Judgment :- P. SATHASIVAM, J. Aggrieved by the order of the first respondent dated November 8, 1996, the petitioner, Thiru Arooran Sugars Limited has filed the above writ petition for quashing the said order and also for direction directing the first respondent to issue an eligibility certificate to the new unit of the petitioner established at Tirumandankudi, Papanasam taluk, Thanjavur district under paragraph 3 of G. O. Ms. No. 500 dated May 14, 1990 by way of full waiver of sales tax for a period of five years as per their application dated November 19, 1991 on various grounds. 2. The case of the petitioner is briefly stated hereunder : The petitioners are a public limited company incorporated under the provisions of the Indian Companies Act, 1913. They are manufacturers of sugar, industrial alcohol besides being engaged in the generation of power. The petitioners have two sugar manufacturing units, old unit at Vadapathimangalam, Needamangalam taluk and new unit at Tirumandankudi, Papanasam taluk. In order to encourage investment in backward area and in order to correct the regional imbalances in the industrialisation of the State, the Government of Tamil Nadu issued G. O. Ms. No. 500 dated May 14, 1990. Paragraphs 2 and 3 of the Government Order offer different incentive schemes for new industries and expansion/diversification of the existing units, set up in the most backward taluk as against less backward taluk. In the annexure to the said Government Order, the list of most backward taluks has been notified. The petitioners have set up the new sugar mill at Tirumandankudi, Papanasam taluk, Thanjavur district, which is notified as coming under most backward taluk being mentioned as Sl. No. 14 under the head "Taluks" in Thanjavur district. The total investment on the fixed assets of this new unit was Rs. 3, 333.92 lakhs. 3. It is further stated that the petitioners made an application for the grant of eligibility certificate before the State Industries Promotion Corporation of Tamil Nadu Limited/first respondent herein by application dated November 19, 1991. After obtaining so many particulars from the petitioner, the first respondent by letter dated September 29, 1992, informed the petitioner stating that under the present scheme, the sugar mills are not eligible for the incentive on purchase tax. Thereupon, the petitioner filed Writ Petition No. 19395 of 1993 challenging the said order dated September 29, 1992 of the first respondent on various grounds. Thereupon, the petitioner filed Writ Petition No. 19395 of 1993 challenging the said order dated September 29, 1992 of the first respondent on various grounds. This Court by order dated August 7, 1992 was pleased to quash the order of the first respondent while further directing to consider the case of the petitioners that the sugar mill at Tirumandankudi is a new factory entitled to the benefits of G. O. Ms. No. 500 dated May 14, 1990 and in the light of the decision of a Division Bench of this Court in Sulochana Cotton Spinning Mills (P) Ltd. v. State of Tamil Nadu and pass orders after hearing the petitioner or their counsel. Pursuant to the orders of this Court dated August 7, 1996, the first respondent conducted an enquiry. The petitioners themselves placed a detailed letter with enclosures dated August 24, 1996. Inspite of the material particulars furnished by the petitioner, the first respondent has chosen to pass the impugned order dated November 8, 1996, rejecting the eligibility certificate. The said order is illegal, arbitrary and liable to be quashed. Aggrieved by the said order, the petitioner has once again approached this by way of the present writ petition. 4. The first respondent has filed a counter-affidavit disputing various averments made by the petitioner. It is stated that the petitioner is a company engaged in the manufacture of sugar, they have an existing unit to manufacture of sugar at Vadapathimangalam, Needamangalam taluk, Thanjavur district. Apart from the said existing unit, they have established another unit at Papanasam taluk which is the subject-matter in the writ petition. The petitioner herein applied for grant of eligibility certificate under the sales tax waiver/deferral scheme on November 19, 1991 in Application No. 6904 of 1991 in respect of the unit set up by them at Papanasam claiming the benefits of G. O. Ms. No. 500 dated May 14, 1990. The claim of the petitioner is that the unit established by them at Papanasam is a new unit only and so it is entitled for the benefits conferred under the said Government Order, since the said unit is situated as per the said Government Order in the most backward taluk. No. 500 dated May 14, 1990. The claim of the petitioner is that the unit established by them at Papanasam is a new unit only and so it is entitled for the benefits conferred under the said Government Order, since the said unit is situated as per the said Government Order in the most backward taluk. The respondent passed an order on September 29, 1992 stating that the request of the petitioner for sales tax waiver on the purchase tax cannot be conferred, since under the present scheme the sugar mills are not eligible for the waiver on purchase tax. The petitioner herein filed W. P. No. 19395 of 1993 before this Court to quash the communication dated September 29, 1992 by the respondent. This Court allowed the writ petition with a direction to the SIPCOT to consider the case of the petitioner in the light of the decision of a Division Bench of this Court in [Sulochana Cotton Spinning Mills (P) Ltd. v. State of Tamil Nadu]. As directed by the Division Bench of this Court, the first respondent conducted a personal enquiry on September 24, 1996, and after considering the various documents filed by the petitioner, passed an order on November 8, 1996 rejecting the claim of the petitioner on the ground that the petitioner-company is not a new industry and not eligible for waiver of purchase tax on raw materials under the abovesaid Government Order. The order of the first respondent is legal, just and proper. As per their application, the petitioner had started a new unit, but not a new company. It had the original project at Needamangalam taluk. It has set up another unit at Papanasam taluk and it is eligible for IFST deferral/waiver concession applicable for expansion. Inasmuch as the petitioner had not set up a new unit, accordingly not entitled to claim the benefits under the first limb of para 3 of G. O. Ms. No. 500 dated May 14, 1990. 5. In the light of the above pleadings, I have beard Mr. K. Parasaran, learned Senior Counsel for the petitioner, Mr. A. L. Somayaji, learned Senior Counsel for the first respondent and learned Advocate-General, for respondents Nos. 2 to 4. 6. Mr. No. 500 dated May 14, 1990. 5. In the light of the above pleadings, I have beard Mr. K. Parasaran, learned Senior Counsel for the petitioner, Mr. A. L. Somayaji, learned Senior Counsel for the first respondent and learned Advocate-General, for respondents Nos. 2 to 4. 