Heard the learned Counsel for the petitioner and the learned Government Advocate.

2. The facts briefly stated are as follows:

The petitioner is a company registered under the Companies Act, 1956 and a dealer registered under the Karnataka Sales Tax Act, 1957 (hereinafter referred to as ‘the KST Act; for brevity) under the Central Sales Tax Act, 1956 (hereinafter referred to as ‘the CST Act’ for brevity) and the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as ‘the KVAT Act’ for brevity).

The Government of Karnataka had extended a package of incentives and concessions to the petitioner vide Order dated 17.8.1994 and incentives in the form of deferment of the payment of tax under the KST Act and the CST Act was extended to the petitioner from the years 1994 to 2006. The petitioner was entitled to avail of sales tax deferment for its project of expansion, modernization and diversification of the petitioner’s plant – which were programmed under what was termed as Phase-I and Phase-II, spread over the period 1994-2006. The base tax liability fixed was in a sum of Rs.4.44 crore per annum.

The petitioner however, envisaged a further expansion and modernization