- (1.) M/S. Tata Steel Limited, the 1st respondent herein, had established a manufacturing unit for production of HRP, rounds, structural and other iron and steel products in Dhanbad situated in erstwhile Bihar. The State of Bihar had on 22.12.1995 formulated an industrial policy for tax exemption and/or deferment to such industrial units which started production between 01.09.1995 and 31.08.2000. The said policy was issued in exercise of power conferred by Section 23A of the Bihar Finance Act, 1981 (for short, "the 1981 Act") and the purpose of framing the policy was industrial growth of the State. The policy stipulated that such industrial units should have the registration certificate indicating that the unit was eligible to have the benefits of the policy. The policy was issued with a view to create an atmosphere conducive for growth of industries and optimum utilisation of the natural resources available in the designated/stipulated area. As is evident, by the said policy, the Government intended to attract investors from various parts of the country to invest in the identified areas. The major incentive under the policy, apart from others, included eight years sales tax exemption on sale and purchase of material from the date of commencement of production as stipulated in the policy. Keeping in view the purpose incorporated in the policy, exemption notification under the 1981 Act was issued. The appellant expressed its willingness to install a cold rolling mill in Jamshedpur by investing Rs. 2000 crores. After a final decision was taken upon due deliberation, the 1st respondent sought a confirmation from the State of Bihar to assure the commitment to grant sales tax exemption as stated in the policy as an incentive. Number of meetings took place between the authorities of the State of Bihar and the 1st respondent and in pursuance of the discussion, certain amendments in the policy took place, as a consequence of which a communication was made to the 1st respondent for setting up a cold rolling mill with production capacity of 1.02 million tonnes requiring investment of Rs. 1874.04 crores on the project. Regard being had to the discussion and the communication, the 1st respondent invested nearly Rs. 2000 crores on its own and the commercial production commenced from 01.08.2000.
(2.) When the matter stood thus, the Bihar Reorganisation Act, 2000 came into existence on 15.11.2000 as a result of which Jamshedpur became part of a newly carved out State, namely, Jharkhand. After coming into force of the new State, on 15.12.2000, the Governor of Jharkhand by notification ordered that the 1981 Act, the Central Sales Tax (Bihar) Rules, 1956 and the notifications made thereunder, etc. amongst other Acts, Rules and Regulations, shall be deemed to be in force in the entire State of Jharkhand w.e.f. 15.11.2000. On 21.12.2000, the successor State issued an exemption certificate as contemplated in earlier notification issued by the Bihar State Finance and Commercial Taxes Department exempting the new units which also included the unit established by the 1st respondent, from the purchase tax as well as the sales tax on purchase and sales made in regard to the cold rolling mill. Be it stated that the said certificate was issued after holding proper enquiry by the concerned Joint Commissioner. After due enquiry, he had opined that though the raw materials for the manufacture of CR product is HR product, the CR product is totally different, both in its metallurgical components and the end-use, and the two products were commercially recognised as different products. Hence, the cold-rolled products manufactured by the new unit being different from the hot-rolled product manufactured by the old unit, the appellants were entitled to exemption of sales tax as provided under the industrial policy. On that score, he had approved issuance of the certificate. However, the Commissioner of Commercial Taxes, Jharkhand initiated a suo motu revision under Section 46(4) of the 1981 Act and placing reliance on Telangana Steel Industries v. State of A.P., 1994 Supp2 SCC 259 held that the two products must be treated as the same commodity and the products not being different commodities, the benefit of exemption was not available.
(3.) Being aggrieved by the order passed by the Commissioner, the 1st respondent filed a writ petition before the High Court of Jharkhand which ultimately remanded the matter to the competent authority to examine whether HR product and CR product manufactured by the two units of the company are one and the same or two different products.;