6. Mr. K. Parasaran, learned Senior Counsel for the petitioner, after taking me through the Government Order No. 500 dated May 14, 1990, the earlier order of the Division Bench of this Court dated August 7, 1996, the impugned order of the first respondent dated November 8, 1996 as well as various earlier Government Orders on this aspect, has raised the following contentions : (i) In the light of the categorical finding of the order of the division Bench dated August 7, 1996 in W. P. No. 19395 of 1993, the impugned order of the first respondent cannot be sustained; (ii) In the light of the earlier proceedings as well as the conclusion of this Court passed on the claim of both parties, the present stand of the respondents is hit by the principle of res judicata; (iii) In the absence of any definition for "new industry", taking note of the object of the Government, namely, to set up new industries in most backward taluks, inasmuch as the petitioner had established a new industry in Papanasam taluk, which is one of the most backward taluks as notified, the first respondent ought to have issued eligibility certificate to the new unit of the petitioner under para 3 of the Government Order No. 500 dated May 14, 1990 by way of full waiver of sales tax for a period of five years as per their application dated November 19, 1991; and (iv) In spite of the materials, the first respondent after taking note of the irrelevant consideration, erroneously rejected the claim of the petitioner. 7. On the other hand, Mr. A. L. Somayaji, learned Senior Counsel for the first respondent and learned Advocate-General for respondents Nos. 2 to 4 have raised the following contentions : (i) Inasmuch as the petitioners' unit in Papanasam taluk is not a new industry and is only an another unit of the existing industry at Vadapathimangalam, the 'petitioner is not entitled to the benefit under G. O. Ms. 2 to 4 have raised the following contentions : (i) Inasmuch as the petitioners' unit in Papanasam taluk is not a new industry and is only an another unit of the existing industry at Vadapathimangalam, the 'petitioner is not entitled to the benefit under G. O. Ms. No. 500 dated May 14, 1990; accordingly the first respondent is justified in passing the impugned order rejecting the claim of the petitioner; (ii) Inasmuch as the benefit of the said Government Order is available only to new industries started by new entrepreneurs in the most backward taluks, the sugar unit of the petitioner at Papanasam taluk is an expansion of the old industry functioning at Vadapathimangalam is not entitled to the benefits of the said Government Order applicable to new industry. As the first respondent, after affording adequate opportunity to the petitioner as directed by the division Bench of this Court, passed a considered order on merits, there is no merit in the writ petition. 8. I have carefully considered the rival submissions. 9. In order to appreciate the rival submissions, we have to look into the relevant Government Order, namely, G. O. Ms. No. 500 dated May 14, 1990. Since the relief claimed is based only on the said Government Order, the same is extracted hereunder : GOVERNMENT OF TAMIL NADU Abstract Industries - Declaration of most backward taluks - Incentive schemes for industries - Interest-free sales tax scheme - Further liberalisation - Orders - Issued. Industries (MIG. II) Department G.O. Ms. No. 500 Dated 14-5-1990 Read : 1. G. O. Ms. No. 305, Industries, dated 22-5-1989. 2. G. O. Ms. No. 423, Industries, dated 7-7-1989. 3. G. O. Ms. No. 563, Industries, dated 19-8-1989. 4. G. O. Ms. No. 564, Industries, dated 19-8-1989. ORDER : The Government in the order second read above declared 105 taluks of the State as industrially backward for the purposes of grant of interest-free sales tax loan, interest-free sales tax deferral, State capital subsidy, etc. 2. With a view to correct regional imbalances in the industrialisation in the State by giving further incentives to more backward areas, the Government direct that 30 taluks from among the 105 industrially backward taluks be declared as industrially most backward taluks. The names of 30 taluks are annexed to this order. 3. 2. With a view to correct regional imbalances in the industrialisation in the State by giving further incentives to more backward areas, the Government direct that 30 taluks from among the 105 industrially backward taluks be declared as industrially most backward taluks. The names of 30 taluks are annexed to this order. 3. The Government direct that the new industries to be set up in the 30 most backward taluks covered in para 2 above and also in the three industrial complexes of State Industries Promotion Corporation of Tamil Nadu at Pudukottai, Cuddalore and Manamadurai be eligible apart from other existing concessions, for full waiver of sales tax dues for a period of five years up to a ceiling of the total investment made in fixed assets. Existing industries in the most backward taluks and in the three State Industries Promotion Corporation of Tamil Nadu (SIPCOT) complexes, undertaking expansion/diversification are also eligible for full waiver of sales tax dues for a period of five years subject to a ceiling of the total investment made in fixed assets under expansion/diversification. 4. With a view to encourage more industries in Tamil Nadu, the Government direct that the following concessions also be made available to the industries : (a) For the industries to be started in the 75 backward taluks, i.e., other than the 30 most backward taluks, from among the 105 backward taluks and in the industrial estates developed by any of the Government agencies including Madras export processing zone, Madras Metropolitan Development Authority, the scheme of interest-free sales tax loan/deferral ordered in the Government Order first, third and fourth read above is modified as follows :(i) For the existing units undertaking expansion or diversification, deferral of sales tax will be given for nine years and the total amount thus given shall not exceed 80 per cent. of the additional investment made in fixed assets. (ii) For the new units, the total amount of deferral of sales tax will be given for nine years to the full extent of the total investment made in fixed assets. (b) The interest-free sales tax deferred scheme is extended to the expansion (part I) as well as to the starting of new industries (part II) in the other areas also where this scheme was not in vogue hitherto. (b) The interest-free sales tax deferred scheme is extended to the expansion (part I) as well as to the starting of new industries (part II) in the other areas also where this scheme was not in vogue hitherto. The deferral of sales tax for the industries in these areas will he for five years subject to a minimum of 60 per cent. of the total investment made in fixed assets in the case of new industries and 50 per cent. of the additional investment in fixed assets made in the case of expansion/diversification of the existing industries. (c) As a gesture to the industries to be set up in any part of Tamil Nadu with an investment in fixed assets of more than Rs. 50 crores, a special incentive of deferral of sales tax for a period of 9 years to the extent of total investment made in fixed assets will be given. This deferral concession will also be available to the existing industries going in for expansion/diversification with an additional investment in fixed assets for more than Rs. 50 crores. 5. The sales tax deferral/waiver of expansion/diversification ordered in paras 3-4 above is subject to the sales tax payable on products manufactured by the capacity created by expansion/diversification units only. 6. The industries in the most backward taluks and in the SIPCOT complexes at Cuddalore, Manamadurai and Pudukottai can opt either for the full waiver of sales tax for a period of five years ordered in para 3 above or for the deferral of sales tax for nine years as applicable to the industries in the backward taluks ordered in para 4(a) above. The option should be exercised along with the application to be submitted to the authority for issuing eligibility certificate. The option once exercised and accepted will be final and cannot be changed. 