SHAKTI TUBES LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) THIS writ petition has been preferred with the prayer to set aside the order dated 7.3.2000 (Annexure 5), passed by the Commercial Tax Tribunal, Bihar, Patna, in Revision Case No. PT -193/99 (Shakti Tubes Ltd. v. State of Bihar), whereby the order passed by the authorities under the provisions of the Bihar Finance Act (hereinafter referred to as 'the Act'), has been upheld, and it has been held that the petitioner is not entitled to the benefit of exemption from payment of purchase tax on raw materials used for manufacture of the products to the extent of sales effected by the petitioner outside the State of Bihar by stock transfer, in terms of the Industrial Incentive Policy 1993. It relates to the assessment year 1994 -95.

(2.) A brief statement of facts essential for the disposal of the writ petition may be indicated. The petitioner is a Private Limited Company, incorporated under the provisions of the Companies Act 1956, and has set up a steel plant at Hajipur, district Vaishali. The State Government had issued its industrial policy for rapid growth of industries in the State of Bihar, whereby incentives were given to entrepreneurs to set up industrial units in the State of Bihar, vide its resolution No. 13730, dated 1.9.1986, which was extended upto 1993, by various orders of the State Government. The State Government noticed that the desired industrial growth had not been achieved in all the districts of the State. It was also felt that in the context of new Industrial Policy 1991 of the Central Government, and with the withdrawal of freight equalization policy, the incentives granted by the said industrial policy of the Bihar Government required new dimensions to achieve balanced industrial growth in a planned manner so that natural and human resources of the State are fully utilised and developed and the opportunities for employment are progressively increased. With these objectives clearly stated in the preamble, the new Industrial Incentive Policy 1993 (hereinafter referred to as 'the Industrial Policy'; Annexure 1) came to be issued, replacing the previous industrial policy. New incentives were granted to the entrepreneurs to promote industrial growth in the State. The same was approved by the Bihar Cabinet on 10.6.1993, and was enforced with effect from 1.4.1993 (Annexure 1). It is relevant to state that the petitioner company had already commenced production before 1.4.1993, and its capital investment was less than Rs. 15 crores.

(3.) THE petitioner submitted its returns and, inter alia, in view of Clause 10.4 of the 1993 Policy, claimed the benefit of exemption from payment of purchase tax on raw materials used for manufacture of its products. The learned Assessing Officer, namely, the Deputy Commissioner of Commercial Taxes, Patna West Circle, passed the order of assessment on 15.7.1997 (Annexure 3), whereby he, inter alia, held that the petitioner is not entitled to the benefit of exemption from payment of purchase tax on the purchase of raw materials to the extent the finished products were sold outside the State of Bihar by stock transfer vk