W.P.No.19140 of 2011 (O).WP No.19140/2011(O) WP No.5308/2004(O) WP No.2654/2006(O) WP No.1893/2007(O) WP No.2261/2007(O) WP No.2135/2008(O) 16.7.2012.
Shri Mukesh Agrawal for the petitioner in W.P.No.19140/2011(O).Shri H.S.Shrivastava, Counsel assisted by Shri Sandesh Jain for the respondent No.5 in W.P.No.19140/2011(O) and for petitioners in W.P.No.5308/04(O).W.P.No.2654/2006(O).W.P.No.1893/2007(O) and W.P.No.2261/2007(O).As the controveRs.involved in all these cases are identical, all these petitions are being decided by this common order.
For the convenience, facts are taken from W.P.No.19140/2011(O).The petitioner has sought the following relief : “7.1 to quash the assessment order dated 30.01.2006 (P/3).7.2 to quash the appellate order dated 12.04.2007 (P/5).7.3 to quash the revision order dated 23.06.2011 (P/7).7.4 to hold that notification dated 19/02/1991 (P/1) is still applicable; 7.5 to hold that no tax is payable by the petitioner in respect of purchases made between 2002-03 from L & T LTD.7.6 to issue such other writ or direction or order which this Hon'ble Court deems proper in the circumstances of the case to give relief to the petitioner.”
The facts of the case, in brief, are that the petitioner is a trader of Cement, Cement ColORS.etc.and was working in the erst- while State of Madhya Pradesh which was prior to 1.11.2000 before reorganization of the State.
The petitioner was also registered dealer as per the provisions of the MP Commercial Tax Act, 1994.
The petitioner made certain purchases from M/s L & T Limited, Raipur, not known as M/s Lafarge India PVT.Ltd., which W.P.No.19140 of 2011 (O).was a new industrial undertaking exempted from the tax by Notification not A-3-27/89-ST-V(15) dated 19.2.1991.
The aforesaid exemption was granted before reorganization of the erstwhile State of Madhya Pradesh.
After coming into force of M.P.State Reorganization act w.e.f.1.11.2000, a new State of Chhattisgarh was formed.
The respondent No.5 which is situated in the new State of Chhattisgarh had continued with the supply.
The period in question in this petition is between 1.4.2002 and 31.3.2003.
the question involved in the present petition is whether the purchases made by the petitioner after 1.11.2000 from an industry which was exempted after creation of the State of Chhattisgarh, petitioner was entitled for the same exemption or not which was available to the petitioner prior to 1.11.2000.
The authorities have turned down the contention of the petitioner.
The petitioner had challenged the order passed by the various authorities before this Court and made prayer for quashment of the aforesaid order.
It was submitted by Shri Mukesh Agrawal, learned counsel appearing for the petitioner in W.P.No.19140/2011(O) that the controveRs.has been settled by the apex Court in Commissioner of Commercial Tax and anr.
versus Swaran Rekha Cokes and Coals Pvt.LTD.& ors reported in (2004) 6 SCC 68.= [2004].37 VKN 57.and it was submitted that in view of the verdict of the apex Court, these petitions may be allowed.
The position on facts is not disputed by Shri H.S.Shrivastava, Counsel assisted by Shri Sandesh Jain, appearing for the respondent No.5 in W.P.No.19140/2011(O) and for the petitioners in W.P.No.5308/04(O).W.P.No.2654/2006(O).W.P.No.1893/2007(O) and W.P.No.2261/2007(O).The apex Court in Commissioner of Commercial Tax and anr.
versus Swaran Rekha Cokes and Coals Pvt.LTD.& ORS.considering the controveRs.held thus : W.P.No.19140 of 2011 (O).“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 of the then State of Bihar crystallised in the notification of the Govt.
of Bihar issued under section 7(3)(b) of the Bihar Finance Act, enures to the benefit of the beneficiaries under the policy and under the notification after the appointed day.
The question is primarily concerned with the benefit of exemption from payment of sales tax on purchase of raw materials extended to new units undertaking expansion/diversification for their expanded/diversified capacity and incremental production.
The industrial unit, namely; M/s.Swaran Rekha Cokes and Coals claimed that it was entitled to the incentive promised in the industrial Policy and the notification issued pursuant thereto granting exemption from payment of sales tax on purchase of raw materials.
Pursuant to the exemption certificate granted to it, it was entitled to purchase coal from BCCL with the benefit of exemption from payment of sales tax.
Its claim being disputed it was compelled to file a writ petition before the High Court.
The aforesaid writ petition was allowed.
The LPA filed by the CCT was dismissed by the High Court upholding the contention of the assessee and finding them entitled to the said benefit.
On civil appeals before the Supreme Court : Held,that the benefit of exemption from payment of sales tax on purchase of raw materials extended to new industrial units and similar benefits to units undertaking expansion/diversification for their expanded/diversified capacity and incremental production under the Industrial Policy of the then State of Bihar [crystalised in Notification SO NO.478 dated Dec.22, 1995, under section 7(3)(b) or the Bihar Finance Act, 1981].does not come to an end on the appointed day [Nov.2000].on which on re- organisation, the existing States of Bihar was bifurcated into two States, Bihar and Jharkhnad,but, enures to the beneficiaries under the Industrial Policy and notification even thereafter.
Section 84 of the Re-organisation Act creates a fiction that despite the division of the erstwhile State of Bihar into two States, any law inforce immediately before the appointed day not withstanding territorial references in them shall until otherwise provided by the competent legislature or other competent authority, be construed as meaning the territories within the existing State of Bihar before the appointed day.
Though the law may refer to the State of Bihar before and though the State of Bihar had been bifurcated into two by creating the State of Jharkhand the law inforce before the appointed day must continue to operate in the territories which formed the erstwhile State of Bihar.
The statutory Notification not SO W.P.No.19140 of 2011 (O).478 dated Dec.22, 1995, therefore, continues earlier constituted the State of Bihar.
Under section 85 they continue to operate until repealed or amended.
Notification No.478 had not been modified amended or altered by the State of Jharkhand and it must continue to operate in the State till such time as it is modified repealed or altered.
As envisaged in section 91, the notification must prevail and the benefits flowing therefrom must accrue to the beneficiaries one must not permit one;s mind to boggle by imagining that what was one State earlier has not become two and consequently what were intra-State sale transactions earlier are not inter-State sale-transactions.
The benefit under the notification must flow notwithstanding the fact that in reality intra-State sale transactions of the erstwhile State f Bihar may have become inter-State transactions, after re- organisation.
Therefore, it is held that the benefit of exemption from payment of sales tax on purchase of raw materials in respect of new units or the benefit envisaged for units which have undertaken diversification or expansion are available to those units if eligible under SO No.478 notwithstanding the fact that the erstwhile State of Bihar has been divided into two States by creation of the new State of Jharkhand.”
As the controveRs.involved in this case is identical, the apex Court has found that the benefit which was available to an exempted unit prior to reorganization to continue to the unit even after reorganization and have granted exemption for the period for which the exemption was granted.
In view of the aforesaid,all these petitions are allowed and it is held that the exemption which was granted to respondent No.5 in W.P.No.19140/2011 shall remain applicable to the petitioner even after reorganization of the State w.e.f.1.11.2000.
The authorities shall redecide the matter in accordance with the law laid down by the apex Court in Commissioner of Commercial Tax and anr.
versus Swaran Rekha Cokes and Coals Pvt.LTD.& ORS.afresh within a period of 30 days from the date of communication of the oder.
No order as to costs.
(Krishn Kumar Lahoti) (Smt.Vimla Jain) Judge Judge Khan*