7. The application for interest-free sales tax deferral should be filed before the General Manager, District Industries Centre concerned in the case of small-scale industries and before SIPCOT in the case of medium and major industries before the commencement of commercial production. 8. The above scheme will be applicable to small, medium and major industries as the case may be. The deferral/waiver period will commence from the date of commencement of commercial production after the completion of the envisaged project. 8. The above scheme will be applicable to small, medium and major industries as the case may be. The deferral/waiver period will commence from the date of commencement of commercial production after the completion of the envisaged project. Such commencement shall be on or after the date of issue of this order for eligible units. 9. The General Manager, District Industries Centre and SIPCOT will be the competent authorities to issue eligibility certificates in respect to small-scale industries and major and medium industries respectively. The respective sales tax assessing authority will assess the sales tax liability of the units for each year. The sales tax authorities concerned, based on the assessments, will raise demands for deferral of sales tax without interest or waiver of sales tax after commencement of production by the units. But the tax payable for the year will be deferred/waived within the overall ceiling for which the eligibility certificate is issued by the authority. The deferred instalments shall be payable by the assessee-units after the completion of the period of deferral together with the sales tax of the current year, without any interest thereon. In case the unit avails the complete deferral/waiver benefit before the completion of specified deferment period of 5 years or 9 years, as the case may be, the unit has to pay the normal sales tax immediately after the date of full availment of eligible deferral amount. The assessee of the unit for which the sales tax has been waived will start paying the current sales tax dues after the completion of the waiver period or immediately after the full availment of eligible waiver amount, whichever is earlier. However the deferred amount of sales tax for 5 years or 9 years as the case may be has to be paid after the completion of the deferral period along with the current dues, i.e., in the case of deferral of 9 years the amount deferred in the first year being payable along with the sales tax due in the 10th year, the amount deferred in the second year being payable along with sales tax due in the 11th year and so on. 10. All eligible units which have commenced production before the date of issue of this order will be eligible for interest-free sales tax loan/deferral as per the orders existing on the date of commencement of production. 10. All eligible units which have commenced production before the date of issue of this order will be eligible for interest-free sales tax loan/deferral as per the orders existing on the date of commencement of production. Units which have availed interest-free sales tax loan under existing schemes, may opt for the deferral facility to the extent of uncompleted period and unutilised amount of the earlier scheme. 11. The original project in a taluk may go in for expansion/diversification in the same taluk where the original project is located or in any other taluk and avail the interest-free sales tax deferral/waiver concession. However, this concession would be granted for one expansion/diversification only if carried out in the same taluk where the original project is located. 12. Second-hand machinery will not be part of the investment eligible for the computation of deferral or waiver of sales tax. 13. This order modifies all the previous orders available on the subject-matter or to the extent to which the scheme has been covered by this order. 14. This order issues with the concurrence of Commercial Taxes and Religious Endowment and Finance Department vide their U. O. No. 20626/B2/90-1 dated May 2, 1990 and U. O. No. 2674/FS/P/90 dated May 7, 1990, respectively. (By Order of the Governor) M. M. Rajendran Chief Secretary to Government." " Annexure To G.O. Ms. No. 500 dated May 14, 1990 (List of most backward taluks) Districts Taluks 1. ............ ........... 2. ............ ........... 11. Thanjavur 14. Papanasam 12. ........... ........... Paragraphs 2 and 3 of the above Government Order offer different incentive schemes for new industries and expansion/diversification of the existing unit set up in the most backward taluks. It is the case of the petitioners that they have set up a new sugar mill which is a new industry as per first limb of para 3 of the Government Order at Tirumandankudi, Papanasam taluk, Thanjavur district, which is notified as one of the most backward taluks (serial No. 14 under the head "Taluks" in Thanjavur district). It is the case of the petitioners that the total investment on the fixed assets of this new unit was Rs. 3, 333.92 lakhs. It is the case of the petitioners that the total investment on the fixed assets of this new unit was Rs. 3, 333.92 lakhs. In pursuance of the Government Order referred to above, the petitioners made an application for the grant of eligibility certificate before the State Industries Promotion Corporation of Tamil Nadu Limited, namely, the first respondent by their application dated November 19, 1991. It is also seen that as requested by the first respondent, the petitioner-company has furnished various details in order to claim the benefit of the G. O. Ms. No. 500 dated May 14, 1990. It is also seen that on receipt of the various information from the petitioner-company by letter dated September 29, 1992, the first respondent rejected the claim of the petitioner holding that under the present scheme, the sugar mills are not eligible for the incentive on purchase tax. Against the said order, the petitioner filed W. P. No. 19395 of 1993 before this Court. A perusal of the affidavit filed in support of the writ petition shows that after setting up a new industry in the most backward taluk, they prayed for full waiver and other concessions as per G. O. Ms. No. 500 dated May 14, 1990. It is also seen from the counter-affidavit filed in that writ petition by the first respondent that the petitioners were not entitled to the benefits of the said Government Order, since the new unit of the petitioners was no more than an expansion activity. In this regard, Mr. Parasaran, learned Senior Counsel for the petitioner has brought to my notice that in the light of the specific plea made by the petitioner and the averments in the counter-affidavit coupled with additional information furnished by the petitioners before the Division Bench, the Division Bench ultimately by order dated August 7, 1996 directed the first respondent/SIPCOT to consider the case of the petitioner that the sugar mills at Timmandankudi is a new industry, entitled to the benefits of G. O. Ms. No. 500 dated May 14, 1990 in the light of the decision of the division Bench reported in [Sulochana Cotton Spinning Mills (P) Ltd. v. State of Tamil Nadu] and pass orders after hearing the petitioners or its counsel. In this regard, Mr. No. 500 dated May 14, 1990 in the light of the decision of the division Bench reported in [Sulochana Cotton Spinning Mills (P) Ltd. v. State of Tamil Nadu] and pass orders after hearing the petitioners or its counsel. In this regard, Mr. Parasaran has very much relied on the conclusion arrived at by the division Bench in W. P. No. 19395 of 1993 dated August 7, 1996 which is as follows : "4. No doubt, in the counter-affidavit, the fourth respondent has taken a stand that the said mill is an expansion of the existing one and it is not a new one. Such a stand is not supported by any evidence. On the contrary, it is the specific case of the petitioner that it has placed several documents before the SIPCOT to prove that the petitioner-mill at Tirumandankudi is a new industry. 