MANJUSHREE EXTRUSIONS LTD Vs. STATE OF ASSAM

JUDGEMENT

(1.) As many as nine industrial units viz. Manjushree Extrusions Ltd., A Bakers Pvt Ltd, GW Mills Ltd, United Soft Drinks Pvt Ltd., Sunrise Biscuit Co. Ltd, MCIP Ltd, P.A.A.Steel Ltd and M/s KU Pvt Ltd., filed as many as nine writ petitions before the learned Single Judge in which the basic relief claimed by them was that they were entitled to full sales tax exemption as was contemplated by the Industrial Policy of 1991 issued by the State of Assam if they undertake expansion, modernisation and diversification work in their existing industrial units to the extent of at least 25% in capital investment and 10% in additional employment. It was further the case of the industrial units in the writ applications that having granted full sales tax exemption, the Govt. of Assam could not issue notification in the year 1995 and frame a scheme contrary to the one which was framed in the year 1991. According to the industrial units, a right, which was vested in the industries, viz., the right to claim full sales tax exemption, has been illegally taken away by issuance of a notification in the year 1995 and this is what could not precisely be done in law. The learned Single Judge dismissed the writ petitions of all the industrial units by holding to the industrial units undertaking expansion, modernisation and diversification to the extent of 25%, were not entitled to the grant of full sales tax exemption The industrial units filed writ appeals before a Division. Bench of this Court which came up for hearing before the Smti Meera Sharma, J. and Shri D. Biswas, J. The leading judgment was written by Smti Meera Sharma, J. holding that the appellants were entitled to full sales tax exemption under the policy of 1991 and that the same could not be taken away by the policy of 1995. It has also been found by Smti Meera Sharma, J. that once the State had promised Ml Sales Tax exemption, it could not divest the industrial units of that full sales tax exemption by inserting different words in the policy of 1995. Shri D. Biswas, J. while not disagreeing with Smti Meera Sharma, J. that if a benefit has been conferred, the same could not be taken away by the State, has disagreed to the extent that both the policies of 1991 and 1995 were similar in nature and that the appellants were not entitled to full sales tax exemption. Since there was difference of opinion between the two Judges, the matters stood referred for opinion of the third Judge. Hon'ble the Chief Justice Shri Brijesh Kumar (as he then was) ordered placement of the matters before me for opinion. This is how the cases have come- up for hearing before me for my opinion as to which view is correct.

(2.) It is agreed between the counsel for the parties that since a common question has arisen in all these cases, all the cases can be and should be disposed of together. In view thereof, I, by virtue of this judgment, would be disposing of all these matters (Writ Appeals Nos. 139/98, 140/98, 141/98, 153/98, 154/98, 155/98, 156/98, 163/98 and 164/98) together. In order to appreciate the precise controversy between the parties, it would be necessary to have a look at the very wordings of the Industrial Policy of 1991 (hereinafter called Policy of 1991) and the Notification of the Assam Government issued in the year 1995 (hereinafter called the Notification of 1995). The relevant provisions of the Policy of 1991, are reproduced below: "2. Eligible Unit: Only new units set up on or after 1.4.1991 and existing units undertaking expansion, modernisation or diversification at the same location or at any other place in the State of Assam will be eligible for incentives under 1991 Scheme provided that

(3.) A unit shall have employment of 80% people of Assam in the managerial cadre and 90% people of Assam in the non-managerial cadre and that over a period of 5 years from the commencement of production such units would take all effective steps to ensure 100% employment of people of Assam in non- managerial and atleast 90% in managerial posts. They would further give an undertaking that if these conditions are violated, the State Government Subsidies/Incentives so availed by them would be fully refunded. New Unit : An industrial unit which has taken all the initial effective steps on or after 1.4.91 would be considered as a new unit. Existing Unit: A unit which is or was in commercial production at any time prior to 1.4.91 will be considered as an existing unit for the purpose of the 1991 Scheme. Expansion/Modernisation/Diversification: Expansion/modernisation/diversification of an existing industrial unit will be eligible for all incentives if the total capital investment on plant and machinery in the expansion/ modernisation or diversification as the case may be, is more than 25 percent of the total fixed capital investment of the existing unit. For the purpose of calculation, gross value of all the capital investments made on land, building, plant & machinery of an existing unit will be taken into consideration. Expansion/ modernisation/diversification will imply an increase of at least 25% in the existing installed capacity as well as increase of additional employment at least by 10%. The fact that existing unit have availed itself of incentives will not disqualify the expansion/ modernisation/diversification project to get incentives for the extra investment made. Sales tax Exemption : Sales tax will be exempted on purchase of raw materials and sales of finished products for a period of seven years."