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2007 Supreme(Ori) 55
2007 (Supp.-I) OLR — 473
A. K. GANGULY AND I. MAHANTY, JJ.
M/s. Indian Charge Chrome Pvt. Ltd....Petitioner
Versus
Sales Tax Officer, Cuttack-II Circle & others...Opp.Parties
Original Jurisdiction Case No.1865 of 1996
(Date of Judgment : 18.1.2007)
For Petitioner:M/s. S. Ganesh, Sr. Advocate, A. Dutt & J. Sahoo
For Opp.Parties:Sri A. Mohanty, Sr. Standing Coun¬sel (C.T.) and
Sri T. K. Satpathy, Assistant Standing Counsel (C.T.)
Headnote:1. CONSTITUTION OF INDIA, 1950 - Art. 286(1) - IPR, 1989 - Whether the "deciding criterion" for determination of the quantum/extent of exemption in terms of 1989 IPR is to be limited only to the transaction of sale of goods by an assessee under the O.S.T.Act and/or whether the quantum of exported goods ought not to be taken into consideration while stipulating the quantum/extent of exemption ? Art. 286(1) of the Constitution restricts a State from imposing or authorizing the imposition of, a tax on the sale or purchase of goods which takes place outside the State or in the course of import or export - If a transaction of sale or purchase is an intra-State transaction, the same would be governed by O.S.T.Act and if transaction of sale or purchase is an inter-State transaction and/or sale, purchase in course of import/export, such transaction would be governed by Union Legislation CST Act - Once a transaction of sale or purchase is governed either under the State statute, or under Central Sales Tax Act, claim of exemption thereunder and the grant of that claim would depend upon an assessee satisfying the statutory authorities the basis of its claim for exemption and not otherwise - In terms of IPR, 1989 the petitioner company would be entitled to claim sales tax incentive under the IPR, 1989, which includes thereunder, the right for deferment/exemption of sales tax on finished product for a stipulated period - There exists no stipulation as to whether the sale on which exemption is sought has to be within the State of Orissa or in course inter State or in the course of import or export there exist no stipulation that 'exemption' would only be allowed to a manufacturer who produces and sells the goods in any particular manner.(Paras - 14 to 17)
2. CONSTITUTION OF INDIA, 1950 - Arts. 226 and 227 - IPR, 1989 - Whether or not the eligibility certificate granted to the petitioner by the Director of Industries should be suitably rectified/corrected in terms of the submissions advanced by the petitioner company and the opposite parties ? All that is required for claiming exemption is that the goods must be manufactured by the industry claiming exemption within the limits of its "installed capacity" as may be determined by the Director of Industries - No other requirement under the aforesaid notification that the goods manufactured by such industrial undertaking claiming exemption must be sold in the domestic market and not exported - In taxing statute there is no room for any intendment and regard must be had to the clear meaning of the words and therefore, the exemption has to be determined on the basis of language of the notification itself and if a tax payer is within the plain term of the exemption, it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority - Direction issued.
(Para - 19)
JUDGMENT
I. MAHANTY, J. : The petitioner M/s. Indian Charge Chrome Limited, a public limited company incorporated under the Indian Companies Act (hereinafter referred to as “ICCL”) is carrying on its business in the State of Orissa, by establishing a Charge Chrome factory at Choudwar in the district of Cuttack where it manufactures chrome and exports its products and is declared as a 100% Export Oriented Unit (in short “EOU”).
A letter of intent was issued on 22.10.1982 to ICCL for setting up a 100% Export Oriented Undertaking at Choudwar, Dis¬trict Cuttack for manufacture and export of 50,000 MTPY of High Carbon Ferro Chrome/Charge Chrome. The said letter of intent was converted to Industrial Licence on 3.7.1989.
The present writ petition has been filed by the petitioner-ICCL seeking a direction to the Director of Industries (opposite party No.5) to rectify/correct the eligibility certificate for exemption of Sales Tax indicating the actual “installed capacity” of the petitioner company’s factory in terms of the Industrial Policy Resolution, 1989 (hereinafter referred to as “IPR 1989”) and as a consequence thereto, to quash the notice issued under Section 12(8) of the Orissa Sales Tax Act vide Annexure-2.
2. Mr. Ganesh, learned Sr.Advocate appearing on behalf of the petitioner-company, advanced the following contentions :-
i. The benefit of Sales Tax exemption under S.R.O. No.790/1990 is available to 100% Export Oriented Units (E.O.U.) and also to Units which do not make any export at all. In other words, the availability of exemption under S.R.O. No.790/1990 is not at all dependent on whether the assessee has made exports or not.
ii. The conditions laid down in the E.O.U. resolution issued by the Central Government cannot be imported into or made a part of the Sales Tax Notification (S.R.O. No.790/1990) issued by the State Government of Orissa.
iii. The benefit of sales tax exemption under S.R.O. No.790/1990 is available to an assessee in respect of sales of any product covered by the assessee’s industrial licence.
iv. The petitioner’s Industrial Licence authorized it to manu¬facture charge chrome/ferro chrome. The petitioner is therefore entitled to sales tax exemption under S.R.O. No.790/1990 in re¬spect of its entire production of Charge chrome/Ferro chrome, without it being subjected to any restriction or limitation what¬soever.
v. The Director of Industries, as the authority issuing the Eligibility Certificate under S.R.O. No.790/1990, is only con¬cerned with one limited issue, namely whether the sales in question are of the products covered by the assessee’s industrial licence. If the answer to this query is in the affirmative, the Director of Industries is bound to issue an unqualified Eligibil¬ity Certificate for availing of exemption without incorporating any quantitative or value restriction on the quantum of exemp¬tion, which may be availed of by the assessee.
vi. The only authority which is concerned with compliance with and breach of the E.O.U. resolution is the Development Commis¬sioner. The Orissa Sales Tax authorities are not in any manner concerned with this issue at all.
vii. It is important to note that, in the present case, no alle¬gation has been made against the Petitioner right upto day of filing the writ application that the E.O.U. resolution has been violated in any way or that any breach thereof has been committed by the petitioner.
viii. Without prejudice to the above, it is submitted that even assuming without conceding that the petitioner is found to have committed some violation of the terms of the E.O.U. resolu¬tion, even then the benefit of sales tax exemption under the S.R.O. No.790/1990 cannot in law be denied to the Petitioner, for the simple reason that this is not at all a relevant criterion or consideration for determining the eligibility and entitlement of an assessee to sales tax exemption under S.R.O. No.790/1990.
3. Apart from the aforesaid contentions Mr. Ganesh, learned Senior Advocate on
