Augustan Textile Colours Limited Vs Director of Industries and Anr. (Supreme Court of India)
Facts-The issue to be considered here is whether the benefit of tax exemption in respect of works contract granted in the process of revival of the industry, under the relevant provisions of the Sick Industrial Companies Act, 1985 based on the Kerala Government communication dated 20.3.2004 (Ext. P-2) can be withdrawn, by the subsequent government order dated 21.11.2006 (Ext. P-3).
Conclusion- Exemption of sales tax is contemplated for a period of two years. However, it further provides that it cannot be for more than five years or beyond the date the net worth of the company becomes positive whichever is earlier. Therefore, the maximum period in any case is 5 years. In the case of the appellant, the appellant enjoyed the benefit of the exemption till it was withdrawn on 21.11 2006. The said order in turn was withdrawn on 01.10.2007. It is no doubt true that on 29.02.2008, the order dated 01.10.2007 came to be withdrawn. The writ petition was filed by the appellant. It would appear that for a period of nearly 4 years, the appellant enjoyed the benefit of exemption in all.
It is obvious that it could not be an unending bonanza even after the company breaks even and even made profits.
