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2023 DIGILAW 369 (JK)

Surya Biscuits Industries v. State of J&K

2023-08-09

WASIM SADIQ NARGAL

body2023
ORDER : 1. The petitioner through the medium of the present petition is seeking quashment of communication issued in the shape of Form No. 11772 vide order dated 14.06.2012 by way of Certiorari whereby the initial date of production of the commencement of service of the petitioner’s unit has been recorded as 12.06.2012 instead of actual date of production, i.e., 28.03.2012 and further the petitioner is seeking writ of Mandamus commanding the respondents to grant the date of commencement of production of the unit of the petitioner with effect from 28.03.2012. 2. The brief facts arising in the instant case is that the petitioner is proprietor of the Unit running under the name and style of M/S Surya Biscuits Industries SIDCO Industries Complex, Jammu, which is duly registered for manufacturing and sale of biscuits. According to the learned counsel for the petitioner, the unit of the petitioner is duly registered under Central Sales Tax Act, 1956 bearing No. 01761071324 (Central) on 19.09.2011 and is also registered with the Value Added Tax having Tax Identification No. 01761071324 with effect from 27.09.2011 besides being registered with the Commercial Tax Officer Circle ‘G’ Jammu vide No. 757-59-Cto/G dated 28.09.2011. 3. The brief case of the petitioner is that on 15.03.2012, the application of the petitioner for enrolment for Provisional Registration was accepted by the respondent No. 3 vide communication bearing No. SIDCO/CO/SWCS/PP/105/04/610 dated 15.03.2012, whereby the provisional registration was granted for a period of nine months from the date of issuance of the Provisional Registration and the same was valid till December, 2012. Further, the case of the petitioner is that pursuant to the issuance to the aforesaid registration, the petitioner purchased the plant and machinery for the production and manufacturing of biscuits and from 28.03.2012 onwards, the petitioner started the manufacturing activity in the Unit. 4. Mr. Pranav Kohli, learned Senior counsel appearing on behalf of the petitioner submits that the petitioner vide communication dated 28.03.2012 addressed to respondent No. 4 requested the said respondents to issue formal registration in favour of the petitioner-unit with effect from the actual date of production, i.e., 28.03.2012. Learned counsel with a view to substantiate his claim with regard to the starting of the manufacturing activity from the said date has produced on record the stock register which clearly shows that the petitioner commenced the manufacturing activity in the unit with effect from 28.03.2012. Learned counsel with a view to substantiate his claim with regard to the starting of the manufacturing activity from the said date has produced on record the stock register which clearly shows that the petitioner commenced the manufacturing activity in the unit with effect from 28.03.2012. It is not so even the petitioner has purchased the raw material for the production of the biscuits and the manufactured finish goods/biscuits which were also sold in the market on 28.03.3012 under proper invoices. The copies of which have been placed on record and mark collectively as annexure-H along with the stock register. 5. The petitioner through the medium of the instant petition, is aggrieved of the communication issued in the shape of Form No.11772 dated 14.06.2012 whereby according to the petitioner the initial date of production of the commencement of the production of the unit of the petitioner has been shown as 12.06.2012 instead of 28.03.2012 and the said Form has been issued on the basis of a communication dated 14.06.2012 issued by the Directorate of Industries and Commerce, Jammu and addressed to the General Manager District Centre, Jammu. 6. From a bare perusal of the aforesaid communication, it is manifestly clear that the respondents have admitted that date of production of the unit should be 28.03.2012 and there is no reason to doubt the contention of the unit which should have been accepted with respect to the commencement of the production of the date as 28.03.2012. The communication further reveals that the unit was required to be inspected on the same day but since it was not done, the unit was advised to submit the documentary evidence of having started production on 28.03.2012 and subject to the petitioner furnishing the documentary evidence, the case was subsequently required to be submitted to the Directorate for final decision for the grant of DOP. The aforesaid communication further reveals that if the investment of the unit DOP on 28.03.2012 was Rs.17.24 lacs, then the unit should have been considered under small scale category and granted registration earlier after completion of all the documents. 