LexORISSA SPONGE IRON LTD. AND ANR. versus STATE OF ORISSA AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
ORISSA SPONGE IRON LTD. AND ANR.
A
v.
STATE OF ORISSA AND ORS.
DECEMBE~ 9, 1997
[S.C. SEN AND M. JAGANNADHA RAO, JJ.)
B
01issa State Industlial Policy Resolution, 1989: Para 2. 18 .
. Sales Tfil-Defennent/Exemption-Old and new industlial unit~Dis
climination between-1989 Policy and Notification dated 16.8.1990 extended C
benefit of defennent/exemption of sales tax to industlial units which had gone
into production after 1.4.1986 and denied the same to units which went into
production earlie1-Held: Such di.mimination between old and new units is
based on good and valid reasons and not hit by A1t. 14-0lissa Sales Tax,
·Act, 1947, S. 7-0iissa State lndustlial Policy, 198(}-{)iissa State Indust1ial D
Policy, 1986--0rissa State Govemment Notification SRO 790 of 1990
(Finance) dated 16.8.1990-Constitution of India, 1950-Ait. 14. ·
Sales Tm.-Defennent/Exemption-Cut-off date-Validity of-Benefit
of defe1111ent/exemption extended to those continuing units of 1980 which had
gone into production after 1.4.1986--Held, fv:ing of cut-off date not bad as E
the 1989 policy was a new policy and not a continuation of the 1980
policy-01issa Sales Tax Loan Scheme Rules, 1980.
Sales Ta.x-Defennent/Exemption-Para 2.18--Use of words "after
1.4.1986''-Held: Cannot be presumed to be a mistake ·by the draftsman.
Constitutio11 of India, 1950: A1ticle 142.
Relief-Indust1ial unit seeking benefit of 01issa State I11dust1ial Policy
Resolution, 1989-Such indusuial u11it had no case 011 merits-{]11der the
circumstances, relief u11der A1t. 142 refused.
The appellant-Company availed of the incentive of interest-free loan
for sales tax paid under the Orissa State Industrial Policy, 1980 when it
'
went into commercial production with effect from 1.4.19~4.- The State
F
G
Governmen.t introduced a new policy w.e.f. 1.4.1986, which provided for
deferment/exemption from sales tax but the benefit thereof could not be H
299
300
SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.
A availed of by the continuing units of 1980 whether they had gone into
production before or after 1.4.1986. However, in the Industrial Policy
Resolution of 1989, the units of 1980 policy, which went into production
after 1.4.1986, were granted benefit of deferment/exemption of sales tax.
Being aggrieved the appellant filed a writ petition before the High Court
B contending that the definition of 'continuing units of 1980' in para 2.18 of
the 1989 policy was violative of Article 14 of the Constitution. Hence this
appeal.
On behalf of the appellants it was contended that the words in para
C 2.18 of the 1989 policy "after 1.4.1986" must be a drafting mistake; that the
cut-off date of 1.4.1986 must be declared as bad because the 1989 scheme
could not be treated as a new scheme, but was a continuation of the 1980
scheme; that the classification of units into two groups, those which went
into production before 1.4.1986 and those which went into production after
1.4.1986 was violative of Article 14 of the Constitution; and that since tlie
D appellant was the only unit before this Court, this Court should grant
relief under Article 142 of the Constitution.
E
F
Dismissing the appeal, this Court
HELD : 1.1. The deferment/exemption Notification dated 16.8.1990
under Section 7 of the Orissa Sales. Tax Act, 1947 classifies the medium
and large-scale units of the Orissa State Industrial Policy Resolution, 1989
(entitled to deferment) into three types of which the category at Serial No.
3 thereof is relevant in this case. Under the Orissa State Industrial Policy,
1980, where units have made investments after 1.8.1980, there could be
three types of units firstly, those which made investment after 1.8.1980 but
which, like the appellant, went into production before 1.4.1986 : secondly,
those units which made investments after 1.8.1980 and before 1.4.1986 but
had gone into production after 1.4.1986 and before 1.12.1989; thirdly, those
G units which made investments after 1.8.1980 and before 1.4.1986 but which
had gone into production after 1.12.1~89. Now, out of these three types,
only the second and third, were made eligible to take benefits of column 3
of Serial No. 3 and not the fim type. Units of type two and three alone were
permitted to surrender benefits of 1980 policy and come under the 1989
H policy as per para 7.3.2 of the 1989 policy. [311-B-C; 312-C-F]
ORISSA SPONGE IRON LTD. v. STATE
301
i.2. The 1989 policy extended the beExcerpt shown. Read the full judgment & AI analysis in Lexace.