BALIA, J. - (1.) THIS revision is directed against the judgment dt. 24. 9. 98 passed by the Rajasthan Tax Board, Ajmer whereby the Tax Board, while allowing the appeal of M/s. Meera Stones Pvt. Ltd. for grant of `eligibility Certificate' under the Rajasthan Sales Tax Incentive Scheme 1987 as Diversification, has set aside the orders dt. 11. 6. 97 and 5. 12. 97 passed by the District Level Screening Committee.
(2.) THE respondent-assessee has established an industrial unit for manufacturing of Mormo Tiles in 1988 at Chittorgarh and for which he was issued `eligibility Certificate' as new industrial unit under the aforesaid scheme. On 23. 1. 97 when the said Unit installed Marble Gangsaa and from which started production of Marbles Slabs also used as building material albeit for different purposes he made an application under Clause 2 (g) of the scheme for grant of Eligibility Certificate on this diversification. Stating that he has spent more than 25% of the existing value of fixed assets of the original project. In the first instance the District Level Screening Committee rejected the application of the respondent-assessee by finding that it is not a diversification. THE respondent-assessee again submitted application for reconsideration, the application again was rejected on 5. 12. 97 by finding that the unit is not in production at that time. Against the rejection of the application for grant of Eligibility Certificate as diversification the respondent-assessee preferred an appeal before the Rajasthan Tax Board which held establishing Gangsaa for production of Marble-Tiles in addition to existing production of Mormo-Tiles by the applicant amounts to diversification and finding that he otherwise fulfills condition of grant of Eligibility Certificate namely investment or more than 25% of the fixed capital of the existing project allowed the appeal and directed the D. L. S. C. to issue Eligibility Certificate within two months subject to verification of additional fixed capital investment requisite for quantifying eligibility to incentive as diversification. It is against this order of the Tax Board the Commercial Taxes Officer is now before this Court. It has been urged by the learned counsel for the petitioner that definition of `diversification' means launching of new product line under the same company, firm or partnership and manufacture of Marble-Tiles cannot be said to be a `new product line' but is engaged in the same product line in which the applicant is already engaged and therefore the Board was not right in accepting the case of the respondent to be a case of diversification and the D. L. S. C. in its first meeting held on 11. 6. 97 was right in rejecting the application for diversification. However, it is not disputed that in the event, the respondent may be eligible for exemption as expansion unit for which he was free to make a separate and independent application. Mr. Kothari appearing for the respondent urged that new product line under Clause 2 (g) must necessary mean not the same production of which installed capacity is to be increased under expansion but start of production of another commodities of the similar nature which are already being manufactured by the existing project. Manufacturing altogether new product unconnected with the existing project would make it to be case of new industrial unit for greater advantage under the scheme. He places reliance on the decision of Gujrat High Court in Pranav Raj Paper Mills & Anr. vs. State of Gujrat (1 ). The State Government is consistently framing incentive schemes in giving a impetus to investment in industrial growth of the State in its backward areas, subject to conditions and policy laid in the scheme as envisaged from time to time. Presently we are concerned with the Investment Scheme of 1987. It will be apposite to refer to the relevant features which have bearing on the present controversy.
(3.) THE preface of the notification dt. 23. 5. 87 exempts industrial unit from payment of tax on the sales of goods manufactured by them in the manner and to the extent and for the purpose as covered by the notification. Under Clause 2 (a) of the scheme `new Industrial Unit' has been defined to mean industrial unit which commences commercial production during the operative period of the Incentive Scheme but does not include (1) a new unit established by transferring or shifting or dismantling an existing industry; and (2) an industrial unit on the basis of the existing unit manufacturing similar goods. `expansion' has been defined under Clause 2 (f) to mean increase in the value of fixed capital investment by not less than 25% of the net fixed assets of the existing project accompanied with an increase of production to the extent of at least 25% of the original licenced/registered capacity. The benefits of Sales Tax Incentives for Expansion shall be admissible to the eligible units only after they have achieved at least 85% of their licenced/registered capacity before expansion. `diversification' has been defined under Clause 2 (g) to mean launching of new product line under the said company, firm or partnership provided that the total fixed capital investment in such a diversification exceeds at lest 25% of the value of the net fixed assets of the original project. ;