7. In light of the aforesaid backdrop, the unit was granted DOP on 12.06.2012 and EM [Part-II] under medium scale i.e., on 14.06.2012. 8. 7. In light of the aforesaid backdrop, the unit was granted DOP on 12.06.2012 and EM [Part-II] under medium scale i.e., on 14.06.2012. 8. Learned counsel appearing on behalf of the petitioner submits that the petitioner has already submitted the requisite documentary evidence of having started production way back on 28.03.2012 in conformity with clause 5 of the aforesaid communication and accordingly, it was incumbent on the part of the respondents to have submitted the case of the petitioner for final decision for grant of DOP to the Directorate which till date has not been done. 9. Mr. Kohli has further invited attention of this Court with respect to the interim order passed by this Court way back on 30.11.2018, whereby, the respondents were directed to accord consideration with respect to the recording date of production as 28.03.2012 instead of 12.06.2012, if there is no legal impediment. Learned counsel appearing on behalf of the petitioner submits that the said direction was issued way back on 30.11.2018 and the respondents till date have not implemented the same for more than five years. The positive case of the petitioner is that his case has not been accorded consideration in conformity with the interim direction passed by this Court coupled with the observation made in communication dated 14.06.2012, whereby, the petitioner has submitted all the requisite documentary evidence to prove that the production of the unit has commenced on 28.03.2012. The respondents were under legal obligation qua the petitioner’s unit to have submitted the case for final decision for grant of DOP. Learned counsel appearing on behalf of the petitioner further submits that the unit of the petitioner has procured the land on lease hold basis and has installed the plant and machinery and the raw material was also procured for production and there is no doubt that the production of the unit has commenced on 28.03.2012 for the goods for which the unit of the petitioner is registered. The specific case of the petitioner is that the factum of production of the unit with effect from the said date is supported by cogent evidence such as procurement of raw material, stock register, electricity consumption, sale of finished goods or invoices and payment of taxes on the sale of finished goods in the open market. 10. The specific case of the petitioner is that the factum of production of the unit with effect from the said date is supported by cogent evidence such as procurement of raw material, stock register, electricity consumption, sale of finished goods or invoices and payment of taxes on the sale of finished goods in the open market. 10. Further contention of the petitioner is that the petitioner has submitted its Income Tax Returns with the respective Income Tax Department, sales tax department which have been duly accepted without any demur/objection from the date of production. He further submits that the respondents instead of incorporating the date of commencement as 28.03.2012 have incorporated the same as 12.06.2012 which has caused grave prejudice to the petitioner and have been made the basis for reopening of the Income Tax Returns merely on the basis of the date of production. He further submits that since the unit has commenced production prior to March, 2012 and was entitled to the benefits under the provisions of Section 80 IB of the Income Tax Act and the petitioner has already availed these benefits which have been duly accepted by the department at the relevant time by accepting the returns. However, on account of inaction on the part of the respondent in wrongly recording the date of production and not taking a call in pursuant to the communication dated 14.06.2012, these benefits are sought to be withdrawn. The learned counsel appearing for the petitioner further submits that the petitioner continued to carry out the production of the biscuits with effect from 28.03.2012 and have been filing income tax return with the Income Tax Department and it was only on 01.06.2017 when the assessment proceedings under Section 153(A)/143(3) of the Income Tax Act, 1961 for the annual years, 2014-15, 2015-16, 2016-17 were initiated due to mentioning of the wrong date of production as 12.06.2012. The petitioner further pleads that the deductions claimed by the petitioner under law had created vested right in him which cannot be taken away due to inaction on the part of the respondent. 11. Per contra, Mr. K. D. S. Kotwal, learned Dy. AG appearing on behalf of the respondent Nos. 1, 2 and 4 submits that the present writ petition deserves dismissal as required codal formalities for the grant of DOP was not available before 28.03.2012. 