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SCA/2069/2004 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 2069 of 2004
==========================================
POWER
BUILD LTD. & 1 - Petitioner(s)
Versus
STATE
OF GUJARAT & 2 - Respondent(s)
=========================================
Appearance :
M/S
WADIA GHANDY &CO for Petitioner(s) :
1,UNSERVED-EXPIRED (N) for Petitioner(s) : 2,PARTY-IN-PERSON for
Petitioner(s) : 2,
GOVERNMENT PLEADER for Respondent(s) : 1 -
3.
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CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 07/08/2008
ORAL
ORDER
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
This
petition has been preferred challenging the action of the
respondent authorities of demanding and recovering tax on the basis
of the certificates issued by the Sales Tax Department on 27.6.1996
being cancelled in the following circumstances :
In
1993, respondent ? State of Gujarat announced the scheme titled
?SIncentive Scheme for Wind Power Generation 1993?? for extending
sales tax incentives to industrial undertakings who would set up
wind farms in the State of Gujarat so as to curb the gap between
demand and supply of power in the State
Pursuant
to the said Scheme, the petitioner installed two windmills in two
lots at Lambha, District Jamnagar and the eligible investment was
computed at Rs.82,66,406 for the first lot and Rs.1,26,97,948/- for
the second lot. On 27.6.1997, the Sales Tax Department issued
Exemption Certificate granting benefit of sales tax deferment to the
tune of Rs.41,33,203/- for the first lot and Rs.63,48,974/- for the
second lot. The first certificate was effective from 30.3.1994 and
the second certificate was effective from 30.3.1995. The period of
benefit was available for a span of six years i.e. commencing from
30.3.1994 and ending 29.3.2000 for the first lot and commencing from
30.3.1995 and ending on 29.3.2001 for the second lot.
On
9th June 1998, a cyclone hit the coastal regions of the
State, more particularly districts of Porbandar and Jamnagar
resulting in wide spread damage. The windmills installed by the
petitioner company were uprooted resulting in stoppage of production
of power. One of the conditions of the Scheme was Condition No.7(b)
which reads as under:
?S(b)
The Industrial unit will remain in production continuously during
the eligible period.??
Obviously,
as the petitioner could not remain in production continuously during
the eligible period, the respondent authority issued notices
proposing to recover the amount availed of by the petitioner as
sales tax benefit under the said Scheme with interest. Such notices
were issued on 15.12.2003, 24.12.2003 and 19.1.2004. The petitioner
tendered a detailed explanation on 13.9.2000, followed by letters
dated 22.12.2003 and 3.1.2004 pointing out that the demand was
unjustified in the facts and circumstances of the case.
It
is the case of the petitioners that despite the aforesaid position,
vide order dated 31.1.2004 the respondent Sales Tax authority has
held that the petitioners have committed breach of the condition
No.7 (b) of the Scheme of running the windmill for a continuous
period of six years from the date of commissioning. In the present
case, the windmills have not been recommissioned.
Heard
the learned Advocate for the petitioners and the learned Assistant
Government Pleader on behalf of the respondents.
It
is an admitted position that the controversy involved in the present
petition has been decided by a judgement and order of even date made
in the case of Elecon Engineering Company Ltd. and another v.
State of Gujarat and others, rendered in Special Civil
Application No.2067 of 2004.
The
facts of the present case are therefore, required to be examined in
the light of the principles laid down in the aforesaid decision. It
is an admitted position as noted hereinabove, that the petitioner
herein has not recommissioned its windmills. In the circumstances,
as held in paragraph 9 of the said decision, the petitioner shall be
liable to discharge its liability for the period prior to the date
of the cyclone for which the original scheme provides for in
accordance with other terms of the Scheme. In other words, the
respondents shall not be entitled to effect any recovery on the
ground of breach of condition of continuous operation of period of
six years but such bar shall not apply to the petitioner as regards
discharging its liability, which it is otherwise liable to
discharge, qua the benefit availed of in accordance with the other
terms of the scheme.
The
petition is accordingly, allowed. Rule is made absolute to the
aforesaid extent with no order as to costs.
[D.A.MEHTA,
J.]
[HARSHA
DEVANI, J.]
parmar*
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