5. Under these circumstances, we are of the view that the decision of the SIPCOT in question cannot at all be sustained and the matter is required to be considered fresh, after taking into consideration the materials produced by the petitioner and also in the light of the decision of this Court, referred to above. 6. For the reasons aforestated, the writ petition is allowed. The communication dated September 29, 1992 bearing No. ID/ST/II. 92 is quashed and the matter is remitted to the SIPCOT, with a direction to consider the case of the petitioner that the sugar mill at Tirumandankudi is a new industry, entitled to the benefits of G. O. Ms. No. 500, dated May 14, 1990. In the light of the decision of a Division Bench of this Court in Sulochana Cotton Spinning Mills (P) Ltd. v. State of Tamil Nadu and pass orders after hearing the petitioner or its counsel. Further, the petitioner is entitled to produce such material as is necessary to prove its case. SIPCOT is directed to determine the issue within two months from today. No costs." It is true that in the light of the pleadings of both parties and in the absence of any discussion and conclusion by the first respondent, the Division Bench ultimately allowed the said writ petition and quashed the communication dated September 29, 1992 and remitted the matter to the first respondent for reconsideration. No costs." It is true that in the light of the pleadings of both parties and in the absence of any discussion and conclusion by the first respondent, the Division Bench ultimately allowed the said writ petition and quashed the communication dated September 29, 1992 and remitted the matter to the first respondent for reconsideration. Even though the stand taken by the first respondent in the counter-affidavit in that case has not been accepted by the Division Bench, that cannot be presumed that the case of the petitioner has been accepted by the Bench. However, it is clear that the first respondent was directed to consider the case of the petitioner that the sugar mill at Tirumandankudi is a new industry entitled to the benefits of G. O. Ms. No. 500 dated May 14, 1990 in the light of the earlier Division Bench decision in [Sulochana Cotton Spinning Mills (P) Ltd. v. State of Tamil Nadu] and pass appropriate orders after affording adequate opportunity. In such circumstance, I am unable to accept the argument of the learned Senior Counsel that the decision rendered by the Division Bench would operate as res judicata and could not be reopened by the first respondent. No doubt the learned Senior Counsel has very much relied on the following passage of their Lordships of the Supreme Court reported in Sobhag Singh v. Jai Singh: "....... All questions which had been expressly decided by the High Court on contest between the parties and other questions which must be deemed by necessary implication to have been decided were res judicata and could not be reopened before the Board of Revenue ......" As stated earlier, it is true that the stand of the first respondent in the earlier proceedings that the unit set up by the petitioner in Papanasam taluk is not a new industry has not been accepted by the division Bench in the said decision. However, their Lordships have directed the first respondent to consider afresh in the light of the materials furnished by the petitioner whether the sugar mill at Tirumandankudi is a new industry, entitled to the benefits of G. O. Ms. No. 500 dated May 14, 1990. In the light of the observation and conclusion of the Division Bench referred to above, now I shall consider the impugned order passed by the first respondent. 10. No. 500 dated May 14, 1990. In the light of the observation and conclusion of the Division Bench referred to above, now I shall consider the impugned order passed by the first respondent. 10. The following reasons have been furnished by the first respondent for rejection of the claim of the petitioner to avail benefits under G. O. Ms. No. 500 dated May 14, 1990 : (i) The petitioner-company failed to furnish details regarding permission granted by the Government of India under Industries (Development and Regulation) Act, 1951 ("IDR Act") to establish a new sugar unit at Tirumandankudi; (ii) The particulars furnished, namely, industrial application, nature of concern, loan proceedings, prospects, annual reports, etc., show that no new company had been started by the petitioner-company, whereas a sugar mill (Unit-II) was started by the company without establishing new separate legal entity under the Companies Act. (iii) Thiru Arooran Sugars Limited is more than one industrial undertaking or factories which are not separate legal entity as envisaged by the Companies Act and as contended by them in the application that a new company will be formed.(iv) The petitioner had made the Government of India believe that a new company would be formed which was not to be so, hence the sugar mill at Tirumandankudi is not a new company but only a new sugar factory promoted by an experienced entrepreneur; (v) While sanctioning the loan to the petitioner-company, the Bharat Overseas Bank in its letter of sanction had categorically stated as "term loan for expansion projects"; (vi) SIPCOT cannot take the orders passed or decision taken by Provident Fund Commissioner or any other authority as an evidence to consider the case of the petitioner-company that it is a new company; (vii) The State Government has considered the Tirumandankudi Sugar Mill as a new unit is limited for the purpose of demarcating the cane area and also for such purposes related to the sugar mills; and (viii) The prospects of the petitioner-company makes it clear that it has two sugar plants coming under one and the same legal entity. The CST and TNGST registration for both the plants are only one, as both the plants are under the same company. 11. I have already extracted the entire Government Order No. 500, Industries Department dated May 14, 1990. The CST and TNGST registration for both the plants are only one, as both the plants are under the same company. 