11. Per contra, Mr. K. D. S. Kotwal, learned Dy. AG appearing on behalf of the respondent Nos. 1, 2 and 4 submits that the present writ petition deserves dismissal as required codal formalities for the grant of DOP was not available before 28.03.2012. He further submits that DG Set, Fitness Certificate issued by the Power Development Department on 11.06.2012 was made available by the unit holder to the office of the Directorate of Industries & Commerce, Jammu on 12.06.2012. The respondents have taken a specific stand that the majority of machines installed by the petitioner was ready for production on 12.06.2012 and this was precisely the reason that the unit was granted registration on 12.06.2012 instead of 28.03.2012. The specific case of the respondents is that the unit of the petitioner was registered provisionally under the medium scale vide registration No. IDC/SWSC/PP/Reg/2012/160 dated 13.03.2012 for the line activity i.e., manufacturing of Biscuits, which was duly approved by the competent authority in 31st meeting held on 16.02.2012. 12. Reply has also been filed on behalf of respondent No. 3, in which specific stand has been taken that in terms of the Government order and the policy, provisional registration for medium and large scale units is granted after being approved by the Apex Projects Clearance Committee (APCC). In the present case, the approval of the said committee was granted on 16.02.2012 by the APCC in its 31st meeting. The respondent No. 3 has taken a specific stand that as per the provisional registration, the unit was required to go into production within a period of nine months from the date of provisional registration and in the instant case, the provisional registration was valid till December, 2012. The further stand of the respondent is that in terms of the policy, as and when the unit goes into production, it was under obligation on the part of the unit holder to inform the Directorate of Industries and Commerce in case of medium and large scale unit and in case of small scale industrial units, to the concerned District Industries Centre. The further stand of the respondent is that unit of the petitioner was provisionally registered as medium scale industry with an investment of Rs. The further stand of the respondent is that unit of the petitioner was provisionally registered as medium scale industry with an investment of Rs. 28.94 crores and after going into production, the unit was supposed to inform the Directorate of Industries and Commerce for issuance of Certificate of production and also for grant of Permanent Registration Certificate. Since the petitioner has informed the Directorate of Industries and Commerce on 12.06.2012 with respect to the production of the unit under the medium scale category and accordingly, the respondent have admitted that the request was made to the petitioner’s unit to submit the documentary evidences of having started production on 28.03.2012 as claimed by the petitioner for consideration of his case. The respondent No. 3 has not denied the factum of requesting the petitioner’s unit to submit the documentary evidence of having started production on 28.03.2012. 13. Heard learned counsel for the parties at length and perused the record. 14. With the consent of learned counsel for the parties, the present petition is taken up for final disposal. 15. The only grievance which has been projected by the writ petitioner in the instant petition is that the petitioner has although submitted the documentary evidence of having commenced the production of the unit on 28.03.2012, the final decision for grant of DOP (date of production) has not been taken by the Director Industries and Commerce. In spite of the fact that this Court vide interim order dated 30.11.2018 has been pleased to observe that the respondents are at liberty to consider the recording of the date of production as 28.03.2012 instead of 12.06.2012, if there is no legal impediment. The interim order passed by this Court till date has not been implemented as the respondents have not accorded consideration in conformity with the direction passed by this Court nor the respondents have taken a decision as per the mandate and spirit of the observations which finds mention in their own communication dated 14.06.2012 which has been issued by the Director Industries and Commerce and addressed to the General Manager District Centre, Jammu. The respondents were under a legal obligation qua the petitioner to have given due weightage to the recommendation of the Director Industries and Commerce, Jammu while according formal registration in favour of the petitioner’s unit with effect from 28.03.2012 in the communication mentioned supra wherein it has been observed in para 3 which is reproduced as under:- “3. Regarding intimation of Date of Production by the unit on 28.03.2012, there was no reason to doubt the contention of the unit and should have been accepted. Preferably, the unit should have been got inspected on same day to clear doubts, if any. 5. The unit be advised to submit the documentary