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IN THE HIGH COURT OF ORISSA AT CUTTACK

W.P.(C) No.3834 of 2003

M/s. Sree Metallicks Ltd., Keonjhar

….

Petitioner

Mr. Sidhartha Ray, Advocate

-versus-

State of Odisha and others

….

Opposite Parties

Mr. Sunil Mishra, Additional Standing Counsel for the Revenue

Department

CORAM:

THE CHIEF JUSTICE

JUSTICE R. K. PATTANAIK

Order No.

ORDER

28.02.2022

26.

1. The prayer of the Petitioner, which is a company,

headquartered at Barbil in Keonjhar District, carrying on the

business of manufacturing, processing and selling of Sponge

Iron, Ore Fines and Dole Char, is for a direction to the Opposite

Parties-State to include the Petitioner-Industry in the list of

Pipeline Industries for the purposes of grant of sales tax

incentives. The Finance Department Notification dated 26^th July,

1996, restricting the benefit of concession to Industrial Units

operating prior to 1^st March, 1996 has been challenged.

2. On 4^th July, 2003, the following order was passed by this

Court in Misc. Case No.3526 of 2003while issuing notice in the

main petition:

“In view of the recommendation of the State Level

Empowered Committee in their meeting held on

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19.4.2000 for grant of sales tax benefit on the

incremental sales to the new units and suggesting

amendment in para 5-7 of Part-II of the IPR-1996 by

including the word ‘new’ along with exiting industries,

no coercive action be taken against the petitioner by

the Sales-Tax Department with regard to incremental

sales from October, 2001 onwards.”

3. Later, by an order dated 22^nd March, 2005, the above interim

order was modified. It was now stated by the Court as under:

“xxx. We make it further clear that our order dated

4.7.2003 shall not stand on the way of the Revenue in

taking action for realization of the demand, if any,

raised for the aforesaid year. So far as the returns for

the subsequent years are concerned, the interim order

dated 4.7.2003 shall not stand on the way of the

Assessing Officer to deal with the same in accordance

with law.

With the aforesaid modification the misc. case stands

disposed of.”

4. This Court has heard the submissions of Mr. Sidhartha Ray,

learned counsel for the Petitioner and Mr. Sunil Mishra, learned

Additional Standing Counsel for the Revenue Department.

5. The case of the Petitioner is that it was registered as a Small-

Scale Industry (SSI) Unit and in that capacity availed of the sales

tax benefit under the provisions of the Industrial Policy

Resolution, 1996 (IPR-1996), made a capital investment on 3^rd

May, 1996 and commenced its commercial production on 10^th

December, 1998. Subsequently, the Director of Industries (DIC)

(Opposite Party No.4) granted the Petitioner a Production

Certificate as a Medium Scale Industry (MSI). Contending that

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an MSI continues to be governed under IPR-1996, on the basis

of

having

undertaken

Expansion,

Modernization

and

Diversification (EMD), the Petitioner sought sales tax incentive.

6. By a letter dated 22^nd October, 2001, the Industries

Department informed the DIC that “no sales tax benefit can be

extended any more amending paragraph 5.7.(Part-II) of IP-96

which may lead to violation of national policy. Therefore, Govt.

after careful consideration have been pleased not to make any

amendment to the provisions of IPR-96 in this regard and decide

that the pending proposals may please be disposed off

accordingly.”

7. Both counsel referred to the definition of ‘effective date’ in

clause 2.1 and ‘existing industrial unit’ in clause 2.2 of the IPR-

1996. The said two expressions read as under:

“2. Definition:

2.1 “Effective date” means the date of issue of this

policy on and from which, the provisions thereof shall

be operative.

2.2 “Existing industrial unit” means an Industrial unit

where fixed capital investment has commenced before

the eff