SHARDA CEMENT COMPANY Vs. STATE OF BIHAR

JUDGEMENT

(1.) The dispute in this writ petition relates to exemption from payment of sales tax on purchase of raw materials and sale of finished goods in terms of the 1995 Industrial Policy of the Government of Bihar. The relevant provisions relating to sales tax incentives are contained in Clause 16 of the Policy. Clause 16.1 lays down that new industrial units will be allowed the facility of either "Set-off" or "exemption" at their choice on purchase of raw materials for a period of ten years for category 'A' and eight years for category 'B' districts from the date of commencement of production of the unit. Likewise, Clause 16.2 lays down that new units, in addition to the benefits of the exemption/set-off of sales tax on purchase will also have the option to choose deferment or exemption of sales tax (both Bihar Sales Tax and Central Sales Tax) on sale of finished goods for a period of ten years and eight years depending on the category of the district, from the date of commencement of the production. It may be mentioned here that the 1995 Policy is to remain in force for five years from 1.9.95. It is not necessary to notice other parts of the Policy for the purpose of this case.

(2.) In order to give effect to the aforesaid exemption scheme, as required under Section 7(3) of the Bihar Finance Act, 1981 , on 22.9.95 the Government of Bihar issued notifications vide SO 478 and SO 479. While the former deals with the exemption from sales tax on purchase of raw materials, the latter relates to exemption on sale of finished goods.

(3.) The Petitioner claims to have set up a Portland Slag Cement Manufacturing unit at village Rauta in Hazaribagh district in terms of the provisions of 1995 Industrial Policy. On 31.1.97 it applied for grant of registration under Section 14 of the Bihar Finance Act and Central Sales Tax Act, 1956 before the competent authority of the Commercial Taxes Department. On 3.2.97, the registration certificates were granted under both the Acts vide Certificate Nos. HZ 4254 and HZ 3700(C) effective from 16.1.97 and 5.2.97 respectively. The Petitioner was also granted certificate under Section 13 of the Bihar Finance Act allowing purchase of materials mentioned in the certificate at concessional rates of tax. The said certificate bears No. HZ 200/13(1)(b) and (c)/98-99. The Petitioner was also registered as an S.S.I, unit by the Industries Department on 15.3.97 vide registration No. 03060597 showing the date of production as 16.1.97.