Sun Pharma Laboratories LTD. vs. The State Of Bihar

Facts

The petitioner, Sun Pharma Laboratories Ltd., installed a solar power project in Bihar. This project was undertaken as a sub-contractor for the 6th respondent, Alfa Infraprop Pvt. Ltd., who had a contract with the 4th respondent, Bihar State Power Holding Company Limited. The petitioner sought exemption from entry tax on materials imported for the construction. The Assessing Officer, by an order dated 08.10.2018, denied this exemption, stating no notification absolved the entry tax levy during the construction period. The petitioner's activity occurred during 2016-17. The Court noted that S.O. 391 dated 10.11.2011 exempted entry tax for new and renewable energy projects for five years until 10.11.2016. Furthermore, the Bihar Goods and Services Tax (Amendment) Act, 2019, extended the validity of this notification until 30.06.2017.

Held

The Court held that the Assessing Officer erred in denying the entry tax exemption to the petitioner. The Court found that S.O. 391 dated 10.11.2011 indeed exempted entry tax for new and renewable energy projects for a period of five years, which would have expired on 10.11.2016. Crucially, the Court noted that the Bihar Goods and Services Tax (Amendment) Act, 2019, through Section 22, amended Section 174 of the Act to extend the validity of notification S.O. 391 dated 10.11.2011 up to 30.06.2017. Since the petitioner's activities fell within this extended period (2016-17), they were eligible for the exemption. The Court set aside the Assessing Officer's order and directed a fresh consideration of the matter, specifically taking into account the relevant notification and its extension. The Assessing Officer was instructed to pass a speaking order within one month after providing an opportunity of hearing to the petitioner.

Key Issues

1. Whether the petitioner is entitled to an exemption from entry tax on materials imported for the construction of a solar power project, considering the relevant exemption notification and its extension. (Question of law) Petitioner's Argument: The petitioner contended that they were entitled to entry tax exemption based on S.O. 391 dated 10.11.2011, which provided a five-year exemption for new and renewable energy projects. They further argued that the Bihar Goods and Services Tax (Amendment) Act, 2019, extended the validity of this notification until 30.06.2017, covering their period of activity (2016-17). Revenue's Argument: The revenue, through the Assessing Officer, denied the exemption by not considering the aforementioned notification and its extension, leading to the impugned order.