Commissioner, Commercial Tax Vs. Saurabh Metals Pvt. Ltd. and ors. - Court Judgment

Excerpt:
- indian penal code, 1890.sections 307 & 324: [lokeshwar singh panta & b.sudershan reddy,jj] assault proof - appellant allegedly dealt sickle blow to deceased - testimony of eye-witnesses showed that sudden altercation ensued between appellant and deceased - no evidence to indicate any previous enmity between parties - single blow of sickle had been inflicted by appellant on back of deceased - incised wound allegedly inflicted by appellant - however opinion of doctor proved that deceased had not died due to direct result of said injury held, appellant is therefore liable to be convicted under section 324 of i.p.c., sentence of 3 years imprisonment reduced to period undergone by appellant considering mental agony suffered by him - 1, company failed to establish rolling mill unit in the industrial area but in papers it has shown the status of the rolling mill in order to avail of exemption under the revival scheme. 1 had filed a review before the bifr seeking exemption beyond april 1, 2006. the said review was allowed by the bifr by order dated may 17, 2007 wherein it was held that keeping in view the long-term profitability/viability of the company the sales tax department will grant exemption of tax to the company, up to january 31, 2012 as contained in the notification dated february 1, 2003 issued by the government of madhya pradesh without any monetary limit in view of para 3.5 of the scheme of 1996. it is urged that the said directions given by the bifr are in complete derogation of the sanction scheme of 1996 which was approved by the bifr as well as by the high level committee of the state government. it is submitted that the appellate authority failed to appreciate that respondent no. the words used clearly reveal that the exemption relates to the goods manufactured in the unit. vat act, 2002 clearly stipulates that the reliefs to which a company was entitled as per the earlier enactment including the facility of exemption/deferment, etc. (d) the bifr as well as the appellate forum, aaifr has committed grave error by deleting the maximum exemption cumulative of quantum of tax which was prescribed by the department. it clearly stated that sales tax benefit for further period of nine years in case of the rolling mills which is pending due to settlement of dispute of land with mpavn, bhopal.orderdipak misra, j.1. invoking the extraordinary jurisdiction of this court under articles 226 and 227 of the constitution of india, the petitioner, commissioner, commercial tax, government of madhya pradesh, has prayed for issue of a writ of certiorari for quashment of the order dated december 12, 2007 passed by the appellate authority for industrial and financial reconstruction, new delhi in appeal no. 238 of 2007 and order dated may 17, 2007 passed by the board for industrial and financial reconstruction in case no. 48 of 1994-m/s. s.m.p.l. and to grant any other appropriate relief as deemed fit in the facts and circumstances of the case.2. the facts as have been uncurtained are that respondent no. 1, m/s. saurabh metals pvt. ltd., moved an application before the board for industrial and financial reconstruction, new delhi (for short, 'the bifr') conveying that it had accumulated loss of rs. 522 lacs which had made its net worth negative by rs. 469 lacs. the bank of india was appointed as an operating agency on june 13, 1994 with the directions to examine the viability and prepare a report for the revival of the company. the company proposed in 1995 to settle the dues of the bank of india and the madhya pradesh financial corporation (for short, 'the mpfc') by selling some assets of the company in the prescribed manner. the state government agreed to grant the company status of relief undertaking.3. as set forth in the petition the respondent-company submitted its revival plan which was examined by an operating agency and subsequently a draft rehabilitation plan for the company was circulated. the claim of the respondent was approved by the bifr on august 21, 1996. in the revival scheme certain provisions for relaxation were made in respect of commercial tax and certain dues pertaining to m. p. state electricity board. a reference has been made to paragraph 3.5 of the revival scheme which deals with exemption pertaining to sales tax. emphasis has been laid on sub-clause (d) of clause 3.5. the said clause prescribes that the extension of sales tax benefit should be given to the company for a period of nine years in case of the rolling mills which is pending due to settlement of dispute of land with madhya pradesh audyogik vikas nigam, bhopal (for short, 'the nigam'). no evidence with regard to the said dispute was brought on record during the proceeding before the bifr on behalf of the industries department. it is averred that respondent no. 1-company was allotted two plots in the industrial area but the said company never utilised the aforesaid plots while establishing its industrial units. in fact, the functioning of the company pertains to plot no. 22 and plot no. 1 is still lying vacant.4. it is asserted in the petition that respondent no. 1 was incorporated as a company to manufacture steel ingots/castings but in the revival scheme the aforesaid company restricted itself only to instal rolling mills and the bifr considered it appropriate to approve the aforesaid scheme. a reference has been made to clause 3.5 of the revival scheme to highlight that there were specific stipulations as regards extension of sales tax benefit in case of rolling mills which had been undertaken by the company to establish. the revival scheme approved by the bifr, as set forth, was placed before the high power committee of the state government for further directions in terms of the policy package of 1988 ; and in a meeting held on may 24, 2002 the said committee accepted the reasons shown by the company and decided to grant exemption in respect of the rolling mills from levying commercial tax/entry tax for a period of nine years from april, 2002. the said minutes of the meeting of the higher power committee, dated may 24, 2002 have been brought on record as annexure p1. keeping in view the decision of the committee and the revival scheme approved by the bifr a notification was issued by the department of commercial tax on february 1, 2003 as per annexure p5. by the said notification the state government exempted respondent no. 1 from payment of tax in respect of goods manufactured by it in its rolling mill unit established in the new industrial area, mandideep, raisen in the prescribed manner. in the schedule appended to the notification in column no. 2 the extent of maximum exemption of cumulative quantum of tax was prescribed up to limit of rs. 4.10 crores or to the extent of tax payable under the policy changed by the government during the period, whichever is less. in column no. 3 of the said schedule the maximum period within which the quantum of exemption is available, was prescribed to be nine years commencing, february 1, 2003 up to january 31, 2012 or the period under the policy changed by the government during the period, whichever is earlier. in column 4 of the aforesaid schedule restrictions and conditions subject to which exemption was granted was prescribed that such exemption was to be in respect of sale of manufactured goods, raw materials or incidental goods consumed or used in manufacture of goods and packing material used in packing of goods manufactured in such units.5. it is asseverated that respondent no. 1, company failed to establish rolling mill unit in the industrial area but in papers it has shown the status of the rolling mill in order to avail of exemption under the revival scheme. it is contended that unless the company establishes the rolling mill unit in the industrial area it would not be entitled to get any sort of exemption in terms of the revival scheme or notification issued by the state government. certain documents have been brought on record as to how respondent no. 1 company has not established the rolling mill.6. it is further contended that vat act, 2002 came into force with effect from april 1, 2006 and the exemption was granted under the notification dated february 1, 2003 which was confined only up to april 1, 2006. respondent no. 1 had filed a review before the bifr seeking exemption beyond april 1, 2006. the said review was allowed by the bifr by order dated may 17, 2007 wherein it was held that keeping in view the long-term profitability/viability of the company the sales tax department will grant exemption of tax to the company, up to january 31, 2012 as contained in the notification dated february 1, 2003 issued by the government of madhya pradesh without any monetary limit in view of para 3.5 of the scheme of 1996. it is urged that the said directions given by the bifr are in complete derogation of the sanction scheme of 1996 which was approved by the bifr as well as by the high level committee of the state government. the revival scheme, 1996 should not have been subject to review for the purpose of granting unwarranted exemption to respondent no. 1, company.7. it is urged that the aforesaid order passed by the bifr was assailed before the appellate authority for industrial and financial reconstruction, new delhi (for short, 'the aaifr'). the