Claim for sales tax concession by the respondent for new units in backward taluks.

1. An order, allowing the writ petition filed by M/s.Thiru Arooran Sugars Limited, passed by the learned single Judge is the subject matter of consideration in this appeal, which has been filed by the State Industries Promotion Corporation of Tamil Nadu. For the sake of convenience, we would refer to the parties by their original status in the writ petition. The petitioner shall be referred to as “the petitioner company” whereas the appellant shall be referred to as “SIPCOT” in the judgment. The original respondents 2, 3 and 4 represent the Government Departments, viz.Commercial Taxes Department, Chennai; Industries Department, Government of Tamil Nadu, Chennai, and Office of the Assistant Commissioner (CT), Central Assessment Circle IV, Chennai.

2. By their writ petition, the petitioner company claimed an “Eligibility Certificate” under G.O.Ms.No.500, Industries (MIG-II) Department, dated 14.5.1990, which certificate entitled them for a “full waiver of sales tax” for a period of five years with a ceiling of total investment made in the fixed assets. This certificate was denied to them by SIPCOTvide its order dated 8.11.1996 and that order was predominantly challenged in the writ petition. A direction was sought against SIPCOT to issue the eligibility certificate to the new unit of the petitioner company established at Thirumandankudi village, Papanasam Taluk, Thanjavur District. For the purposes of eligibility, the petitioner company had made an application dated 19.11.1991. It was held by SIPCOT in the aforementioned order dated 8.11.1996 that G.O.Ms.500 was not applicable to the said new unit of the petitioner company and the petitioner company was not entitled, for some other reasons also, to be granted the certificate of eligibility. The learned single Judge while allowing the writ petition of the petitioner company has held that the petitioner company can be aptly covered under G.O.Ms.500 and more particularly under clause (3) thereof and that SIPCOT was not justified in refusing to grant the Certificate of Eligibility.

The sole question that falls for consideration in this appeal is, therefore, whether SIPCOT was justified in refusing the Eligibility Certificate to the petitioner company. The question, which now boils thus, is what is the true interpretation of G.O.Ms.No.500, dated 14.5.1990 and further, whether the petitioner company could claim the benefits thereunder for its new unit.

3. Fewfacts must first be stated to understand the controversy:

3.1. Thepetitioner company is a public limited company, registered under the Indian Companies Act, 1913 and is a manufacturer of sugar, industrial alcohol and is also engaged in generation of power. It had its old unit at Vadapathimangalam, Needamangalam Taluk whereas, its case is that it had set up a new unit at Thirumandankudi village, Papanasam Taluk,ThanjavurDistrict.

3.2. The Tamil Nadu Government, with an object of giving impetus to the industrial development in the State of Tamil Nadu, provided certain measures. For this purpose, a policy was charted out under which, industrially backward areas in the State were spotted and it was decided to extend various concessions like Interest Free Sales Tax Loan (IFST Loan), Interest Free Sales Tax Deferral (IFST Deferral), State Capital Subsidy, Power Tariff Concessions, etc.

3.3. In G.O.Ms.No.423, Industries, dated 7.7.1989, 105 taluks of the State came to be declared as “industrially backward” and it was decided that the concessions of IFST Loan, IFST Deferral, State Capital Subsidy, etc. should be given to the industries in these taluks. This policy was more or the less followed and was executed through G.O.Ms.No.563 and 564, Industries, dated 19.8.1989. However, by G.O.Ms.No.500, which was issued on 14.5.1990, a major change was introduced and that was felt necessary as the Government wanted to correct the “industrial regional imbalances” in the State. For this purpose, out of the earlier 105 industrially back