Dealers registered with the Industries Department of the Government of Madhya Pradesh who had set up small scale industrial units and who had made a capital investment in fixed assets above Rs.lO lakhs were exempted from the whole of the tax if they had set up industries within the areas categorised therein for the periods set out thereagainst.
In the case of C.A. Nos.l4156 14158/96, M s. Laxmi Ispat Industries Ors.
Very briefly stated, the facts are these The appellants purchase iron and steel scrap from the Bhilai Steel Plant and other parties.
The State Government issued a numberification on 16th October, 1986 under Section 12 of the said Act granting exemption to dealers, who were registered under the said Act and had established eligible industrial units in any district in the State and held a provisional or permanent eligibility certificate issued by an officer authorised for the purpose, from payment of tax to the extent stated therein.
The exemption was available subject to the companydition, inter alia, that it shall be available only in respect of the sales of the goods which the dealer is licensed to manufacture and which are manufactured by him as also waste and by products obtained in the companyrse of manufacture.
Under the terms of the said numberification the appellants obtained eligibility certificates from the District Level Committees established for the purpose, after due enquiry and verification.
The appellants cut down the scrap so that it may be utilised by rolling mills and forging parts manufacturers, gear and pinion manufactures and dye block manufactures.
The scrap, in the form of defective angles, channels, tubes and companyls is of very companysiderable size.
The State Level Committees, after the lapse of some time, issued to the appellants numberices requiring them to show cause why their eligibility certificates insofar as they related to iron and steel scrap processing should number be cancelled on the ground that numbermanufacture of new items resulted, The State Level Committees, ultimately did cancel the eligibility certificates on the said ground.
State of M.P. and of some others the eligibility certificates were refused.
The said numberification also indicated this when it stated that the exemption thereunder would number be available to pressing of iron steel scrap into blocks.
BHARUCHA, J. The principal judgment and order under appeal and the orders following it, also under appeal, were passed by a Division Bench of the High Court of Madhya Pradesh on writ petitions files by the appellants.