evidence of having started the production on 28.03.2012 and case be submitted to this Office for final decision for grant of DOP.” 16. The contention of the respondents that the petitioner did not apply for the formal registration by submitting all the requisite documents is contrary to the record and is not tenable in the eyes of law and liable to be rejected in light of the fact that the petitioner has applied well within time before the respondent No. 4 for issuance of formal registration with respect to the date of production as 28.03.2012 on the same date, i.e., 28.03.2012 and the said communication has been duly received by the office of the General Manager District Industries Centre, Jammu on 29.03.2012 by way of acknowledgement/receipt which is evident from a bare perusal of annexure G which has been placed on record by the petitioner. Thus, the contention of the respondents that the petitioner did not apply well within time is contrary to record and is liable to be rejected. 17. Thus, the contention of the respondents that the petitioner did not apply well within time is contrary to record and is liable to be rejected. 17. There is a clear cut admission on part of the respondents that there was no reason to doubt the contention of the petitioner with respect to the date of production of the unit on 28.03.2012, which ought to have been accepted and the unit should have been inspected on the same date to clear the doubts, yet the respondents have slept over the matter for more than 10 years without any justifiable cause and inaction on part of the respondents to take a decision in conformity with the interim order passed by this Court coupled with the directions issued by respondent No. 2 in letter dated 14.06.2012 is without any justifiable cause which has caused grave prejudice to the petitioner. In case, if the decision with respect to the date of production of the unit of the petitioner would have been taken with effect from 28.03.2012 than the unit of the petitioner could have been considered a small category and granted registration earlier. Thus, on account of inaction on part of the respondents by not taking the decision timely regarding the date of production, the benefits which have been availed by the petitioner under the provision of Section 80IB of the Income Tax Act which have been duly accepted by the department at the relevant point of time by accepting the returns are being withdrawn. The record reveals that although the petitioner continued to carry out the production of biscuits with effect from 28.03.2012 and have been filing the returns with the Income Tax Department and the assessment proceedings under Section 153(A)/143(3) of the Income Tax Act for the annual years, 2014-15, 2015-16 and 2016-17 were initiated because of the date of production shown as 12.06.2012 and the deductions claimed by the petitioner were being withdrawn. 18. 18. Since the respondents have failed to take a decision for grant of date of production as on 28.03.2012 in conformity with the interim direction passed by this Court mentioned (supra) coupled with the observation of the Director Industries and Commerce, the learned senior counsel appearing on behalf of the petitioner-unit submitted that he would be satisfied at this stage in case if a direction is issued to the respondents to accord consideration to the unit of the petitioner within some reasonable time in the light of the observations of the concerned Director, i.e., respondent No. 2 and to the aforesaid preposition, the learned counsel appearing on behalf of the respondents have no objection. 19. In the light of the aforesaid, the present petition is disposed of with the direction to the respondents to accord consideration to the case of the petitioner to have commenced the production of the unit on 28.03.2012 instead of 12.06.2012 by granting final DOP in conformity with the observations of the Director Industries and Commerce, which find mention in communication dated 14.06.2012 addressed to the General Manager District Centre, Jammu within a period of six weeks from the date copy of the order along with writ petition and the annexures appended thereto, are made available to the respondents. As necessary corollary, the communication impugned issued by respondent No. 4 in the shape of Form No. 11772 vide acknowledgement dated 14.06.2012 shall stand quashed wherein the initial date of production of the unit of the petitioner has been shown as 12.06.2012 instead of 28.03.2012. Needless to say that in case, if the respondents require any fresh documentary evidence from the petitioner of having started the production on 28.03.2012 as claimed by him, the petitioner’s unit will be at liberty to submit the same before according consideration to the case of the petitioner within the aforesaid period. 20. The writ petition is disposed of in the manner indicated above along with all connected applications.