Gangotri Iron and Steel Co. Ltd. Vs The State of Bihar (Patna High Court)
Facts-
The petitioner is engaged in the business of manufacturing M. S. Billets TMT Steel Bars and Industrial Oxygen Gas. The petitioner stated that the respondent (State of Bihar) had announced Industrial Incentive Policy 2006. The petitioner stated that policy provides for reimbursement of VAT and entry tax to the new MSME/ large industries.
The petitioner argued that the amount deposited by way of entry tax, forms an integral part of the amount of Admitted VAT. Further, clause 2(vi) of the Industrial Incentive Policy specifically provides for reimbursement of amount of Admitted VAT, which by way of definition includes the amount of entry tax as well.
Conclusion-
The form of return, under the Bihar VAT, bearing Form RT-III clearly depicts that the amount deposited by an assessee by way of Entry Tax forms an integral part of amount of admitted VAT of the assessee. Hence the two cannot be separated, thus, the subsidy/ incentive under clause 2(vi) of the Industrial Incentive Policy shall also cover subsidy on entry tax.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The present writ petition has been filed for directing the State Government to take a decision with regard to grant of reimbursement equal to the amount of taxes deposited by the petitioner by way of subsidy in terms of the Industrial Incentive Policy, 2006 and immediately transfer the funds on the head of subsidy towards admitted tax paid on account of Bihar VAT Act, Bihar Entry Tax Act as also the Central Sales Tax Act to the Sales Tax Department, in order to enable it to disburse the amount of such subsidy to the petitioner herein.
The brief facts of the case according to the petitioner is that it is engaged in the business of manufacturing M.S. Billets TMT Steel Bars & Industrial Oxygen Gas. The petitioner is stated to have commenced commercial production at Bihta Unit with effect from 11.01.2009, as per the certificate issued by the Director, Technical Department, Bihar, Patna vide letter dated 22.10.2009. It is the further case of the petitioner that the respondent State of Bihar had announced Industrial Policy, 2006 wherein various incentives were promised for the purposes of attracting investment in the State of Bihar. The said Industrial Incentive Policy, 2006 was published in the official gazette of the State Government on 25.07.2006.
The learned senior counsel appearing for the petitioner has drawn the attention of this Court to the relevant clauses of the Industrial Incentive Policy, 2006, which are reproduced herein below:-
2. POST-PRODUCTION INCENTIVES
“(vi) subsidy/Incentive on VAT:
This facility will be available to small / large / medium industries. The industrial unit will get a passbook from the State Government in which the details of the tax paid under Bihar VAT would be entered and verified by the commercial Taxes Department in the form prescribed in Appendix-III.
The Director, Industries will be authorised to pay the incentive amount on the basis of the verification.
The new Units will avail 80% reimbursement against the admitted VAT amount deposited in the account of the Government, for a period of ten years. The maximum subsidy amount is payable 300% of the capital invested.
Clarification: The incentive would not be payable on the amounts imposed as penalty and the difference of amount between tax assessed and accepted under the Central Sales Tax/Bihar Value Added Tax Act, 2005 and Bihar Entry Tax Act.”
Annexure-I:- Relevant clauses thereof are reproduced herein below:-
“1. Effective date:“Effective date” means the date on which the provisions of this Policy come into force i.e. 01.04.2006. This Policy will remain in force for 5 years from the date of issue of orders.
4.New Industrial Unit:“New Industrial Unit” means an industrial unit in which commercial production has commenced within five years from 01.04.2006.
8. Expansion/Modernisation/Diversification:
“Expansion/Modernisation/Diversification of an existing unit” would mean additional fixed capital investment in plant and machinery to the extent of 50% or more of the undepreciated value of fixed capital investment in the existing unit leading to incremental production capacity which would not be less than 50% of the initial installed capacity. In order to qualify a unit undertaking expansion/ modernisation/diversification should send prior intimation to the General Manager, District Industries Centres or the Managing Director, Bihar Industrial Area Development Authorities & Deputy Commissioner Commercial Taxes, as the case may be in respect of Small Scale Industry or the Director of Industries/director, Technical Development and Commissioner, Commercial Taxes in case of medium and large industries before undertaking such expansion/ modernisation/diversification Programme. Such intimation should be accompanied by detailed expansion / modernisation / diversification proposal giving the specific period of proposed additional investment.”
Annexure-III
FORMAT OF PASSBOOK AS DETAILED IN PARA 2(VI) OF THE INDUSTRIAL INCENTIVE POLICY 2006.
