(W.Ps. filed under Article 226 of the Constitution of India for the issue of a Writ of Certiorari as stated therein.)

Common Order:

P.D. Dinakaran, J.

I. THE CONTROVERSIES

1.1. In the case of expansion unit of an existing industry, whether the industry will be eligible for sales tax deferral in any financial year if the production exceeds the Base Production Volume (in short, 'BPV') for the sales made in that year in excess of the Base Sales Volume (in short, 'BSV'), is the issue that arises for our consideration in W.P.Nos.13697 and 13698 of 2002.

1.2. In the case of diversified unit of an existing industry, whether the industry will be eligible for sales tax waiver in any financial year if the production exceeds the Base Production Volume (in short, 'BPV') for the sales made in that year in excess of the Base Sales Volume (in short, 'BSV'), despite the fact that the production of the existing unit and diversified unit are totally different and the existing unit was subsequently sold to a third party, is the issue that arises for our consideration in W.P.Nos.37042, 40030, 40031 & 44733 of 2002 and 3230, 3231, 3232, 3233, 3234 & 21162 of 2003.

II. GOVERNMENT ORDERS THAT ARE RELEVANT TO DECIDE THE CONTROVERSIES

2. Before touching the facts and circumstances pertaining to these two batches of writ petitions, it is apt to refer the Government Orders which are relevant to decide the controversies referred to above, based on which, both the petitioners, viz., India Cements and Hindustan Motors claim the benefit under the deferral of sales tax in the case of India Cements and waiver of sales tax in the case of Hindustan Motors.

2.1. The Government of Tamil Nadu, with a view to promote industrialization, introduced an Interest free Sales Tax Deferral Scheme in G.O.Ms.No.500, Industries (MIG-II) Department, dated 14.5.1990, as per which the State Industries Promotion Corporation of Tamil Nadu Ltd., the second respondent herein (in short 'SIPCOT') is the authorised agency to receive applications, sanction and disburse for medium and major industries and also to assess the eligibility of a new industry and issue eligibility certificate under the scheme. The said G.O.Ms.No.500, Industries (MIG-II) Department, dated 14.5.1990 reads as under:

"GOVERNMENT OF TAMIL NADU

ABSTRACT

Industries – Declaration of Most backward taluks – Incentive schemes for industries – Interest free sales tax scheme – Further liberalisation – order – issued.

-----------------------------------------------------------------------------------------------INDUSTRIES (MIG-II) DEPARTMENT

G.O.Ms.No.500 Dated: 14.5.1990

Read:

1. G.O.Ms.No.305, Industries, dated 22.5.1989

2. G.O.Ms.No.423, Industries, dated 7.7.1989

3. G.O.Ms.No.563, Industries, dated 19.8.1989

4. G.O.Ms.No.564, Industries, dated 19.8.1989

ORDER:

The Government in the order second read above declared 105 taluks of this State as industrially backward for the purposes of grant of interest free sales tax loan, interest free sales tax deferral,state capital subsidy, etc.

2. With a view to correct regional imbalances in the industrialisation in the State by giving further incentives to more backward areas, the Government direct that 30 taluks, from among the 105 industrially backward taluk be declared as industrially most backward taluks. The names of 30 taluks are annexed to this order.

3. The Government direct that the new industries to be set up in the 30 most backward taluks ordered in para 2 above and also in the three industrial complexes of State Industries Promotion Corporation of Tamil Nadu at Pudukottai, Cuddalore and Manamadurai be eligible apart from other existing concessions for full waiver of sales tax dues for a period of five years upto a ceiling of the total investment made in fixed assets. Existing industries in the most backward taluks and in the three State Industries Promotion Corporation of Tamil Nadu (SIPCOT) complexes, undertaking expansion / diversification are also eligible for full waiver of