11. I have already extracted the entire Government Order No. 500, Industries Department dated May 14, 1990. It is clear that in order to promote more industries in the backward areas, even in the year 1989, the Government of Tamil Nadu had declared 105 taluks as industrially backward for the purposes of grant of interest-free sales tax loan, interest free sales tax deferral, State capital subsidy, etc. With a view to correct regional imbalances in the industrialisation in the State, the Government decided to give further incentive to more backward areas; accordingly identified 30 taluks from among 105 industrially backward taluks and declared as industrially most backward taluks. The names of 30 taluks are annexed to the said Government Order. The first limb of para 3 of the Government Order makes it clear that if new industry is set up in any one of the 30 most backward taluks and in the 3 industrial complexes of SIPCOT, the said industry is eligible apart from other existing concessions for full waiver of sales tax due for a period of 5 years up to a ceiling of the total investment made in the fixed assets. The second limb of the said paragraph speaks about existing industries in the most backward taluks and in the three industrial complexes in the SIPCOT for expansion/diversification eligible for full waiver of sales tax dues for a period of 5 years subject to the ceiling of the total investment made in fixed assets under expansion/diversification. If the petitioner is able to prove that the sugar factory established at Tirumandankudi, Papanasam taluk, is a new industry set up by them undoubtedly they are entitled to claim full waiver of sales tax dues and other concessions as per first limb of para 3 of the Government Order No. 500. It is clear that petitioner-company secured an independent industrial licence which was for the grant of new undertaking under the Industries (Development and Regulation) Act, 1951 (hereinafter referred to as "the Act"). Section 11 of the Act speaks about licensing of new industrial undertakings. Section 11 runs as follows : "11. Licensing of new industrial undertakings. It is clear that petitioner-company secured an independent industrial licence which was for the grant of new undertaking under the Industries (Development and Regulation) Act, 1951 (hereinafter referred to as "the Act"). Section 11 of the Act speaks about licensing of new industrial undertakings. Section 11 runs as follows : "11. Licensing of new industrial undertakings. - (1) No person or authority other than the Central Government, shall, after the commencement of this Act, establish any new industrial undertaking, except under and in accordance with a licence issued in that behalf by the Central Government : Provided that a Government other than the Central Government may, with the previous permission of the Central Government, establish a new industrial undertaking. (2) A licence or permission under sub-section (1) may contain such conditions including, in particular, conditions as to the location of the undertaking and the minimum standards in respect of size to be provided therein as the Central Government may deem fit to impose in accordance with the rules, if any, made under section 30." Section 13 of the Act speaks about expansion of the existing industries. In this regard, Mr. Parasaran, learned Senior Counsel has brought to my notice licence granted by the Government of India, Ministry of Food, Directorate of Sugar, Krishi Bhavan, New Delhi dated October 29, 1991. The said certificate is as follows : "No. F10(8)91-PC 1587 Government of India Ministry of Food Directorate of Sugar Krishi Bhavan, New Delhi - 110 001. No. 88/004. CERTIFICATE This is to certify :- (1) that M/s. Thiru Arooran Sugars Ltd., Tirumandankudi, District Thanjavur (Tamil Nadu) is a new unit with licensed capacity of 2500 TCD which has commenced production for the first time on March 31, 1990 in the sugar year 1989-90 and is eligible to avail of incentives in accordance with the sugar incentive scheme announced by the Directorate of Sugar Letter No. F3(6) 88-PC dated 26th December, 1988 and (2) that the sugar factory has been sanctioned free sale quota for 7 (seven) years as per details given below commencing from the sugar year 1990-91 and pending with sugar year 1996-97.Sr. No. Sugar year Percentage of total free sale quota. 1. 1990-91 90 (Ninety) 2. 1991-92 92 (Ninety-two) 3. 1992-93 92 (Ninety-two) 4. 1993-94 92 (Ninety-two) 5. 1994-95 92 (Ninety-two) 6. 1995-96 93 (Ninety-three) 7. 1996-97 93 (Ninety-three). Place New Delhi, Sd/- ..... Date 29th October, 1991. No. Sugar year Percentage of total free sale quota. 1. 1990-91 90 (Ninety) 2. 1991-92 92 (Ninety-two) 3. 1992-93 92 (Ninety-two) 4. 1993-94 92 (Ninety-two) 5. 1994-95 92 (Ninety-two) 6. 1995-96 93 (Ninety-three) 7. 1996-97 93 (Ninety-three). Place New Delhi, Sd/- ..... Date 29th October, 1991. (Kanti Deb) Director (Sugar Administration) Sd/- Sd/- ..... (D. P. Rangan) (R. P. Singhal) Director (Cost) Director (Sugar Technical)." It is clear that the sugar factory at Tirumandankudi of Thiru Arooran Sugars (petitioner herein) is a new unit with licensed capacity of 2500 TCD. It is also clear that the said new industry is eligible to avail of incentives in accordance with the sugar incentive scheme announced by the Directorate of Sugar letter dated December 26, 1988. There are also other provisions in the very same Act as well as Rules made thereunder which are intended to provide for the development and regulation of certain industries. It is also clear from the said provisions that the Government of India before granting licence for a new industrial undertaking, considers so many aspects and after satisfaction, issues licence in terms of the provisions of the Act and Rules. In such circumstance, the view taken by the first respondent with reference to the licence issued for the sugar industry which is a new industry at Tirumandankudi, Papanasam taluk, cannot be accepted. As a matter of fact, the particulars regarding grant of licence for the said new industry have been furnished by the petitioner before the first respondent. 12. Even the order passed by the Sugarcane Commissioner in the matter of demarcation of cane area supports the case of the petitioner. It is not disputed that the Sugarcane Commissioner has earmarked/reserved certain taluks for the unit, namely, the sugar factory at Tinunandankudi, Papanasam taluk. The said aspect has not been disputed, however, it is stated that only for the convenience and use of the sugar factories, demarcation has been made. Such contention cannot be accepted. 13. It is also demonstrated that the new unit at Tirumandankudi has an independent licence under the Factories Act, 1948 as well as an independent licence under the Central Excise Act, 1944. The benefits of incentives of sugarcane cess as applicable to new sugar mills and infancy protection under the Provident Fund Act are also applicable to the new unit. 13. It is also demonstrated that the new unit at Tirumandankudi has an independent licence under the Factories Act, 1948 as well as an independent licence under the Central Excise Act, 1944. The benefits of incentives of sugarcane cess as applicable to new sugar mills and infancy protection under the Provident Fund Act are also applicable to the new unit. In such circumstance, the proceedings of the first respondent to characterise the new unit of the petitioner as "expansion" is arbitrary and not based on any relevant materials. 14. As stated above, para 3 of the Government Order speaks about "new industry", " existing industry"," new unit", and" existing unit". It is not disputed that the petitioner-company had an existing unit at Vadapathimangalam, Needamangalam taluk. The said taluk is classified as a backward taluk. It is the definite case of the petitioner that they had a old unit at a backward taluk, namely, Needamangalam taluk and a new unit in a most backward taluk, namely, Papanasam taluk. After perusing G. O. Ms. No. 500 dated May 14, 1990, I am of the view that the said Government Order does not speak about the present setting up of new unit or expansion unit. In other words, as rightly contended by Mr. Parasaran, learned Senior Counsel for the petitioner, the notification considered as irrelevant the entity of the personality of the entrepreneur. Accordingly, the first respondent is misconceived in stating that the petitioner being an existing company running an old unit could never have set up a new unit for the company since the company was an existing industry. The said conclusion cannot be appreciated. 