded from the purview of the order under clause 5 thereof. We are of the opinion that this submission cannot be accepted as it is raised much after the District Level Committee set up under clause 7 of the order consisting of representatives of the departments of Industries and Commerce as also Commercial Taxes had treated those industries as eligible and granted them tax holiday limiting the same to the extent of eligibility as found by the Committee. The question with which we are concerned in this batch of writ petitions is not whether the petitioners are eligible for tax holiday, but as to what is the extent of such holiday or the sum in which such concessions/incentives are to be worked out. We hold that it is not necessary for us to consider this novel objection of the respondents which is raised for the first time in these proceedings. We therefore proceed on the basis that the respondents, who had themselves granted the concessions and incentives to a limited extent to the petitioners are not entitled now to contend that oil millers among the petitioners are not eligible for such concessions.

(3.) We have therefore to consider the extent of "tax holiday" whether it shall amount to a sum of Rs. 35,00,000 within a period of five years from the date of commencement of commercial production or it shall be limited to 100 per cent. of the capital investment of each of the petitioners for the above period of five years as certified by the District/State Level Committees. If we go by the terms of the Government order - G.O. Ms. No. 498 dated 16/10/1989, there is no scope for the latter submission, because clause 3 of the order provides that small-scale industries are entitled to sales tax holiday in all districts in the State for a period of five years subject to a ceiling of Rs. 35,00.000 on sales tax during the entire holiday period. The effect of this order is sought to be restricted to 100 per cent. of the fixed capital investment by reason of clause 6-B(ii) of the "Manual of Guidelines for Implementation for New package of Incentive/Liberalised State and Central Scheme, 1989". That provision is in the following terms :