STATE OF JHARKHAND Vs. TATA IRON AND STEEL CO. LTD.
LAWS(SC)-2006-7-142
SUPREME COURT OF INDIA
Decided on July 25,2006

STATE OF JHARKHAND Appellant
VERSUS
TATA IRON AND STEEL CO. LTD. Respondents

JUDGEMENT

- (1.)This order shall dispose of Civil Appeal No. 6982 of 2005 and Civil Appeal No. 6983 of 2005. The facts giving rise to these appeals are taken from the case of Tata Iron & Steel Co. Ltd. v. State of Jharkhand & Others, 2004 7 SCC 242 between the parties pertaining to same dispute.
(2.)Tata Iron & Steel Co. Ltd., the respondent herein, had established a manufacturing unit for production of HRP, rounds, structurals and other iron and steel products in Dhanbad which was then in the erstwhile State of Bihar. The State of Bihar in the year 1995 evolved a new industrial policy with a view to create an environment conducive to growth of industries in the State and to utilise its optimum advantage all the resources available in the form of surface and groundwater, fertile land, mineral wealth, disciplined and skilled manpower, etc. By the said policy the Government tried to attract investors from various parts of the country to invest in identified thrust areas, as also for creation of essential infrastructure including private generation. One of the areas which the said industrial policy sought to develop was the field of metallurgical industries. As an incentive to attract investment in the State among others, the said policy provided for sales tax incentives which included exemption for new units in Category 'B' districts, 8 years' sales tax exemption on sale and purchase of materials from the date of commencement of production by such units located in Category 'B' districts. In pursuance of the said policy, necessary exemption notifications under Section 7 of the Bihar Finance Act, 1981 (hereinafter referred to as 'the Act') were also issued.
(3.)The respondent having noticed the incentives offered by the State Government, by letter dated 30.4.1997 intimated the then Chief Minister of the State that it has a plan for installing a cold-rolling mill in Jamshedpur in which a sum of Rs. 2000 crores was to be invested if the financial climate in the State was favourable. Therefore, before taking a final decision in this regard, it sought a confirmation from the State of Bihar as to its commitment to grant sales tax exemption as stated above. By that letter the respondent also requested the Chief Minister to authorise the Secretary to the Department of Industries and other officials of the State to have a discussion with the respondent about the plan in detail and to guide the respondent in the manner in which it could enjoy the benefits of sales tax incentives.


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