15. It is also clear from the particulars finished by the petitioner-company before the first respondent that the new industry at Tirumandankudi is a self contained new sugar mill with its own plant and machinery, infra-structure, independent personnel, including officers and staff for the management of the new factory, separate excise records and separate electricity licence for the consumption of power, etc. The above particulars strengthened the case of the petitioner and falsify the stand of the first respondent. 16. It is also clear from the impugned order that even though G. O. Ms. No. 500 dated May 14, 1990 itself contains conditions for claiming full waiver of sales tax, etc., the first respondent while passing the impugned order has taken note of various Government Orders. 16. It is also clear from the impugned order that even though G. O. Ms. No. 500 dated May 14, 1990 itself contains conditions for claiming full waiver of sales tax, etc., the first respondent while passing the impugned order has taken note of various Government Orders. In this regard, I may point out para 13 of the said Government Order, namely, G. O. Ms. No. 500 dated May 14, 1990 which reads thus : "13. This order modifies all the previous orders available on the subject-matter to the extent to which the scheme has been covered by this order." In the light of the paragraph 13 referred to above, which repeals and modifies all the previous orders which are not in conformity with G. O. Ms. No. 500 dated May 14, 1990, the first respondent has committed an error in referring to the earlier Government Orders while rejecting the claim of the petitioner. 17. It is also clear from the order of the first respondent that only new company with one industry can get the benefit of G. O. Ms. No. 500 dated May 14, 1990. The said interpretation by the first respondent goes against the object of the Government in bringing new industries in a most backward taluks. First of all, there is no basis for such interpretation and even so, the same is clearly arbitrary. I am also in agreement with the argument of the learned Senior Counsel for the petitioner, namely, while all functionaries of the Union of India and the State Government have construed the new unit of the petitioner at Tirumandankudi in Papanasam taluk as a new undertaking and not as expansion or diversification, it is the first respondent alone which say that the said mill at Tirumandankudi is only an expansion of their old unit at Vadapathimangalam. It is also clear that the materials placed before the first respondent can only lead to a conclusion that the petitioners set up a new unit within the first limb of paragraph 3 of the Government Order No. 500 dated May 14, 1990. 18. Now I shall consider various decisions referred to by the learned Senior Counsel for the petitioner. With regard to new industrial undertaking, a decision of the apex reported in Textile Machinery Corporation Ltd. v. Commissioner of Income-tax, West Bengal, was pressed into service. 18. Now I shall consider various decisions referred to by the learned Senior Counsel for the petitioner. With regard to new industrial undertaking, a decision of the apex reported in Textile Machinery Corporation Ltd. v. Commissioner of Income-tax, West Bengal, was pressed into service. Two questions referred in that case were whether the Tribunal was right in holding that the steel foundry division was an industrial undertaking to which section15C of the Indian Income-tax Act, 1922, applied ?; and whether the Tribunal was right in holding that the jute mill division set up by the assessee-company was an industrial undertaking to which section15C of the Indian Income-tax Act, 1922 applied ? The following discussion and conclusion of their Lordships are relevant : "The principal object of section 15C is to encourage setting up of new industrial undertakings by offering tax incentives within a period of 13 years from April 1, 1948. Section 15C provides for a fractional exemption from tax of profits of a newly established undertaking for five assessment years as specified therein. This sectionwas inserted in the Act in 1949 by section 13 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 (Act 67 of 1949), extending the benefit to the actual manufacture or production of articles commencing from a prior date, namely, April 1, 1948. After the country had gained independence in 1947 it was most essential to give fillip to trade and industry from all quarters. That seems to be the background for insertion of section 15C. It is also significant that the limit of the number of years for the purpose of claiming exemption has been progressively raised from the initial 3 years in 1949 to 6 years in 1953, 7 years in 1954, 13 years in 1956 and 18 years in 1960. The incentive introduced in 1949 has been thus stepped up ever since and the only object is that which we have already mentioned.Under sub-section (1) of section 15C the tax shall not be payable by an assessee on profits not exceeding six per cent. per annum on the capital employed in the new industrial undertaking from the profits of which alone exemption is claimed. Sub-section (2) of section 15C has a negative as well as a positive aspect. per annum on the capital employed in the new industrial undertaking from the profits of which alone exemption is claimed. Sub-section (2) of section 15C has a negative as well as a positive aspect. Negatively, the new industrial undertaking of the assessee should not be formed - (1) by the splitting up of the business already in existence" (2) by the reconstruction of business already in existence, or (3) by the transfer to a new business of building, machinery or plant used in a business which was being carried on before April 1, 1948. We agree that it is not possible to exclude any new industrial undertaking other than the three categories mentioned above. We are concerned in these appeals with the type No. (2) mentioned above. Positively, the new industrial undertaking must produce result, that is to say, it has to manufacture or produce articles at any time within a period of 13 years from April 1, 1948. The further requirement under sub-section (2) is with regard to the personnel in the undertaking, namely, that ten or more workers have to work in the manufacturing process carried on with the aid of power or twenty or more workers have to carry on work without the aid of power. The above element with regard to the number of workers engaged in the undertaking would go to show that even small industrial undertakings, newly started, are within the exemption clause, where, for example, twenty workers may complete the industrial process without the aid of power. There is no controversy about the positive aspect in these appeals. Again, the new undertaking must not be substantially the same old existing business. The third excluded category mentioned above is significant. Even if a new business is carried on but