- (1.) The petitioner has approached this court praying for the following reliefs: (a) An appropriate writ in the nature of certiorari to quash and set aside the order passed by the Haryana Sales Tax Tribunal dated May 24, 2005 in S. T. A. No. 847 of 2003-04 and S. T. A. No. 26 of 2004-05 and remand the matter back to the Tribunal for a fresh hearing: (b) In the alternative, declare that the Sales Tax Department cannot withdraw the benefits of the sales tax exemption enjoyed by the petitioner for its unit II up to April 11, 2000 : (sic)
(2.) The facts stated in the petition are that the petitioner is a proprietorship concern engaged in manufacturing of yarn since 1970. The petitioner set up another unit called Unit II in 1993. For the investment made in Unit II, the petitioner was granted exemption from payment of tax under the provisions of the Haryana General Sales Tax Act, 1973 (for short, "the Act") read with Haryana General Sales Tax Rules, 1975 (for short, "the Rules") with effect from April 12,1993 to April 11, 2000. In the year 1995, the petitioner carried out expansion in Unit II by creating additional capacity for manufacturing of the same product (hereinafter referred to as "the expanded unit"). The expanded unit was also granted exemption from payment of tax for the period January 17,1996 to January 16, 2003 in terms of the provisions of the Act and the Rules. The petitioner availed of the entire benefit admissible to him for Unit II up to April 11, 2000. In terms of provisions of Sub-rule (11) of Rule 28-A of the Rules, a unit, after availing the benefit of exemption from payment of tax, is required to continue in production for at least five years thereafter with the same average level of production. The above referred Sub-rule extracted below : Rule 28A... (11) (a) The benefit of tax exemption/deferment under this rule shall be subject to the condition that the beneficiary/industrial unit after having availed of the benefit,-- (i) shall continue its production at least for the next five years not below the level of average production for the preceding five years ; and (ii) shall not make sales outside the State for next five years by way of transfer of consignment of goods manufactured by it. (b) In case the unit violates any of the conditions laid down in Clause (a), it shall be liable to make, in addition to the full amount of tax benefit availed of by it during the period of exemption/deferment, payment of interest chargeable under the Act as if no tax exemption/deferment was ever available to it: Provided that the provisions of this clause shall not come into play if the loss in production is explained to the satisfaction of the Deputy Excise and Taxation Commissioner concerned as being due to the reasons beyond the control of the unit: Provided further that a unit shall not be called upon to pay any sum under this clause without having been given reasonable opportunity of being heard.
(3.) The controversy in the present case arose in 2001 when, because of fire in the factory of the petitioner, unit II was substantially destroyed, with the result the production in that unit was not possible any further. The petitioner accordingly made an insurance claim with the insurance company, which, though was sanctioned and granted to the petitioner but not to the extent the loss was there. Further, the case of the petitioner is that since the insurance claim was granted in two installments and secondly it was not sufficient to restart unit II, which was destroyed in the fire, the petitioner invested the amount received from insurance claim in the expanded unit, with the result the production thereof was increased substantially. The quantum of production in the expanded unit after the period of exemption was over was to such an extent that it was able to comply with the condition of minimum level of production for the expanded unit as well as for the original unit II. To show that the petitioner has placed on record a chart of production of Unit II (original), Unit II (expansion) and also turnover of Unit II (expansion) after the period of exemption was over. The same is extracted below: Average Production Requirement Chart SON/IV/6540 Average Turnover Total average of Year Amount Unit No.2 required per year Year both Units in lacs 1995-96 1000.16 1996-97 703.42 1997-98 597.86 1998-99 307.61 1999-00 451.53 3060.58 612.12 SON/IV/7412 Year Amount Unit No. 2 Average turnover in lacs (1st Exp.) required per year 1997-98 167.94 1998-99 494.78 1999-00 574.02 2000-01 1139.77 2001-02 999.44 3370.95 674.19 1286.31 2002-03 1467.07 2003-04 1643.94 2004-05 1724.83 2005-06 1318.67 (up to 31-12-05)6154.51 1641.20 1641.20 ;