The court emphasized the impermissibility of the 'mistaken notion' raised by the authorities and the violation of Article 14 of the Constitution in depriving the petitioner of the benefit of tax exemption.

JUDGMENT :

I. Mahanty, J. - In these writ applications the petitioner, M/s. Lingaraj Pipes Private Limited has sought to challenge various orders of assessment and consequential demands, inter alia, on the ground that the assessing officer has failed to consider the exemption that the petitioner is entitled to under the I.P.R., 1996. According to the petitioner it had set up its unit acting upon the Industrial Policy Resolution, 1996 (hereinafter referred to as "IPR, 1996") having fulfilled the terms and conditions regarding investments in capital within the stipulated period and commenced its commercial production with effect from January 8, 2000. The petitioner-company further submits that it has been duly certified by the Director of Industries on March 29, 2001 to be a "priority industry" within the meaning of paragraph 2.7 of the IPR 1996 and the Director of Industries has issued necessary certificate in form E(96) declaring the petitioner-company to be eligible for all the sales tax incentives available under the IPR 1996 under the category of "priority industry". The learned Counsel for the petitioner-company further contends that while the said certificate holds good and has not been withdrawn, the sales tax authorities of Orissa have not accepted the certificate granted by the Director of Industries and consequently raised tax demand against the petitioner-company. The petitioner-company further submits that raising of such demand is illegal and therefore the following orders of assessment under the Central Sales Tax Act, 1956 and Orissa Sales Tax Act, 1947, being in gross violation of the certificate of eligibility to sales tax exemption granted by the Director of Industries, should be quashed/set aside.

1. CST assessment for the year 1999-2000 WP(C) No. 8952 of 2003

2. do. 2000-2001 WP(C) No. 1919 of 2004

3. do. 2001-2002 WP(C) No. 8604 of 2005

4. OST assessment for the year 2000-2001 WP(C) No. 1920 of 2004

5. do. 2001-2002 WP(C) No. 8600 of 2005

2. Although notices were served on all opposite parties, i.e., Sales Tax Officer, Bhubaneswar II Circle (O.P. 1), General Manager, District Industries Centre, Bhubaneswar (O.P. 2), Director of Industries, Orissa, Buxibazar, Cuttack (O.P. 3) and the State of Orissa, represented by Secretary, Industries Department, Government of Orissa (O. P. 4), the only counter-affidavit in these cases has been filed on behalf of opposite parties 2, 3 and 4. Mr. Ashok Mohanty, learned Senior Standing Counsel, has appeared for all the opposite parties and submitted that the counter-affidavit filed in W.P. (C) No. 8600 of 2005 may be accepted as a common counter-affidavit in all the connected cases referred to above. The opposite party No. 1-Sales Tax Officer has not filed any counter-affidavit in this case.

3. On the issue of the eligibility certificate to the petitioner in form E(96) by the Director of Industries, one Sri Biranchi Narayan Das, Under Secretary to Government of Orissa, Industries Department, has filed the counter-affidavit on behalf of the opposite parties 2, 3 and 4 and stated in paragraph 13 as follows:

That, it is humbly submitted that the letter of February 23, 2004 addressed to the Director of Industries, Orissa and the letter dated May 20, 2004 addressed to the Commissioner of Commercial Taxes, Orissa were issued on a mistaken notion that the manufacturing of P.V.C. pipes from P.V.C. resins is a petrochemical industry. On subsequent scrutiny and analysis of the letter No. 450132/24/2000-PV/IV-dated February 16, 2000, it was found that the Government of India has defined such industry only as a downstream process of petrochemical industry and not as a petrochemical industry and as such the petitioner industry does not fall under 'petrochemical industry' and as such cannot be termed as a 'priority industry'.

4. Sri A.K. Ganguly, learned Senior Advocate appearing on behalf of the petitioner, presented his arguments by relying upon the IPR, 1996 and while placing relia