appellate authority rejected the objection raised by the petitioner. the basic objection was that if the company was not manufacturing rolled-products it could not have been allowed exemption. it is submitted that the appellate authority failed to appreciate that respondent no. 1 did not establish any revival rolling mill unit in terms of the notification dated february 1, 2003 and as such it is not entitled to any sort of exemption. the appellate authority further relaxed the limit of maximum exemption of cumulative quantum of tax which was fixed to be rs. 4.10 crores in the notification dated february 1, 2003 and directed that in view of enforcement of vat act, 2002 a fresh notification is required to be issued providing for continuation of relief in favour of respondent no. 1 company till january 31, 2012 without any monetary limit as per the terms envisaged in the sanction scheme of 1996. it is contended that there was no justification for revival of the scheme and grant of benefit of vat by directing issue of a notification.8. a reply on behalf of respondent no. 1 has been filed contending, inter alia, the draft scheme was circulated by the bifr vide letter dated june 4, 1996 as per annexure r1. the proposed sanctioning of the scheme was notified in a local newspaper by the bifr as contained in annexure r2. after following due procedure the scheme was brought into force on august 21, 1996, annexure p3. a reference has been made to paragraph 3.5 of the said scheme to pyramid the stand that the benefit of exemption was granted for a period of nine years, and no objection was filed by the state government in respect of the proposed draft scheme but on the contrary, consent was given for sales tax exemption at the time of hearing for the purpose of sanctioned scheme. respondent no. 1 referred to the correspondence with the principal secretary, commercial tax and other departments to show that respondent no. 1 had informed the petitioner before issuance of the notification about the products that will be manufactured in its unit by the respondent. the said letter has been brought on record as annexure r3. reliance has been placed on dic registration certificate, annexure r4, to highlight that all products dealt with by the respondent are mentioned. the petitioner, thereafter issued the exemption notification on february 1, 2003 exempting the respondent for a period of nine years from february 1, 2003 to january 31, 2012. in the said notification it has been mentioned that exemption in respect of goods manufactured by respondent no. 1 in its rolling mill unit and it has also been mentioned that exemption would be available in respect of sale of manufactured goods, raw material, incidental goods, goods consumed and packing material. the words used clearly reveal that the exemption relates to the goods manufactured in the unit. a chronology has been shown to highlight that proper facts have not been considered by the state government and an endeavour has been made to show that the exemption was given only to rolling mill. in justification of the order of review it is pleaded that after the notification dated february 1, 2003 issued with certain restrictions in respect of the monetary limits, respondent no. 1 filed an objection before the state government by letter dated february 5, 2003 and july 4, 2006 asking it to issue a fresh notification without monetary limit. in pursuance of the said letter the state government through its commerce and industry department had communicated that respondent no. 1 should be granted exemption under the vat act. a similar communication was also sent in january, 2007 by the commerce and industry department to the principal secretary, government of madhya pradesh. the said communications have been brought on record as annexure r6 and annexure r7, respectively. the bifr took note of the fact that the government of madhya pradesh had not complied with the sanctioned scheme dated august 21, 1996 and expressed the view that the scheme was a lawful order and the state government was bound to follow the same and accordingly directed the state government to extend the necessary relief and concession as per the scheme. there was non-compliance of the sanctioned scheme and the order dated july 4, 2006, annexure r8. the company filed a petition for issue of directions before the bifr for the removal of monetary limit imposed in the notification and for extension of the benefit under the vat act. the bifr considered the memorandum filed by respondent no. 1 and hearing the operating agency directed the state government to grant exemption of sales tax under the vat act and also to issue notification that monetary limit be removed since that was envisaged in the sanctioned scheme in paragraph 3.5 itself. it is contended that the state government did not challenge the order dated july 4, 2006 wherein it was ordered to comply with the sanctioned scheme and was further directed to extend the benefit of exemption under the vat act. a reference has been made to section 18 of the sick industrial companies (special provisions) act, 1985 (for short, 'the act') which empowers the bifr to monitor periodically the implementation of the sanctioned scheme. it is urged that the state government was a party to the initial sanction of scheme and the scheme was clear and, therefore, the bifr passed the order. it is contended that section 72 of the m. p. vat act, 2002 clearly stipulates that the reliefs to which a company was entitled as per the earlier enactment including the facility of exemption/deferment, etc., would be continued for the balance unexpired period. a reference has been made to the notification no. a-3-195-205-1-v(31), dated march 31, 2006 wherein it was mentioned that registered dealers who were availing of exemption from sales tax, etc., would continue to get exemption under vat till the date of exemption mentioned in the original notification. it is put forth that in total disregard of the scheme as sanctioned by the bifr the exemption from payment of vat was not extended to the respondent, though similar benefit was provided to other industries. to buttress the said stand a copy of the notification dated march 31, 2006 has been brought on record as annexure r11. it is the case of respondent no. 1 that the bifr has not passed any fresh order but has only directed the benefit to be extended keeping in view the original scheme that was sanctioned and, therefore, the claim that an opportunity of being heard, was not offered, melts into insignificance; emphasis has been laid on the communication made by the department of commerce, industries and employment for implementing the decision of bifr which were ignored. it is contended that the directions given by the bifr as engrafted under section 32 of the sica, 1985 are to be followed in letter and spirit inasmuch as the said directions have the overriding effect and the state government cannot wriggle out of it.9. we have heard mr. v. k. shukla, learned deputy advocate-general for the petitioner-state and mr. h. s. shrivastava, learned senior advocate and mr. sumit nema, learned counsel for the respondents.10. mr. v.k. shukla, learned counsel for the state has raised the following grounds:(a) the respondent did not establish any rolling mill and did not manufacture any rolling product and, therefore, it cannot claim any exemption from the sales tax.(b) the bifr had not taken any consent from the state government while granting exemption and, therefore, the order is unsustainable.(c) the bifr has not afforded an opportunity of hearing to the state government before issuing any direction and the order is vulnerable.(d) the bifr as well as the appellate forum, aaifr has committed grave error by deleting the maximum exemption cumulative of quantum of tax which was prescribed by the department.(e) the bifr has erroneously extended the benefit of vat act to the respondents and hence, the order deserves to be cancelled.11. mr. h.s. shrivastava, learned senior counsel and mr. sumit nema, advocate for the respondent, advanced the following proponements:(i) the bifr has passed an order by accepting the scheme in the year 1996 and the state government had not expressed any objection as the orders would reflect and, therefore, the grievance that the state's consent was not taken is totally unacceptable.(ii) the state government by letter dated november 13, 2002 had asked the respondent-company as to what products were being manufactured since the same have to be notified as per the bifr order in case no. 48 of 1994 and in response to the said letter the respondent by letter dated january 8, 2003 had intimated the principal secretary with a copy to the commissioner of commercial tax and industries commissioner stating that the unit has installed various types of furnaces and other equipment to manufacture items of mild steel, ms alloy steel and other ms cast articles, ms and alloy steel ingot, non-malleable cast steel billets, rolled products, forging heavy fabrication, etc., and only thereafter the state government had issued a notification on february 1, 2003 exempting the respondent's rolling mill unit for a period of nine years from february 1, 2003 to january 31, 2012 in respect of sale of manufactured goods, raw material and incidental goods consumed or used in manufacturing of goods and the same would go a long way to show that the state government was very much aware what it has done except that it restricted the amount to rs. 4.1 crores.