Hotline Glass Ltd. vs State of M.P.

Heard counsel for the parties.

By this petition filed under Article 226 of the Constitution of India, the petitioner seeks to challenge the decision of the State Level Committee of Economic Affairs dated 15.2.2010 and the consequential order/communication dated 19.3.2010 issued by the respondent no. 2. Instead, the petitioner seeks direction against the respondents to grant certificate of eligibility for exemption from payment of tax to the petitioner within a period of one month relying with the provisions of notification dated 16th October, 1987 and 19.2.1991. The petitioner has also challenged the assessment order dated 31.3.2009 (Annexure P/13).

The principal grievance revolves around the 1986 Exemption Scheme, in particular, para 2, Clause (vi) (a). The same reads thus:

(vi) (a) The dealer shall keep the industrial unit running during the period of exemption and also for a period of five years from the date of expiry of the period of exemption. If however, the dealer closes down the industrial unit during the period of exemption and restarts production in such unit subsequently after its revival and if the dealer proves to the satisfaction of the authority competent to decide the eligibility for exemption under this notification that the industrial unit had to be closed down for that period for reasons beyond his control, the dealer shall be eligible for exemption for a further period equal to the period during which the industrial unit remained closed, commencing immediately after the expiry of the period of eligibility or from the date of restarting production in the unit after its revival, whichever is later.

{Explanation-The expression "for reasons beyond his control" means the reasons which shall be decided by the State Level Committee according to the merits of each case}

(emphasis supplied)

Going by the stand taken by the petitioner, it is obvious that the concerned Industrial Unit of the petitioner has been closed at least since February, 2007. In view of this indisputable fact the question is whether the petitioner would be entitled for the relief as claimed?

On plain reading of the relevant clause of the scheme reproduced hitherto, it envisages that the Industrial Unit must be running during the period of exemption. Even if, the claim of the petitioner that the Unit was completely closed between 1.3.2001 till 11.12.2001 and again between 1.2.2005 till 30.11.2005 was to be accepted, the petitioner may not succeed in getting any relief. Inasmuch as, the said provision further requires that the Industrial Unit must continue to operate for a period of five years from the date of expiry of period of exemption. Admittedly, the period of exemption in the present case was only till 30.11.2005. In that sense, the petitioner Industrial Unit was required to remain functional and engaged in production up to November, 2010. Whereas, the concerned Industrial Unit, even according to the petitioner, is completely closed down since February, 2007. As a matter of fact the Divisional Deputy Commissioner, Commercial Tax Gwalior in his report dated 3.2.2010 has noticed that even during the period 1.3.2001 to 11.12.2001 and 1.2.2005 to 30.11.2005 the petitioner had sold semi-furnished products valuing Rs. 41,93,17,968/- and Rs. 42,00,42,050/- respectively. The petitioner asserted that the semi furnished products were produced with the help of another unit of the petitioner. The fact remains that it is indisputable that the concerned Industrial Unit of the petitioner has been completely closed from February, 2007 which is before the required period of five years from the date of expiry of the period of exemption. If that is the basis on which the authority has denied the relief to the petitioner of extending the exemption period for the stated period between 1.3.2001 till 11.12.2001 and again between 1.2.2005 till 30.11.2005 no fault can be found with that decision. All these aspects have been duly considered by the State Level Committee. It is not possible for this Court to sit over the finding of fact rendered by the Committee on the factum of closure of the Company or the Company was engaged in production during the relevant time, as the case may be.

No interference is warranted. The writ petition is accordingly, dismissed.