Patna HC rules in favor of Hebe Ispat on tax exemption issue

TOI reported that the Patna High Court has recently castigated the commercial taxes department for not giving tax exemption to a small industry on purchase of raw materials and sale of finished goods, as promised under the Bihar Industrial Policy, 2005.

Honourable justice Mr Ajay Kumar Tripathi said that the Indian government must change its negative mindset as it would deter entrepreneurs from making investments in the state.

The court allowed the writ petition of Hebe Ispat which has set up its enterprise at Chhoti Pahari on the outskirts of Patna to manufacture iron and steel. It said that it was attracted by the Bihar Industrial Policy 2005, which allowed the tax exemption for a specified period of time.

The commercial taxes department said that it denied the exemption to this industry as it was registered on August 31st 2000, whereas it should have been registered before this date to avail of the exemption. The petitioner contended it had applied for registration on August 29th 2000 itself.

The court remarked the government has taken resort to hyper technicality and nitpicking while interpreting the industrial policy. Mr Tripathi said that "Such an approach would kill all the initiatives and enthusiasm of the entrepreneurs," directing the competent authority to consider the case afresh for tax exemption.

(Sourced from Times of India)