(iii) the communication made by the department of industries to the commercial tax department would show that the respondent was entitled to the benefit for the period fixed and also the benefit under the vat act.(iv) the bifr had only reiterated the scheme of 1996 and nothing new was added and the directions given by the bifr would show that the reference was made to clause 3.5 of scheme of 1996 and hence, there was no error with the order and the concurrence with the same by the aaifr cannot be found fault with.12. to appreciate the aforesaid submission it is apposite to refer first to the order passed by the bifr. in paragraphs 1.3 and 1.4 it stated thus:1.3 the company had not provided for the plant and machinery required for foundry items in the original project cost which it subsequently purchased secondhand by diverting working capital funds and started manufacturing value added casting items and steel ingots simultaneously. it also had to install another arc furnace and rolling mill to economise on costs and in the process working capital funds continued to be diverted resulting into acute shortage of working capital. as a consequence, the overall production and the capacity utilization continued to remain at extremely low level on account of which the company's financial position deteriorated. the non-availability of uninterrupted power supply due to power shortage, recession in industry and lack of product standardization further added to company's problems.1.4 the company made a reference to bifr in 1994. at that time it had accumulated losses to rs. 522 lakhs which had made its nets worth negative by rs. 469 lakhs. bank of india (boi) was appointed as the operating agency (oa) in the hearing held on june 13, 1994 with directions to examine the viability and prepare a report for revival of the company. the company proposed in 1995 to settle the dues of boi and mpfc under ots by selling two floors of the building owned by company and its promoter in parts. the m.p. government by then agreed to grant the company the status of a relief undertaking.13. thereafter, adverting to other facts the bifr addressed the reliefs and concessions. paragraph 3.5 dealt with exemption of sales tax. the said paragraph is reproduced below in entirety:3.5 sales tax(a) exemption of sales tax benefit for further period of five years from november 8, 1997.(b) the arrears of entry tax/sales tax of rs. 0.67 lakhs up to march 31, 1995 to be paid in instalments commencing from april 1, 1996.(c) the penalty levied to be waived.(d) the extension of sales tax benefit for nine years in case of the rolling mills which is pending due to settlement of dispute of land with mpavn, bhopal.14. in paragraph 5.6 the bifr had observed as follows:5.6 the package shall be subject to annual review and based on that the bank/state government shall have right to recompense for the losses/sacrifices undertaken by them and enhance the rate of interest and/or accelerate the repayment schedule of the debts owed to them if, in their opinion, the profitability of the company, its cash flow, etc., so warrant. however, this can only be done with the prior approval of bifr.15. eventually, in paragraph 7 of the order the board directed as under:7. the scheme shall come into force with immediate effect and shall be implemented by all concerned as per the time-frame stipulated in the scheme and the enclosed compliance schedule.16. thereafter, the state government published a notification on february 1, 2003 as per annexure p-5, the schedule of which reads as follows:----------------------------------------------------------------------------------------------- maximum period extent of maximum within which the restrictions and conditionsname of the exemption of cumulative quantum of exemption subject to which the dealer quantum of tax is available exemption is granted----------------------------------------------------------------------------------------------- (1) (2) (3) (4)-----------------------------------------------------------------------------------------------saurabh tax payable under the nine years, from this exemption shall bemetals pvt. above acts and on sub- february 1, 2003 to available in respect of,:ltd., man- sequent sales of manu- january 31, 2012 or (i) sale of manufactureddideep factured goods, limited the period under goods,distt., to rs. 4.10 crore or to the policy changed (ii) raw material or inci-raisen. the extent of the tax by the government dental goods con- payable under the pol- during the period, sumed or used in the icy changed by the whichever is manufacture of government during the earlier. goods, and period, whichever is (iii) packing material used less. in the packing of goods manufactured, in such unit.-----------------------------------------------------------------------------------------------17. after the said notification was issued the respondent submitted various representations but as nothing ensued, it approached bifr again. the bifr took note of the approved scheme sanctioned by the board under section 18(4) of the act vide order dated august 21, 1996 and stated the facts in paragraph 4(i) to (ii) as under:4(i) the company, vide their subsequent letter dated february 15, 2007, intimated that, in terms of the provision(s), vide para 3.5(d) of the ss-96, the sales tax department of the government of madhya pradesh (gomp) is to extend the sales tax benefits for a period of 9 (nine) years, in respect of the rolling mill unit, which was pending due to settlement of dispute of land with mpavn, bhopal. the company also brought-out therein that the gomp, vide their notification dated february 1, 2003, extended the reliefs/concessions in respect of the sales tax, for a period of 9 (nine) years, i.e., as envisaged in the ss-96, subject to a limit of rs. 4.10 crs., although the ss-96 does not stipulate any monetary limit for grant of the said relief. the company further brought out that the gomp introduced vat with effect from april 1, 2006 but the gomp has not yet extended the benefit under vat and the 'commercial tax deptt.', gomp issued a demand notice of rs. 5.83 lakhs (approx.) dated october 13, 1996 on the company in respect of the applicability of vat for the period from april to june, 2006.(ii) the company, finally, requested the board to issue necessary direction(s) to the sales tax department of the gomp to desist from illegal action(s) and to issue a revised notification, in consonance with the ss-96, i.e., to permit the company to take sale tax benefits, for a period of 9 (nine) years in respect of the rolling mill unit without any limit and also to include the company's name in the list of the unit(s), which are being exempted from payment of vat for the period from april 1, 2006 to january 31, 2012.18. the board taking note of the fact-situation directed as follows:(b) the sales tax department, gomp, keeping in view the long-term profitability/viability of the company m/s. smpl, to grant exemption of sales tax to the company up to march 31, 2006 and, in view of the substitution of applicability of sales tax by vat with effect from april 1, 2006 the gomp, in terms of their notification dated february 1, 2003, to also grant exemption to the company from the applicability of vat for the remaining period, i.e., up to january 31, 2012, as contained in the notification dated february 1, 2003 issued by the gomp in this regard without any monetary limit, as envisaged in para 3.5, page 6 of the ss-96.19. at this juncture it is appropriate to refer to the order passed by the aaefr. as is evincible from the order dated may 17, 2007 passed by bifr, the bifr, apart from other things, deregistered the respondent-company from the purview of sica and directed the sales tax department of the government of madhya pradesh to grant exemption to the respondent-company from sales tax up to march 31, 2006 and thereafter from vat with effect from april 1, 2006. it was contended before the appellate authority that the state government had granted exemption from the payment vide notification dated february 1, 2003 only in respect of goods manufactured by the company in its rolling mill unit established by it at plot no. 22, new industrial area, mandideep, raisen but the company has not established the rolling mill and had not manufactured rolled products. it was also urged that the company manufactured steel casting products. it was also contended that the state could not be directed to extend the benefit to continue grant of exemption to the respondent-company under the m. p. vat act, 2002. it was also urged that in the notification upper-limit of rs. 4.10 crores was fixed and the company had already availed of the same and hence, was not entitled to further relief for its rolling mill unit. in addition to this it was submitted that the state was not heard in the matter before the impugned order came to be passed. the appellate authority took into consideration the rival stands and stances and narrated the same and eventually expressed the view as follows:4. we have heard the submissions of the appellant and the respondent-company. it is evident from the submissions made by the counsel of the appellant and m/s. saurabh metals pvt. ltd. (whose