SCA/2070/2004 1/4 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 2070 of 2004 ========================================= = EMTICI ENGINEERING LTD. & 1 - Petitioner(s) Versus STATE OF GUJARAT & 2 - Respondent(s) ========================================= Appearance : M/S WADIA GHANDY &CO for Petitioner MR UR BHATT, ASST. GOVERNMENT PLEADER for Respondent(s) : 1 - 3. ========================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 07/08/2008 ORAL ORDER (Per : HONOURABLE MS.JUSTICE H.N.DEVANI) 1. This petition has been preferred challenging the action of the respondent authorities of demanding and recovering tax on the basis of the certificates issued by the Sales Tax Department on 1.7.1996 being cancelled in the following circumstances : In 1993, respondent – State of Gujarat announced the scheme titled “Incentive Scheme for Wind Power Generation 1993” for extending sales tax incentives to industrial undertakings who would set up wind farms in the State of Gujarat so as to curb the gap SCA/2070/2004 2/4 ORDER between demand and supply of power in the State. 2. Pursuant to the said Scheme, the petitioner installed one windmill at Lambha, District Jamnagar in March, 1994 at a total eligible investment of Rs.76,75,000/-. On 1.7.1996, the Sales Tax Department issued exemption certificate granting benefit of sales tax deferment to the tune of Rs.38,37,500/-, which was subsequently enhanced by a further sum of Rs.1,01,091/-. The said certificate was effective from 30th March, 1994. The period of benefit was available for a span of six years i.e. commencing from 30th March, 1994 and ending on 29th March, 2000. 3. On 9th June, 1998, a cyclone hit the coastal regions of the State, more particularly districts of Porbandar and Jamnagar resulting in wide spread damage. The windmills installed by the petitioner company were uprooted resulting in stoppage of production of power. One of the conditions of the Scheme was Condition No.7(b) which reads as under: “(b) The Industrial unit will remain in production continuously during the eligible period.” Obviously, as the petitioner could not remain in production continuously during the eligible period, the respondent authority issued notices proposing to SCA/2070/2004 3/4 ORDER recover the amount availed of by the petitioner as sales tax benefit under the said Scheme with interest. Such notices were issued on 19.12.2003, 24.12.2003 and 19.1.2004. The petitioner tendered a detailed explanation on 1.1.2004, followed by subsequent representations pointing out that the demand was unjustified in the facts and circumstances of the case. 4. In April, 1999, the windmill had been re-installed by the petitioner and this fact is not in dispute. It is the case of the petitioner that, despite the aforesaid situation, by an order dated 31st January, 2004, the respondent No.3 held that the petitioner had committed breach of the condition No.7(b) of the Scheme of running the windmill for a continuous period of six years from the date of commissioning. 5. Heard the learned advocate for the petitioner as well as the learned Assistant Government Pleader on behalf of the respondents. 6. It is an admitted position that the controversy involved in the present petition has been decided by a judgement and order of even date made in the case of Elecon Engineering Company Ltd. and another v. State of Gujarat and others, rendered in Special Civil Application No.2067 of 2004. 7. Examining the facts of the present case in the light of SCA/2070/2004 4/4 ORDER the principles laid down in the aforesaid decision, it is an admitted position that the petitioner herein has recommissioned its wind farm within a period of 24 months from the date of the cyclone and hence, the State shall not be entitled to effect recovery on the ground of breach of condition No.7(b) and the petitioner would be simultaneously required to discharge the liability as laid down in the said decision. The petition is, accordingly, allowed on the same terms and conditions and subject to same directions as would be mutatis mutandis applicable. Rule is made absolute to the aforesaid extent with no order as to costs. [D.A.MEHTA, J.] [HARSHA DEVANI, J.] parmar*