RISHABH ELECTRICALS (P) LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) CHALLENGE has been made to the order dated 28.12.2009 passed by the Sales Tax Officer, Assessment Unit, Khurda (for short, STO ) by which applications of the petitioner for refund of Rs.1,86,56,062/ - pertaining to 1999 -2000 have been rejected under Section 14 of the Orissa Sales Tax Act, 1947 (for short, OST Act ).

(2.) SHORN of unnecessary details, the case of the petitioner is that it is a Company incorporated under the Companies Act, 1956 havingits Head Office at 7/33, Ansari Road, Daryaganj, New Delhi and factory at 1053 (P), Aluminium Park, Industrial Estate, AT: Sarua, Dist: Khurda, Orissa. The petitioner has set up a Unit at Village Sarua Gram Panchayat, Dist: Khurda for manufacturing Aluminium wire rods and Aluminium products with a project cost of more than rupees one crore and had commenced its commercial production from 12 th June, 1998. It is a priority industry within the meaning of IPR 1996 and Entry 43 -A of the tax exempted list under the OST Act, 1947. The Director of Industries issued eligibility certificate dated 24.09.1998 for sales tax concession on raw materials, machinery, spare parts, packing materials and finished products under IPR, 1996. In paragraph -6 of the eligibility certificate it was declared that the petitioner -Unit is eligible for the above exemption subject to a ceiling of 200% of fixed assets, i.e., Rs.198.17 lakhs as assessed. The said certificate was issued for eight years from the date of commercial production, i.e., from 12.05.1998 to 11.05.2005. The Director of Industries, Orissa had amended paragraph -6 of the eligibility certificate dated 24.09.1998 by order dated 30.11.1999 to the following effect: -

(3.) ACCORDING to the petitioner, it being a priority industry, is entitled to exemption for maximum period of eight years with the extension of two years and there shall not be any maximum limit on such exemption during the eligibility period of eight years. The STO while passing assessment order for the year 1999 -2000 expressed his inability to allow such exemption in absence of corresponding Finance Department Notification amending Entry 43 -A. Against the said assessment order, the petitioner preferred first appeal. The First Appellate Authority held the petitioner s Unit to be an SSI Unit and as per Entry 42 -A of the exempted list, it was only entitled to exemption up to 100% of the capital investment. Accordingly, direction was given to the STO to recompute the extent of exemption available to the petitioner at the rate of 100% of the fixed capital investment and not up to 200%. Being aggrieved by the first appellate order, the petitioner preferred Second Appeal before the Orissa Sales Tax Tribunal (for short, the Tribunal ) which also confirmed the finding of the 1 st appellate authority.