rolling mills unit is situated at 22, new industrial area, mandideep) as also the material placed on record that the bifr by its order dated may 17, 2007 has issued directions to the government of madhya pradesh to grant the reliefs as entailed in para 3.5, page 6 of sanctioned scheme, 1996 and had only clarified that the company shall be exempted from the applicability of vat instead of sales tax in view of the substitution of sales tax by vat. it is noticed from the documents placed on record that it has been specified in section 72 of the m. p. vat act, 2002 that the parties who were eligible to avail of facility of the exemption/deferment of payment as per the earlier enactment are entitled to avail of the said facilities as per the new enactment. as such, there was no variance in the terms of the sanctioned scheme but a mere reiteration of the terms entailed in the sanctioned scheme and direction to the appellant to grant the requisite reliefs and concessions as per the terms of the sanctioned scheme. thus, there was no requirement to seek the consent of the appellant in terms of section 19(1) of the sica as no fresh cause of action had emerged. it is further noteworthy that the bifr had examined the factual matrix and only on taking into consideration the vital facts regarding the relief and concession entailed in the sanctioned scheme of 1996 had directed the grant of such relief. the objection raised by the appellant that the company has not manufactured rolled products and hence exemption could not be allowed is not tenable as it is contrary to the terms entailed in the sanctioned scheme, 1996 and the notification dated february 1, 2003 whereby the exemption from payment of tax was allowed in respect of goods manufactured in its rolling mill unit. the plea taken by the appellant that the net worth of the company has turned positive and therefore it was not entitled to any relief is also without any genesis since the net worth of the company turned positive pursuant to the sanctioning of the scheme does not disentitle the company from the relief and concession, which were entailed to be granted to the sick industrial company since the object of sica is the long-term viability of a company, whose net worth has turned negative at one stage. it is further noticed that there is no violation of the principles of natural justice of the appellant since the order of the bifr dated may 17, 2007 is merely confirmatory in nature and is in furtherance of its earlier order dated july 4, 2006 and are in consonance with the terms entailed in the sanctioned scheme, wherein the consent of all the parties including the government of madhya pradesh was in place.5. therefore, there is no infirmity in the impugned order whereby the bifr while deregistering m/s. saurabh metals pvt. ltd. from the purview of the sica has directed the appellant to grant the requisite reliefs and concession in line with para 3.5 of the sanctioned scheme, 1996 and the notification issued by the appellant in this regard on february 1, 2003. however, it is noticed that there was an infirmity in the notification issued on february 1, 2003 as it quantified the amount at rs. 4.10 crores. the said quantification is erroneous and contrary to the sanctioned scheme, 1996. in such a scenario, there is a requirement for issuance of a fresh notification. we accordingly, direct that in terms of the notification no. a-3-195-2005-l-v(31), dated march 31, 2006 a fresh notification be issued providing for continuation of the relief and concession under mpvat act, 2002 till january 31, 2012 without any monetary limit, as per the terms envisaged in para 3.5, page 6 of the sanctioned scheme, 1996.20. we have referred to the aforesaid order in extenso to understand the real controversy in issue. submission of mr. shukla, learned deputy advocate general for the state is that the respondent-company had not commenced the production and the production was not in the specified area. it is also his submission that the state should have been heard in the matter. at this juncture, we think it condign to refer to notification which was issued in terms of sanctioned scheme. it is also worth noting that the state government did not object to the sanctioned scheme. mr. shukla fairly conceded to the fact that in initial 1996 scheme the state was a party and had agreed for the said scheme. on the basis of the said notification which has been brought on record the state government has granted exemption as specified in the column 1 of the schedule (which has been reproduced hereinabove) from the payment in rolling mill units established at new mandideep, raisen. the appellate authority has appositely taken note of the same and not accepted the submission of the state with regard to the factum that the respondent is not engaged in manufacturing of goods in rolling mills. it is noticeable that the notification had fixed the financial limit. clause 3.5 of the scheme which we have reproduced above did not fix any financial limit. paragraph 3.5 of the sanctioned scheme, 1996 is clear and unambiguous. it clearly stated that sales tax benefit for further period of nine years in case of the rolling mills which is pending due to settlement of dispute of land with mpavn, bhopal. the state government had granted the benefit. when there is nothing in the original scheme with regard to fiscal limit, the scheme should have been allowed to prevail being a scheme framed under section 18(1) of the act and there could not have been a restriction as regards the fiscal limit.21. on a query being made from mr. shukla on what basis the financial limit has been fixed and whether it finds place in the original scheme, we must appreciably state that mr. shukla, submitted with all fairness at his command, that the original scheme did not envisage the same. what is urged by him with vehemence is that the state should have been heard when the grievance was made by the respondent-company. similar grievance has been made before the appellate authority. it is worth noting that bifr on may 17, 2007 had directed the state government in the following terms:(b) the sales tax deptt, gomp keeping in view the long-term profitability/viability of the company m/s. smpl, to grant exemption of sales tax to the company up to march 31, 2006 and, in view of the substitution of applicability of sales tax by vat with effect from april 1, 2006 the gomp, in terms of their notification dated february 1, 2003, to also grant exemption to the company from the applicability of vat for the remaining period, i.e., up to january 31, 2012, as contained in the notification dated february 1, 2003 issued by the gomp in this regard without any monetary limit, as envisaged in para 3.5, page 6 of the ss-96.22. we have quoted this paragraph again to get a clear picture frescoed and projected.23. in view of the aforesaid, we are of the considered opinion that the direction issued by the bifr is in conformity with the original scheme and it has not travelled beyond the mandate of the original scheme. be it placed on record, we have also asked mr. shukla as to which stand of the petitioner would dislodge the order. except stating that they have not entered into production, the learned deputy advocate general for the state, could not enlighten us. it is demonstrable from the documents brought on record that the exemption was granted for rolling mill unit but nothing has been mentioned therein that it is for a particular place and correctly so. we are disposed to hold so as that is in accord with the original scheme.24. section 72 of the mpvat act, 2002 protect exemption already granted. the relevant part of the said provision reads as under:72. repeal and savings.-the madhya pradesh vanijyik kar adhiniyam, 1994 (no. 5 of 1995) shall stand repealed on the date of coming into force of this act:provided that:(i) such repeal shall not:(a) affect the previous operation of the act so repealed or act no. 2 of 1959 repealed by act no. 5 of 1995 (hereinafter referred to as a repealed act) or anything duly done or suffered, thereunder ; or(b) affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed act, except the right or privilege accrued under that act for availing of the facility of industrial concession by way of exemption from or deferment of payment of tax by registered dealers who had established new industrial units in the state of madhya pradesh or undertaken expansion, modernisation or diversification in such industrial unit or exemption from payment of tax by registered dealers who had established hotel under the new tourism policy, 1995 or the heritage tourism policy of the government of madhya pradesh ; or . . .25. in view of the aforesaid, we are of the considered opinion, that the directions issued by the bifr and affirmed by the aaifr are in consonance with the original scheme which was accepted by the state government as a consenting party and, therefore, any deviancy thereof is neither just nor proper. when the original scheme did not fix any financial limit, the same could not have been incorporated in the notification. thus, the orders passed by the bifr and aaifr are just and proper and there is no warrant of interference.26. resultantly, the writ petition, being devoid of merit, stands dismissed. however, in the facts and circumstances of the case there shall be no order as to costs.