by piercing the veil of the new business it is found that there is employment of the assets of the old business, the benefit will not be available. From this it clearly follows that substantial investment of new capital is imperative. The words 'the capital employed' in the principal clause of section 15C are significant, for fresh capital must be employed in the new undertaking claiming exemption. There must be a new undertaking where substantial investment of fresh capital must be made in order to enable earring of profits attributable to that new capital."Again their Lordships have pointed out thus : ".................. There must be a new undertaking where substantial investment of fresh capital must be made in order to enable earring of profits attributable to that new capital."Again their Lordships have pointed out thus : ".................. For the purpose of section 15C the industrial units set up must be new in the sense that new plants and machinery are erected for producing either the same commodities or some distinct commodities. In order to deny the benefit of section 15C the new undertaking must be formed by reconstruction of the old business. Now, in the instant case, there is no formation of any industrial undertaking out of the existing business since that can take place only when the assets of the old business are transferred substantially to the new undertaking. There is no such transfer of assets in the two cases with which we are concerned." Again their Lordships have observed thus : ".................... The two new undertakings are independently producing articles which may be of aid to the principal business but yet the undertakings are distinct and not reconstruction out of the existing business of the assessee. Use by the assessee of the articles produced in its existing business or the concept of expansion are not decisive tests in construing section 15C. "19. The other decision is in the case of Tata Oil Mills Co. Ltd. v. Collector of Central Excise. In this decision, the Tribunal observed that concessional rates are allowed as incentives for use of certain raw materials and these rates are determined after taking into consideration the economics of operation involving the use of the said material in the manufacturing process in the manufacturer's factory. Holding that the notification did not envisage the use of rice bran fatty acid and it is the rice bran oil which is required to be used in the manufacture of soap for concessional assessment purposes, the Tribunal dismissed the appeals of the assessee. Hence the assessee filed appeals before the Supreme Court. After considering the rival contentions, their Lordships have concluded as follows :" We are of opinion that the view taken by the excise authorities as well as by the Tribunal proceeds upon too narrow in interpretation of the notification. It is true, as Mr. Hence the assessee filed appeals before the Supreme Court. After considering the rival contentions, their Lordships have concluded as follows :" We are of opinion that the view taken by the excise authorities as well as by the Tribunal proceeds upon too narrow in interpretation of the notification. It is true, as Mr. Ganguli contended, that an assessee claiming relief under an exemption provision in a taxing statute has to show that he comes within the language of the exemption. But, in trying to understand the language used by an exemption notification, one should keep in mind two important aspects : (a) the object and purpose of the exemption, and (b) the nature of the actual process involved in the manufacture of the commodity in relation to which exemption is granted. So far as (b) is concerned, it is common ground before us that rice bran oil as such is not directly used in the manufacture of soap. Rice bran oil contains glycerol and other impurities which have to be removed by a process of hydrolysis or hydrogenation and it is only the resultant purified rice bran oil that is actually used in the manufacture of soap. In fact, the Tribunal has given a clear finding that a pre-treatment to rice bran oil is required to be done as a matter of necessity for its use in the manufacture of soap. Thus even a factory which concerns rice bran oil in the manufacture of soap in its factory first converts the oil into hydrogenated oil or fatty acid and then manufactures soap out of the latter. So far as (a) is concerned, the object of the notification - as even the Tribunal finds - is to grant a concession to a manufacturer of soap who manufactures soap from rice bran oil to a substantial extent and thus discourage the use of edible oils in the manufacture. If these two aspects are considered together, it is clear that the emphasis in the notification is not that rice bran oil should be used as raw material in the very factory which produce the soap. The requirement is that the soap manufacture should, to a prescribed extent, be from rice bran oil as contrasted with other types of oil. If these two aspects are considered together, it is clear that the emphasis in the notification is not that rice bran oil should be used as raw material in the very factory which produce the soap. The requirement is that the soap manufacture should, to a prescribed extent, be from rice bran oil as contrasted with other types of oil. The contrast is not between the use of rice bran oil as opposed to rice bran fatty acid or hydrogenated rice bran oil; the contrast is between the use of rice bran oil as opposed to other oils. That is the ordinary meaning of the words used. These words may be construed literally but should be given their fullest amplitude and interpreted in the context of the process of soap manufacture. There are no words in the notification to restrict it to only to cases where rice bran oil is directly used in the factory claiming exemption and to exclude cases where soap is made by using rice bran fatty acid derived from rice bran oil. The whole purpose and object of the notification is to encourage the utilisation of rice bran oil in the process of manufacture of soap in preference to various other kinds of oil (mainly edible oils) used in such manufacture and this should not be defeated by an unduly narrow interpretation of the language of the notification even when it is clear that rice bran oil can be used for manufacture of soap only after its conversion into fatty acid or hydrogenated oil. "After concluding so, their Lordships have held that the assessee is entitled to the exemption under the notifications referred to therein and that the departmental authorities and the Tribunal erred in not granting the said exemption to the assessee. 