(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petitioner is a proprietary concern and is engaged in industrial activity of running a quarry unit presently located at Village Tharodi in Taluka Savarkundla. The petitioner has challenged an order dated 10.4.2006, as at Annexure “D” to the petition, passed by the respondent No.2 – Industries Commissioner, Gandhinagar.
2. The petition arises in following factual background. The State Government had framed Sales Tax Incentive Scheme under a resolution dated 16.10.1990. Under such scheme, eligible units specified under the scheme which set up industrial unit in specified backward areas were given sales tax incentive upon a certain percentage of the capital investment. Such incentive was optional in the form either of a sales tax deferment or a sales tax exemption option.
2.1 The petitioner set up an industrial unit in a backward area specified in the said scheme in the year 1994. Such quarry unit was located in Village Katar in Taluka Rajula, District Amreli. The petitioner was, thus, eligible for sales tax exemption as per the petitioner's option in terms of the said sales tax incentive scheme of the State Government.
2.2 It appears that after running the said quarry unit for a period of about two and half years, the petitioner faced multiple problems at its location at Village Katar. The case of the petitioner is that on account of poor quality and insufficient quantity of black-trap in the river bed and also on account of water logging in the rainy season, the petitioner could not operate such industrial unit beyond January 1997. The petitioner, therefore, was compelled to shift the unit from Village Katar to Village Dhareshwar. Such unit, however, could not be made functional on account of resistance of the local residents. The petitioner, therefore, had to once again shift the unit to its present location at Village Tharodi, Taluka Savarkundla. Such re-location of the petitioner's quarry unit took place sometime in May, 1999.
2.3 On account of considerable period of gap in production activity in the petitioner's quarry unit and also on account of such unilateral shifting of the unit itself, the State authorities were not inclined to continue the sales tax exemption, as also the consequential subsidy granted to the petitioner previously.
2.4 At one stage, the issues reached this Court. By an order dated 18.11.2000 passed in Special Civil Application No.9421 of 1997, the respondents were directed to grant the exemption benefit to the petitioner till December 1996.
2.5 The petitioner continued the efforts for getting the period of break in production regularized, as also to convince the Government to grant exemption despite shift in the location of the unit. By an order dated 10.2.2003, the Government communicated to the Industries Commissioner that the petitioner's request for condonation of the break period and to continue grant of sales tax exemption was not in consonance with the Rules. This decision of the Government was conveyed to the petitioner under a communication dated 28.2.2003. The petitioner thereupon approached this Court by filing Special Civil Application No.7849 of 2003 challenging the impugned communication dated 28.3.2003.
2.6 Such petition came to be disposed of by a Division Bench of this Court vide judgement dated 18.10.2005. In the said judgement, the Division Bench touched on two aspects of the matter. One was with respect to Government's refusal to condone the break period. The second was regarding petitioner's action of shifting the location of the quarry unit.
2.7 With respect to the first aspect, the Court noted that the decision of the Government was without hearing the petitioner and was also a non-speaking order. The Court was of the opinion that the Government could not have turned down the request for condonation of the break without hearing, by a non- speaking order. The Court was of the opinion that due to reasons beyond the petitioner's control, if the production could not continue, the same may fall in the category of vis major. Be that as it may, the Court after striking down the order dated 28.2.2003, directed the respondents to give proper opportunity to the petitioner of hearing and pass necessary speaking/reasoned order on the representation of the petitioner.
2.8 With respect to the second aspect of the matter, namely, of shifting of the unit, the Court observed that, “It is not in dispute before us that shifting from one place to another is permissible under the Rules provided the shifting is within the area to which the exemption notification/schemes are applicable.”.
2.9 When, thus, the matter was placed back before the State authorities for fresh consideration and disposal through a speaking order after hearing the petitioner, the present impugned order dated 10.4.2006 came to be passed. In such order, the authorities have once again rejected the petitioner's request for grant of exemption benefits.
3. Having, thus, heard the learned counsel for the parties and having perused the documents on record, we notice that in the impugned order, the authorities have given two reasons for rejecting the petitioner's request. One is that the petitioner's request for condonation of break in production was rejected by the Government. Though in the order itself there is no reference to any specific Government order, it is an undisputed position that reference is to the Government's order dated 10.2.2003 which was communicated to the petitioner under communication dated 28.2.2003 which came to be struck down by the High Court.
4. Second ground pressed in service is that the Committee is not inclined to interfere with the Government's above noted order and further that there is no provision in the scheme for permitting shifting of the industry from one place to another.
5. In our opinion, both the grounds are unsustainable. In the impugned order, the authority has relied upon the order of the Government which came to be struck down by the High Court as being non-reasoned order passed without hearing the petitioner. It was precisely because of these reasons that the matter was placed back before the authority for fresh consideration and disposal of the request of the petitioner after granting hearing to the petitioner and assigning reasons.
Surely, such order which was already struck down and for which purpose the entire proceedings were placed back at the doorsteps of the authorities, could not form a basis for rejecting the petitioner's request once all over again. In fact, the authority has observed in the impugned order that it is not inclined to interfere with such government order. We find that there is total non-application of mind. There was no question of any interference by the authority in such government order. Such order was struck down and was no longer valid. The High Court desired that the authorities should grant hearing to the petitioner and pass a fresh order. It is travesty of justice that the authorities pressed in service the same order which was quashed by the High Court for rejecting the petitioner's request.
6. The other reason that there is no provision in the scheme to permit shifting of the unit, also cannot be a ground for rejecting the petitioner's request. Firstly, there is no bar in the scheme permitting such shifting of an industrial unit. Secondly, as already noted, this Court had in the previous round of litigation held and observed that undisputedly such shifting was permissible. Without requesting the Court to recall such observations, insofar as the same parties are concerned, the Government could not adopt a different stand. Thirdly, it is not in dispute that the new location of the industry also is covered under the same scheme. Fourthly, it is the case of the petitioner and with respect to which, no serious dispute has been raised that such industry is still functional and continues to operate at the same location.
7. Under the circumstances, we are of the opinion that the impugned order dated 10.4.2006 is required to be set aside. The issues are required to be placed back before the authorities for a fresh consideration and disposal in accordance with law. We would like to stress the need to peruse our order more carefully before the authority proceeds to do so again. In this judgement as well as in this Court's earlier judgement dated 18.10.2005 passed in Special Civil Application No.7849 of 2003, certain observations have been made. Such observations cannot be ignored by the authorities while disposing of the petitioner's request afresh, as is being directed.
8. Under the circumstances, while setting aside the order dated 10.4.2006, we direct the respondent No.2 to take a fresh decision with respect to the petitioner's request for condonation of period of break in the production of the industrial unit concerned and also to grant sales tax exemption in terms of the scheme despite shifting of the location of the industrial unit. We make it clear that with respect to the merits of such request, we have expressed no opinion. Such exercise shall be completed as early as possible, preferably within four months from the date of receipt of copy of this judgement. The petition is disposed of accordingly. Rule is made absolute to the aforesaid extent. There shall be no order as to costs.
[AKIL KURESHI, J.] [HARSHA DEVANI, J.] parmar*