Judgment:
ORDER

Dipak Misra, J.

1. Invoking the extraordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India, the petitioner, Commissioner, Commercial Tax, Government of Madhya Pradesh, has prayed for issue of a writ of certiorari for quashment of the order dated December 12, 2007 passed by the Appellate Authority for Industrial and Financial Reconstruction, New Delhi in Appeal No. 238 of 2007 and order dated May 17, 2007 passed by the Board for Industrial and Financial Reconstruction in Case No. 48 of 1994-M/s. S.M.P.L. and to grant any other appropriate relief as deemed fit in the facts and circumstances of the case.

2. The facts as have been uncurtained are that respondent No. 1, M/s. Saurabh Metals Pvt. Ltd., moved an application before the Board for Industrial and Financial Reconstruction, New Delhi (for short, 'the BIFR') conveying that it had accumulated loss of Rs. 522 lacs which had made its net worth negative by Rs. 469 lacs. The Bank of India was appointed as an operating agency on June 13, 1994 with the directions to examine the viability and prepare a report for the revival of the company. The company proposed in 1995 to settle the dues of the Bank of India and the Madhya Pradesh Financial Corporation (for short, 'the MPFC') by selling some assets of the company in the prescribed manner. The State Government agreed to grant the company status of relief undertaking.

3. As set forth in the petition the respondent-company submitted its revival plan which was examined by an operating agency and subsequently a draft rehabilitation plan for the company was circulated. The claim of the respondent was approved by the BIFR on August 21, 1996. In the revival scheme certain provisions for relaxation were made in respect of commercial tax and certain dues pertaining to M. P. State Electricity Board. A reference has been made to paragraph 3.5 of the revival scheme which deals with exemption pertaining to sales tax. Emphasis has been laid on Sub-clause (d) of Clause 3.5. The said clause prescribes that the extension of sales tax benefit should be given to the company for a period of nine years in case of the rolling mills which is pending due to settlement of dispute of land with Madhya Pradesh Audyogik Vikas Nigam, Bhopal (for short, 'the Nigam'). No evidence with regard to the said dispute was brought on record during the proceeding before the BIFR on behalf of the Industries Department. It is averred that respondent No. 1-company was allotted two plots in the industrial area but the said company never utilised the aforesaid plots while establishing its industrial units. In fact, the functioning of the company pertains to plot No. 22 and plot No. 1 is still lying vacant.

4. It is asserted in the petition that respondent No. 1 was incorporated as a company to manufacture steel ingots/castings but in the revival scheme the aforesaid company restricted itself only to instal rolling mills and the BIFR considered it appropriate to approve the aforesaid scheme. A reference has been made to Clause 3.5 of the revival scheme to highlight that there were specific stipulations as regards extension of sales tax benefit in case of rolling mills which had been undertaken by the company to establish. The revival scheme approved by the BIFR, as set forth, was placed before the High Power Committee of the State Government for further directions in terms of the Policy Package of 1988 ; and in a meeting held on May 24, 2002 the said committee accepted the reasons shown by the company and decided to grant exemption in respect of the rolling mills from levying commercial tax/entry tax for a period of nine years from April, 2002. The said minutes of the meeting of the Higher Power Committee, dated May 24, 2002 have been brought on record as annexure P1. Keeping in view the decision of the committee and the revival scheme approved by the BIFR a notification was issued by the Department of Commercial Tax on February 1, 2003 as per annexure P5. By the said notification the State Government exempted respondent No. 1 from payment of tax in respect of goods manufactured by it in its rolling mill unit established in the new industrial area, Mandideep, Raisen in the prescribed manner. In the Schedule appended to the notification in column No. 2 the extent of maximum exemption of cumulative quantum of tax was prescribed up to limit of Rs. 4.10 crores or to the extent of tax payable under the policy changed by the Government during the period, whichever is less. In column No. 3 of the said Schedule the maximum period within which the quantum of exemption is available, was prescribed to be nine years commencing, February 1, 2003 up to January 31, 2012 or the period under the policy changed by the Government during the period, whichever is earlier. In column 4 of the aforesaid Schedule restrictions and conditions subject to which exemption was granted was prescribed that such exemption was to be in respect of sale of manufactured goods, raw materials or incidental goods consumed or used in manufacture of goods and packing material used in packing of goods manufactured in such units.

5. It is asseverated that respondent No. 1, company failed to establish rolling mill unit in the industrial area but in papers it has shown the status of the rolling mill in order to avail of exemption under the revival scheme. It is contended that unless the company establishes the rolling mill unit in the industrial area it would not be entitled to get any sort of exemption in terms of the revival scheme or notification issued by the State Government. Certain documents have been brought on record as to how respondent No. 1 company has not established the rolling mill.

6. It is further contended that VAT Act, 2002 came into force with effect from April 1, 2006 and the exemption was granted under the notification dated February 1, 2003 which was confined only up to April 1, 2006. Respondent No. 1 had filed a review before the BIFR seeking exemption beyond April 1, 2006. The said review was allowed by the BIFR by order dated May 17, 2007 wherein it was held that keeping in view the long-term profitability/viability of the company the Sales Tax Department will grant exemption of tax to the company, up to January 31, 2012 as contained in the notification dated February 1, 2003 issued by the Government of Madhya Pradesh without any monetary limit in view of para 3.5 of the Scheme of 1996. It is urged that the said directions given by the BIFR are in complete derogation of the sanction scheme of 1996 which was approved by the BIFR as well as by the High Level Committee of the State Government. The Revival Scheme, 1996 should not have been subject to review for the purpose of granting unwarranted exemption to respondent No. 1, company.

7. It is urged that the aforesaid order passed by the BIFR was assailed before the Appellate Authority for Industrial and Financial Reconstruction, New Delhi (for short, 'the AAIFR'). The appellate authority rejected the objection raised by the petitioner. The basic objection was that if the company was not manufacturing rolled-products it could not have been allowed exemption. It is submitted that the appellate authority failed to appreciate that respondent No. 1 did not establish any revival rolling mill unit in terms of the notification dated February 1, 2003 and as such it is not entitled to any sort of exemption. The appellate authority further relaxed the limit of maximum exemption of cumulative quantum of tax which was fixed to be Rs. 4.10 crores in the notification dated February 1, 2003 and directed that in view of enforcement of VAT Act, 2002 a fresh notification is required to be issued providing for continuation of relief in favour of respondent No. 1 company till January 31, 2012 without any monetary limit as per the terms envisaged in the sanction scheme of 1996. It is contended that there was no justification for revival of the scheme and grant of benefit of VAT by directing issue of a notification.