20. The next decision referred to is in the case of Workmen of the Straw Board Manufacturing Co. Ltd. v. Straw Board Manufacturing Co. Ltd. In deciding the question whether industrial establishments owned by the same management constitute separate units or one establishment, the relevant conclusion arrived at by their Lordships is as follows :" 16. Bearing in mind the not too rigid principles laid down by this Court, is noticed above, we have to consider if the two units, the S. Mill and the R. Mill, can be held, on the materials established in this case, to be functionally one single establishment. Bearing in mind the not too rigid principles laid down by this Court, is noticed above, we have to consider if the two units, the S. Mill and the R. Mill, can be held, on the materials established in this case, to be functionally one single establishment. Broadly the common features of the two units emphasised before is by the appellants are unity of ownership; ultimate control and supervision; unity of finance; similarity of service conditions in general; similarity of general wage structure; proximity of the units; some work (viz., preparation of water proof masala) for the R. Mill being performed in the S. Mill, common boiler located in the S. Mill supplying steam to R. Mill; location of the processing furnace of the R. Mill in the S. Mill; identical bonus scheme for both the units except for one year; inter-transferability of employees from one unit to the other; identical working condition, maintenance of one balance-sheet and profit and loss account and one consolidated account for the company including both the units; depreciation fund; same occupier, namely, the Director (E. W. 1), for both the mills and above all treatment by the company of both the units as one in certain matters, such as opening of bank accounts except in the State Bank where it was in the name of the company, Regmal section, and the products of both the units bearing the name of the company. The submission is sought to be reinforced by reference to some earlier awards of Tribunals in certain adjudications where it is pointed out that the Tribunal had held that the standing orders of the company were applicable to the R. Mill and the workmen's terms of conditions of service were the same in both the units. 17. On the other hand the circumstances pointed out in favour of the respondent are 'that the two units are separate. Both factories are registered separately under the Factories Act and they are in separate premises. The raw materials used in the two factories are different and it is obtained from different sources. Electricity is obtained by the two factories from different sources, the sale of products manufactured in the respective units is effected from their respective offices, the staff of the two mills is separate and wages are paid separately. The raw materials used in the two factories are different and it is obtained from different sources. Electricity is obtained by the two factories from different sources, the sale of products manufactured in the respective units is effected from their respective offices, the staff of the two mills is separate and wages are paid separately. The accounts of the two mills are maintained separately although finally they are amalgamated into one account of the company. Fire insurance of the two factories is done separately, the local manager of the Employees' State Insurance Corporation has allotted different numbers of provident fund to the two factories, the assessment of sales tax for the sales of products of the two mills is done separately which is obviously due to the fact that the products are different and different rates of sales tax apply to them'. There is no provision in the standing orders of the company regarding transfer of workmen from one unit to the other. 18. ................... 19. After giving due consideration to all the aspects pointed out by the learned counsel for the appellants, we are unable to hold that the R. Mill is not an independently functioning unit and that there is any functional integrality as such between the R. Mill and the S. Mill. The fact of the unity of ownership, supervision and control and some other common features, which we have noticed above, do not justify a contrary conclusion on this aspect in the present case ........" 21. In the light of the above factual and legal position, I summarise that the following features finished by the petitioners undoubtedly support their claim to get benefit under G. O. Ms. No. 500 dated May 14, 1990 :(i) The new sugar mill of 2500 TCD at Tirumandankudi in Papanasam taluk, Thanjavur district, for manufacture of sugar was licensed under section11 of the Industries (Development and Regulation) Act, 1951. The Government of India in their letter of intent by their proceedings dated March 7, 1990 certified that the said mill as "new industrial undertaking"; (ii) The Government of Tamil Nadu while fixing the sugarcane cess, considered the said mill as new industry. The Government of India in their letter of intent by their proceedings dated March 7, 1990 certified that the said mill as "new industrial undertaking"; (ii) The Government of Tamil Nadu while fixing the sugarcane cess, considered the said mill as new industry. The Government have also allotted separate commercial area for Tirumandankudi factory by their proceedings dated November 25, 1988; (iii) The new sugar mill at Tirumandankudi secured infancy protection under section16 of the Provident Fund Act and the said benefit is given only to new establishments; (iv) The abundant particulars, namely, the factory has a capacity to crush 2500 TCD of Sugarcane per day, complete range of plant, machinery implements. instruments, equipments, power connection, separate staff, workers, its own records, books of accounts, independent factory general manager designating as occupier for the purposes of Factories Act, separate registration for Central excise, separate licence under the Factories Act; and (v) The certificate of the Government of India dated October 29, 1991 recognising the sugar factory at Tirumandankudi as a new unit which is eligible to avail of incentives in accordance with the Sugar Incentive Scheme announced by the Directorate of Sugar. 22. It is also clear from the particulars furnished that the new sugar unit set up at Tirumandankudi, Papanasam taluk geographically and physically is a new industry set up in the most backward taluk in terms of G. O. Ms. No. 500 dated May 14, 1990. It is a well-settled rule of construction that the purpose of the notification to promote industrialisation must be paramount in the interpretation. Accordingly, G. O. Ms. No. 500 dated May 14, 1990 is to encourage new industry and to remove regional imbalance. In the light of the said object, the same should be construed liberally. In many decisions, this Court as well by as the apex Court have held that since a provision for promoting economic growth has to be interpreted liberally, the restriction on it too has to be construed so as to advance the objective of the provision and not to frustrate it. 23. In the light of what is stated above, I hold that the sugar factory set up at Tirumandankudi, Papanasam taluk, is a new industry and undoubtedly, the petitioners are entitled to the benefits under Government Order Ms. No. 500 dated May 14, 1990. 23. In the light of what is stated above, I hold that the sugar factory set up at Tirumandankudi, Papanasam taluk, is a new industry and undoubtedly, the petitioners are entitled to the benefits under Government Order Ms. No. 500 dated May 14, 1990. The contrary view taken by the first respondent in their order dated November 8, 1996 is liable to be quashed. Accordingly, the writ petition is allowed and the order of the first respondent dated November 8, 1996 is quashed; consequently the first respondent is directed to issue eligibility certificate to the new unit of the petitioner's establishment at Tirumandankudi, Papanasam taluk, Thanjavur district, under paragraph 3 of G. O. Ms. No. 500 dated May 14, 1990 by way of full waiver of sales tax for a period of five years as per their application dated November 19, 1991 within a period of four weeks from the date of receipt of a copy of this Order. There shall be no order as to costs.