The bifurcation of Bihar into Jharkhand does not invalidate the continued applicability of benefits from the Bihar Industrial Policy of 1995 under Section 84 of the Bihar Reorganization Act, 2000.

1 Leave granted in S.L.P. (c) No. 13401 of 2003.

2 In this batch of appeals by special leave, common questions of law arise for determination which for their answer depend on the interpretation of S.2(f), 84 and 85 of the Bihar Reorganization Act 2000 (Act 30 of 2000) enacted by the Parliament (hereinafter referred to as the "said Act") which on and from the appointed day created the new State of Jharkhand comprising the districts specified in S.3 thereof which formed part of the erstwhile State of Bihar. It is undisputed that the Central Government by Notification published in the Official Gazette appointed the 15th of November 2000 as the appointed day.

3 The core question which arises in these appeals is - whether on bifurcation of the existing State of Bihar, and creation of the State of Jharkhand comprising territories which before the appointed day comprised the territories of the State of Bihar, the benefits flowing from the Industrial Policy 1995 of the then State of Bihar crystallized in the Notification of the Government of Bihar issued under S.7(3)(b) of the Bihar Finance Act 1981 published in the Official Gazette on 22.12.1995, enures to the benefit of the beneficiaries under the Policy and under the Notification after the appointed day. In the cases in hand, we are primarily concerned with the benefit of exemption from payment of sales tax on purchase of raw materials extended to new units, and similar benefits to units, undertaking expansion/diversification for their expanded/ diversified capacity and incremental production.

4 Civil Appeal No. 7798/2002 arises out of the judgment of a Division bench of the High Court in a writ petition filed by the respondents, namely, M/s Swarn Rekha Cokes and Coals Pvt. Ltd. and others. The respondent claimed that it was entitled to the incentive promised in the Industrial Policy 1995 and the Notification issued pursuant thereto granting exemption from payment of sales tax on purchase of raw materials. It had fulfilled all the necessary requirements regarding registration and certification whereafter under S.O. 478 dated 22nd December 1995 and pursuant to the exemption certificate, it was entitled to purchase coal from the Bharat Coking Coal Ltd. ('BCCL' for short) up to 22nd December 2006 with the benefit of exemption from payment of sales tax. However, since their claim of exemption from payment of sales tax was being disputed, it was compelled to file a writ petition before the High Court of Judicature at Patna. The aforesaid writ petition was allowed by a learned Single Judge of the High Court. The Commissioner, Commercial Taxes, Ranchi, however impugned the judgment of the learned Single Judge by filing Letters Patent Appeal No. 204 of 2002. According to him after bifurcation of the erstwhile State of Bihar, the benefit of exemption from payment of sales tax on the purchase of raw materials (coal in this case) was not permissible since BCCL which supplied coal was located at Dhanbad within the Jharkhand State. The exemption granted to the respondent was limited in its application to the State of Bihar and, therefore, could not be enforced in the State of Jharkhand. According to the appellant unless and until, the State of Jharkhand granted a similar exemption, the respondent was bound to pay tax and remit the same to the State of Jharkhand. The Letters Patent Appeal was dismissed by the High Court by its judgment and order of April 2, 2002 upholding the contention of the respondent and finding them entitled to the said benefit.

5 In the appeal arising out of S.L.P.(C) No. 13401 of 2003, the facts are similar and a learned Single Judge of the Patna High Court following the aforementioned judgment of the High Court in Swarn Rekha Cokes and Coals Pvt. Ltd., allowed the batch of writ petitions by his judgment and order of July 18, 2002. The said judgment of the learned Single Judge was challenged in a Letters Patent Appeal preferred by the State of Jharkhand being L.P.A. No.