8. A reply on behalf of respondent No. 1 has been filed contending, inter alia, the draft scheme was circulated by the BIFR vide letter dated June 4, 1996 as per annexure R1. The proposed sanctioning of the scheme was notified in a local newspaper by the BIFR as contained in annexure R2. After following due procedure the scheme was brought into force on August 21, 1996, annexure P3. A reference has been made to paragraph 3.5 of the said scheme to pyramid the stand that the benefit of exemption was granted for a period of nine years, and no objection was filed by the State Government in respect of the proposed draft scheme but on the contrary, consent was given for sales tax exemption at the time of hearing for the purpose of sanctioned scheme. Respondent No. 1 referred to the correspondence with the Principal Secretary, Commercial Tax and other Departments to show that respondent No. 1 had informed the petitioner before issuance of the notification about the products that will be manufactured in its unit by the respondent. The said letter has been brought on record as annexure R3. Reliance has been placed on DIC Registration Certificate, annexure R4, to highlight that all products dealt with by the respondent are mentioned. The petitioner, thereafter issued the exemption notification on February 1, 2003 exempting the respondent for a period of nine years from February 1, 2003 to January 31, 2012. In the said notification it has been mentioned that exemption in respect of goods manufactured by respondent No. 1 in its rolling mill unit and it has also been mentioned that exemption would be available in respect of sale of manufactured goods, raw material, incidental goods, goods consumed and packing material. The words used clearly reveal that the exemption relates to the goods manufactured in the unit. A chronology has been shown to highlight that proper facts have not been considered by the State Government and an endeavour has been made to show that the exemption was given only to rolling mill. In justification of the order of review it is pleaded that after the notification dated February 1, 2003 issued with certain restrictions in respect of the monetary limits, respondent No. 1 filed an objection before the State Government by letter dated February 5, 2003 and July 4, 2006 asking it to issue a fresh notification without monetary limit. In pursuance of the said letter the State Government through its Commerce and Industry Department had communicated that respondent No. 1 should be granted exemption under the VAT Act. A similar communication was also sent in January, 2007 by the Commerce and Industry Department to the Principal Secretary, Government of Madhya Pradesh. The said communications have been brought on record as annexure R6 and annexure R7, respectively. The BIFR took note of the fact that the Government of Madhya Pradesh had not complied with the sanctioned scheme dated August 21, 1996 and expressed the view that the scheme was a lawful order and the State Government was bound to follow the same and accordingly directed the State Government to extend the necessary relief and concession as per the Scheme. There was non-compliance of the sanctioned scheme and the order dated July 4, 2006, annexure R8. The company filed a petition for issue of directions before the BIFR for the removal of monetary limit imposed in the notification and for extension of the benefit under the VAT Act. The BIFR considered the memorandum filed by respondent No. 1 and hearing the operating agency directed the State Government to grant exemption of sales tax under the VAT Act and also to issue notification that monetary limit be removed since that was envisaged in the sanctioned scheme in paragraph 3.5 itself. It is contended that the State Government did not challenge the order dated July 4, 2006 wherein it was ordered to comply with the sanctioned scheme and was further directed to extend the benefit of exemption under the VAT Act. A reference has been made to Section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, 'the Act') which empowers the BIFR to monitor periodically the implementation of the sanctioned scheme. It is urged that the State Government was a party to the initial sanction of scheme and the scheme was clear and, therefore, the BIFR passed the order. It is contended that Section 72 of the M. P. VAT Act, 2002 clearly stipulates that the reliefs to which a company was entitled as per the earlier enactment including the facility of exemption/deferment, etc., would be continued for the balance unexpired period. A reference has been made to the Notification No. A-3-195-205-1-V(31), dated March 31, 2006 wherein it was mentioned that registered dealers who were availing of exemption from sales tax, etc., would continue to get exemption under VAT till the date of exemption mentioned in the original notification. It is put forth that in total disregard of the scheme as sanctioned by the BIFR the exemption from payment of VAT was not extended to the respondent, though similar benefit was provided to other industries. To buttress the said stand a copy of the notification dated March 31, 2006 has been brought on record as annexure R11. It is the case of respondent No. 1 that the BIFR has not passed any fresh order but has only directed the benefit to be extended keeping in view the original scheme that was sanctioned and, therefore, the claim that an opportunity of being heard, was not offered, melts into insignificance; Emphasis has been laid on the communication made by the Department of Commerce, Industries and Employment for implementing the decision of BIFR which were ignored. It is contended that the directions given by the BIFR as engrafted under Section 32 of the SICA, 1985 are to be followed in letter and spirit inasmuch as the said directions have the overriding effect and the State Government cannot wriggle out of it.

9. We have heard Mr. V. K. Shukla, learned Deputy Advocate-General for the petitioner-State and Mr. H. S. Shrivastava, learned Senior Advocate and Mr. Sumit Nema, learned Counsel for the respondents.

10. Mr. V.K. Shukla, learned Counsel for the State has raised the following grounds:

(a) The respondent did not establish any rolling mill and did not manufacture any rolling product and, therefore, it cannot claim any exemption from the sales tax.

(b) The BIFR had not taken any consent from the State Government while granting exemption and, therefore, the order is unsustainable.

(c) The BIFR has not afforded an opportunity of hearing to the State Government before issuing any direction and the order is vulnerable.

(d) The BIFR as well as the appellate forum, AAIFR has committed grave error by deleting the maximum exemption cumulative of quantum of tax which was prescribed by the Department.

(e) The BIFR has erroneously extended the benefit of VAT Act to the respondents and hence, the order deserves to be cancelled.

11. Mr. H.S. Shrivastava, learned Senior Counsel and Mr. Sumit Nema, Advocate for the respondent, advanced the following proponements:

(i) The BIFR has passed an order by accepting the scheme in the year 1996 and the State Government had not expressed any objection as the orders would reflect and, therefore, the grievance that the State's consent was not taken is totally unacceptable.

(ii) The State Government by letter dated November 13, 2002 had asked the respondent-company as to what products were being manufactured since the same have to be notified as per the BIFR order in Case No. 48 of 1994 and in response to the said letter the respondent by letter dated January 8, 2003 had intimated the Principal Secretary with a copy to the Commissioner of Commercial Tax and Industries Commissioner stating that the unit has installed various types of furnaces and other equipment to manufacture items of mild steel, MS alloy steel and other MS cast articles, MS and alloy steel ingot, non-malleable cast steel billets, rolled products, forging heavy fabrication, etc., and only thereafter the State Government had issued a notification on February 1, 2003 exempting the respondent's rolling mill unit for a period of nine years from February 1, 2003 to January 31, 2012 in respect of sale of manufactured goods, raw material and incidental goods consumed or used in manufacturing of goods and the same would go a long way to show that the State Government was very much aware what it has done except that it restricted the amount to Rs. 4.1 crores.

(iii) The communication made by the Department of Industries to the Commercial Tax Department would show that the respondent was entitled to the benefit for the period fixed and also the benefit under the VAT Act.

(iv) The BIFR had only reiterated the scheme of 1996 and nothing new was added and the directions given by the BIFR would show that the reference was made to Clause 3.5 of Scheme of 1996 and hence, there was no error with the order and the concurrence with the same by the AAIFR cannot be found fault with.

12. To appreciate the aforesaid submission it is apposite to refer first to the order passed by the BIFR. In paragraphs 1.3 and 1.4 it stated thus:

1.3 The company had not provided for the plant and machinery required for foundry items in the original project cost which it subsequently purchased secondhand by diverting working capital funds and started manufacturing value added casting items and steel ingots simultaneously. It also had to install another arc furnace and rolling mill to economise on costs and in the process working capital funds continued to be diverted resulting into acute shortage of working capital. As a consequence, the overall production and the capacity utilization continued to remain at extremely low level on account of which the company's financial position deteriorated. The non-availability of uninterrupted power supply due to power shortage, recession in industry and lack of product standardization further added to company's problems.

1.4 The company made a reference to BIFR in 1994. At that time it had accumulated losses to Rs. 522 lakhs which had made its nets worth negative by Rs. 469 lakhs. Bank of India (BOI) was appointed as the Operating Agency (OA) in the hearing held on June 13, 1994 with directions to examine the viability and prepare a report for revival of the company. The company proposed in 1995 to settle the dues of BOI and MPFC under OTS by selling two floors of the building owned by company and its promoter in parts. The M.P. Government by then agreed to grant the company the status of a relief undertaking.

13. Thereafter, adverting to other facts the BIFR addressed the reliefs and concessions. Paragraph 3.5 dealt with exemption of sales tax. The said paragraph is reproduced below in entirety:

3.5 Sales tax

(a) Exemption of sales tax benefit for further period of five years from November 8, 1997.

(b) The arrears of entry tax/sales tax of Rs. 0.67 lakhs up to March 31, 1995 to be paid in instalments commencing from April 1, 1996.

(c) The penalty levied to be waived.

(d) The extension of sales tax benefit for nine years in case of the rolling mills which is pending due to settlement of dispute of land with MPAVN, Bhopal.

14. In paragraph 5.6 the BIFR had observed as follows:

5.6 The package shall be subject to annual review and based on that the bank/State Government shall have right to recompense for the losses/sacrifices undertaken by them and enhance the rate of interest and/or accelerate the repayment schedule of the debts owed to them if, in their opinion, the profitability of the company, its cash flow, etc., so warrant. However, this can only be done with the prior approval of BIFR.

15. Eventually, in paragraph 7 of the order the Board directed as under:

7. The scheme shall come into force with immediate effect and shall be implemented by all concerned as per the time-frame stipulated in the scheme and the enclosed compliance schedule.

16. Thereafter, the State Government published a notification on February 1, 2003 as per annexure P-5, the schedule of which reads as follows:

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Maximum period

Extent of maximum within which the Restrictions and conditions

Name of the exemption of cumulative quantum of exemption subject to which the

dealer quantum of tax is available exemption is granted

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(1) (2) (3) (4)

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Saurabh Tax payable under the Nine years, from This exemption shall be

Metals Pvt. above Acts and on sub- February 1, 2003 to available in respect of,:

Ltd., Man- sequent sales of manu- January 31, 2012 or (i) sale of manufactured

dideep factured goods, limited the period under goods,

Distt., to Rs. 4.10 crore or to the policy changed (ii) raw material or inci-

Raisen. the extent of the tax by the Government dental goods con-

payable under the pol- during the period, sumed or used in the

icy changed by the whichever is manufacture of

Government during the earlier. goods, and

period, whichever is (iii) packing material used

less. in the packing of

goods manufactured,

in such unit.

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17. After the said notification was issued the respondent submitted various representations but as nothing ensued, it approached BIFR again. The BIFR took note of the approved Scheme sanctioned by the Board under Section 18(4) of the Act vide order dated August 21, 1996 and stated the facts in paragraph 4(i) to (ii) as under:

4(i) The company, vide their subsequent letter dated February 15, 2007, intimated that, in terms of the provision(s), vide para 3.5(d) of the SS-96, the Sales Tax Department of the Government of Madhya Pradesh (GOMP) is to extend the sales tax benefits for a period of 9 (nine) years, in respect of the rolling mill unit, which was pending due to settlement of dispute of land with MPAVN, Bhopal. The company also brought-out therein that the GOMP, vide their notification dated February 1, 2003, extended the reliefs/concessions in respect of the sales tax, for a period of 9 (nine) years, i.e., as envisaged in the SS-96, subject to a limit of Rs. 4.10 crs., although the SS-96 does not stipulate any monetary limit for grant of the said relief. The company further brought out that the GOMP introduced VAT with effect from April 1, 2006 but the GOMP has not yet extended the benefit under VAT and the 'Commercial Tax Deptt.', GOMP issued a demand notice of Rs. 5.83 lakhs (Approx.) dated October 13, 1996 on the company in respect of the applicability of VAT for the period from April to June, 2006.

(ii) The company, finally, requested the Board to issue necessary direction(s) to the Sales Tax Department of the GOMP to desist from illegal action(s) and to issue a revised notification, in consonance with the SS-96, i.e., to permit the company to take sale tax benefits, for a period of 9 (nine) years in respect of the rolling mill unit without any limit and also to include the company's name in the list of the unit(s), which are being exempted from payment of VAT for the period from April 1, 2006 to January 31, 2012.

18. The Board taking note of the fact-situation directed as follows:

(b) The Sales Tax Department, GOMP, keeping in view the long-term profitability/viability of the company M/s. SMPL, to grant exemption of sales tax to the company up to March 31, 2006 and, in view of the substitution of applicability of sales tax by VAT with effect from April 1, 2006 the GOMP, in terms of their notification dated February 1, 2003, to also grant exemption to the company from the applicability of VAT for the remaining period, i.e., up to January 31, 2012, as contained in the notification dated February 1, 2003 issued by the GOMP in this regard without any monetary limit, as envisaged in para 3.5, page 6 of the SS-96.

19. At this juncture it is appropriate to refer to the order passed by the AAEFR. As is evincible from the order dated May 17, 2007 passed by BIFR, the BIFR, apart from other things, deregistered the respondent-company from the purview of SICA and directed the Sales Tax Department of the Government of Madhya Pradesh to grant exemption to the respondent-company from sales tax up to March 31, 2006 and thereafter from VAT with effect from April 1, 2006. It was contended before the appellate authority that the State Government had granted exemption from the payment vide notification dated February 1, 2003 only in respect of goods manufactured by the company in its rolling mill unit established by it at Plot No. 22, New Industrial Area, Mandideep, Raisen but the company has not established the rolling mill and had not manufactured rolled products. It was also urged that the company manufactured steel casting products. It was also contended that the State could not be directed to extend the benefit to continue grant of exemption to the respondent-company under the M. P. VAT Act, 2002. It was also urged that in the notification upper-limit of Rs. 4.10 crores was fixed and the company had already availed of the same and hence, was not entitled to further relief for its rolling mill unit. In addition to this it was submitted that the State was not heard in the matter before the impugned order came to be passed. The appellate authority took into consideration the rival stands and stances and narrated the same and eventually expressed the view as follows:

4. We have heard the submissions of the appellant and the respondent-company. It is evident from the submissions made by the counsel of the appellant and M/s. Saurabh Metals Pvt. Ltd. (whose rolling mills unit is situated at 22, New Industrial Area, Mandideep) as also the material placed on record that the BIFR by its order dated May 17, 2007 has issued directions to the Government of Madhya Pradesh to grant the reliefs as entailed in para 3.5, page 6 of Sanctioned Scheme, 1996 and had only clarified that the company shall be exempted from the applicability of VAT instead of sales tax in view of the substitution of sales tax by VAT. It is noticed from the documents placed on record that it has been specified in Section 72 of the M. P. VAT Act, 2002 that the parties who were eligible to avail of facility of the exemption/deferment of payment as per the earlier enactment are entitled to avail of the said facilities as per the new enactment. As such, there was no variance in the terms of the sanctioned scheme but a mere reiteration of the terms entailed in the sanctioned scheme and direction to the appellant to grant the requisite reliefs and concessions as per the terms of the sanctioned scheme. Thus, there was no requirement to seek the consent of the appellant in terms of Section 19(1) of the SICA as no fresh cause of action had emerged. It is further noteworthy that the BIFR had examined the factual matrix and only on taking into consideration the vital facts regarding the relief and concession entailed in the sanctioned scheme of 1996 had directed the grant of such relief. The objection raised by the appellant that the company has not manufactured rolled products and hence exemption could not be allowed is not tenable as it is contrary to the terms entailed in the Sanctioned Scheme, 1996 and the notification dated February 1, 2003 whereby the exemption from payment of tax was allowed in respect of goods manufactured in its rolling mill unit. The plea taken by the appellant that the net worth of the company has turned positive and therefore it was not entitled to any relief is also without any genesis since the net worth of the company turned positive pursuant to the sanctioning of the scheme does not disentitle the company from the relief and concession, which were entailed to be granted to the sick industrial company since the object of SICA is the long-term viability of a company, whose net worth has turned negative at one stage. It is further noticed that there is no violation of the principles of natural justice of the appellant since the order of the BIFR dated May 17, 2007 is merely confirmatory in nature and is in furtherance of its earlier order dated July 4, 2006 and are in consonance with the terms entailed in the sanctioned scheme, wherein the consent of all the parties including the Government of Madhya Pradesh was in place.

5. Therefore, there is no infirmity in the impugned order whereby the BIFR while deregistering M/s. Saurabh Metals Pvt. Ltd. from the purview of the SICA has directed the appellant to grant the requisite reliefs and concession in line with para 3.5 of the Sanctioned Scheme, 1996 and the notification issued by the appellant in this regard on February 1, 2003. However, it is noticed that there was an infirmity in the notification issued on February 1, 2003 as it quantified the amount at Rs. 4.10 crores. The said quantification is erroneous and contrary to the Sanctioned Scheme, 1996. In such a scenario, there is a requirement for issuance of a fresh notification. We accordingly, direct that in terms of the Notification No. A-3-195-2005-l-V(31), dated March 31, 2006 a fresh notification be issued providing for continuation of the relief and concession under MPVAT Act, 2002 till January 31, 2012 without any monetary limit, as per the terms envisaged in para 3.5, page 6 of the Sanctioned Scheme, 1996.

20. We have referred to the aforesaid order in extenso to understand the real controversy in issue. Submission of Mr. Shukla, learned Deputy Advocate General for the State is that the respondent-company had not commenced the production and the production was not in the specified area. It is also his submission that the State should have been heard in the matter. At this juncture, we think it condign to refer to notification which was issued in terms of sanctioned scheme. It is also worth noting that the State Government did not object to the sanctioned scheme. Mr. Shukla fairly conceded to the fact that in initial 1996 Scheme the State was a party and had agreed for the said scheme. On the basis of the said notification which has been brought on record the State Government has granted exemption as specified in the column 1 of the Schedule (which has been reproduced hereinabove) from the payment in rolling mill units established at New Mandideep, Raisen. The appellate authority has appositely taken note of the same and not accepted the submission of the State with regard to the factum that the respondent is not engaged in manufacturing of goods in rolling mills. It is noticeable that the notification had fixed the financial limit. Clause 3.5 of the Scheme which we have reproduced above did not fix any financial limit. Paragraph 3.5 of the Sanctioned Scheme, 1996 is clear and unambiguous. It clearly stated that sales tax benefit for further period of nine years in case of the rolling mills which is pending due to settlement of dispute of land with MPAVN, Bhopal. The State Government had granted the benefit. When there is nothing in the original scheme with regard to fiscal limit, the scheme should have been allowed to prevail being a scheme framed under Section 18(1) of the Act and there could not have been a restriction as regards the fiscal limit.

21. On a query being made from Mr. Shukla on what basis the financial limit has been fixed and whether it finds place in the original scheme, we must appreciably state that Mr. Shukla, submitted with all fairness at his command, that the original scheme did not envisage the same. What is urged by him with vehemence is that the State should have been heard when the grievance was made by the respondent-company. Similar grievance has been made before the appellate authority. It is worth noting that BIFR on May 17, 2007 had directed the State Government in the following terms:

(b) The Sales Tax Deptt, GOMP keeping in view the long-term profitability/viability of the company M/s. SMPL, to grant exemption of sales tax to the company up to March 31, 2006 and, in view of the substitution of applicability of sales tax by VAT with effect from April 1, 2006 the GOMP, in terms of their notification dated February 1, 2003, to also grant exemption to the company from the applicability of VAT for the remaining period, i.e., up to January 31, 2012, as contained in the notification dated February 1, 2003 issued by the GOMP in this regard without any monetary limit, as envisaged in para 3.5, page 6 of the SS-96.

22. We have quoted this paragraph again to get a clear picture frescoed and projected.

23. In view of the aforesaid, we are of the considered opinion that the direction issued by the BIFR is in conformity with the original scheme and it has not travelled beyond the mandate of the original scheme. Be it placed on record, we have also asked Mr. Shukla as to which stand of the petitioner would dislodge the order. Except stating that they have not entered into production, the learned Deputy Advocate General for the State, could not enlighten us. It is demonstrable from the documents brought on record that the exemption was granted for rolling mill unit but nothing has been mentioned therein that it is for a particular place and correctly so. We are disposed to hold so as that is in accord with the original scheme.

24. Section 72 of the MPVAT Act, 2002 protect exemption already granted. The relevant part of the said provision reads as under:

72. Repeal and savings.-The Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995) shall stand repealed on the date of coming into force of this Act:

Provided that:

(i) such repeal shall not:

(a) affect the previous operation of the Act so repealed or Act No. 2 of 1959 repealed by Act No. 5 of 1995 (hereinafter referred to as a repealed Act) or anything duly done or suffered, thereunder ; or

(b) affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed Act, except the right or privilege accrued under that Act for availing of the facility of industrial concession by way of exemption from or deferment of payment of tax by registered dealers who had established new industrial units in the State of Madhya Pradesh or undertaken expansion, modernisation or diversification in such industrial unit or exemption from payment of tax by registered dealers who had established hotel under the New Tourism Policy, 1995 or the Heritage Tourism Policy of the Government of Madhya Pradesh ; or . . .

25. In view of the aforesaid, we are of the considered opinion, that the directions issued by the BIFR and affirmed by the AAIFR are in consonance with the original scheme which was accepted by the State Government as a consenting party and, therefore, any deviancy thereof is neither just nor proper. When the original scheme did not fix any financial limit, the same could not have been incorporated in the notification. Thus, the orders passed by the BIFR and AAIFR are just and proper and there is no warrant of interference.

26. Resultantly, the writ petition, being devoid of merit, stands dismissed. However, in the facts and circumstances of the case there shall be no order as to costs.