` 266 IN THE HIGH COURT OF PUNJAB AND HARYANA M/s Minda Industries Ltd. State of Haryana CORAM: HON’BLE HON’BLE MR. JUSTICE Present: Mr. Mr. Brijesh Kumar, Advocate, Ms. Suverna Mutneja, Advocate for the appellant. Mr. Sourabh Goel, Addl. AG, Haryana. ASHWANI KUMAR MISHRA, A.C.J. 1. This appeal under Section 36(1) of the Haryana Value Act, 2003, assails an Tribunal, Chandigarh, in STA No.732 of 2004 2. Undisputed facts of the case are that the appellant is a company registered under the Indian Companies Act, 1956. It is engaged in the business of manufacturing and selling of different types of automobile parts to Original Equipment Manufacturers. It has three different divisions for manufacture of switches, lights and horns of automobiles different locations. A switches are located at Delhi, Pune and Gurugram situated at Sonepat and State of Haryana, the appellant has two Gurugram. The unit at Sonepat was set up in 1989, wherein only lights are IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH VATAP Date of Decision: Minda Industries Ltd. …Petitioner Vs. State of Haryana …Respondent HON’BLE THE ACTING CHIEF JUSTICE HON’BLE MR. JUSTICE ROHIT KAPOOR Mr. Pawan Kumar Mutneja, Sr. Advocate with Mr. Brijesh Kumar, Advocate, Ms. Suverna Mutneja, Advocate for the appellant. Mr. Sourabh Goel, Addl. AG, Haryana. *** ASHWANI KUMAR MISHRA, A.C.J. (Oral) This appeal under Section 36(1) of the Haryana Value Act, 2003, assails an order dated 17.02.2005, passed by the Haryana Tax Tribunal, Chandigarh, in STA No.732 of 2004 Undisputed facts of the case are that the appellant is a company registered under the Indian Companies Act, 1956. It is engaged in the business of facturing and selling of different types of automobile parts to Original Equipment Manufacturers. It has three different divisions for manufacture of switches, lights and horns of automobiles different locations. According to the appellant, the manufacturing units of switches are located at Delhi, Pune and Gurugram situated at Sonepat and the horn manufacturing unit is situated at Delhi. In the State of Haryana, the appellant has two units The unit at Sonepat was set up in 1989, wherein only lights are IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH VATAP-171-2012 (O&M) Date of Decision: 28.07.2026 …Petitioner …Respondent THE ACTING CHIEF JUSTICE ROHIT KAPOOR Pawan Kumar Mutneja, Sr. Advocate with Ms. Suverna Mutneja, Advocate for the appellant. Mr. Sourabh Goel, Addl. AG, Haryana. (Oral) This appeal under Section 36(1) of the Haryana Value Added Tax order dated 17.02.2005, passed by the Haryana Tax Tribunal, Chandigarh, in STA No.732 of 2004-05. Undisputed facts of the case are that the appellant is a company registered under the Indian Companies Act, 1956. It is engaged in the business of facturing and selling of different types of automobile parts, which are sold to Original Equipment Manufacturers. It has three different divisions for manufacture of switches, lights and horns of automobiles, which are located at ccording to the appellant, the manufacturing units of switches are located at Delhi, Pune and Gurugram; the light manufacturing unit is horn manufacturing unit is situated at Delhi. In the units, one at Sonepat and the other at The unit at Sonepat was set up in 1989, wherein only lights are Added Tax order dated 17.02.2005, passed by the Haryana Tax Undisputed facts of the case are that the appellant is a company registered under the Indian Companies Act, 1956. It is engaged in the business of which are sold to Original Equipment Manufacturers. It has three different divisions for the which are located at ccording to the appellant, the manufacturing units of light manufacturing unit is horn manufacturing unit is situated at Delhi. In the other at The unit at Sonepat was set up in 1989, wherein only lights are RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment. VATAP-171-2012 (O&M) [2] manufactured, whereas, the unit at Gurugram was established in 2000-2001, for the purpose of manufacturing switches. 3. It transpires that the Government of Haryana inserted Rule 28C in the Haryana General Sales Tax Rules, 1975, for the purpose of granting tax concession to a class of industries for a fixed period, on certain conditions as enumerated therein. Relevant provisions of the Rules shall be referred to later. 4. The appellant moved an application seeking tax concession under Rule 28C (6)(a) of the Rules claiming itself to be an industrial unit. The registration certificate under the Act for the unit in question was also obtained by the appellant on 08.01.2002. The commercial production in the unit had commenced on 30.04.2002. The description of manufactured products as specified in the application, is enumerated below:- “(1) Automobile parts switches, horns, head lamps, tail lamps and sundry lamps, wiring harness, dash board instruments, engine parts and components for all such parts. (2) Tools, dies, fixtures, SPM and moulds.” 5. The application moved by the appellant was examined by the General Manager, District Industries Center and forwarded for grant of tax exemption as a new industrial unit. This recommendation was also forwarded by way of the report of the Deputy Excise and Taxation Commissioner, submitted in the matter vide Annexure A/4. The Director, (Industries) examined the application for exemption from payment of tax vide its order dated 21/26.10.2004. The Director (Industries) found that the appellant already had a unit at Sonepat which was not mentioned by it in the application moved for grant of exemption from payment of tax. The concerned authority, therefore, came to the conclusion that this was a case of an existing unit which was undertaking RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment. VATAP-171-2012 (O&M) [3] expansion and would be covered with the definition of ‘unit in pipeline’. The benefit or exemption in terms of the policy was accordingly granted to the appellant treating it to be an expansion of an existing unit instead of it being a ‘new industrial unit’. Aggrieved by the decision restricting the tax exemption by treating the appellant as an ‘existing industrial unit’ undertaking expansion, rather than as a new industrial unit, the appellant preferred an appeal before the Haryana Tax Tribunal. 6. Before the Tribunal, it was emphasized by the appellant that since the products manufactured at two units namely Sonepat and Gurugram were distinct, as such, it could not have been treated to be a case of expansion particularly when the two units had separate registrations under the Sales Tax Act and the books of account and profits etc. were all separately worked out. The application filed by the appellant, however, has been rejected by the Tribunal vide order impugned in the present appeal. 7. The Tribunal has crystallized the question for its consideration in para No.5 of its judgment, which reads as under:- “5. The only question involved in the present case is as to whether the appellant M/s Minda Industries Ltd., district Gurgaon i.e. company’s Gurgaon unit is a new industry different from M/s Minda Auto Industries, Sonepat i.e. company’s Sonepat or the former in an expansion unit of the latter?” 8. The Tribunal has rejected the claim of the appellant by observing as under:- “10. As per the above definitions the expansion unit as well as diversification unit can be set up at the same or new location as that of the existing unit. In other words it is found that the a expanded/diversification unit of an industrial company can also be RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment. VATAP-171-2012 (O&M) [4] started at another place in the same district or in other district and it need not necessarily be in the same district and/or at the same place as that of the existing unit. 11. When the present case is examined, a bare perusal of the 12th Annual Report 20.03.2004 of Minda Industries Limited i.e. the appellant company reveals that it has its in Haryana i.e. several branches/units for works at Delhi, Pune and Tamilnadu, besides its unit in sonepat district and another in Gurgaon district. To the same effect is the mention in the middle of second page of grounds of this appeal wherein it is specifically mentioned that M/s Minda Auto Industries Ltd. which was manufacturing Automobile switches was amalgamated with M/s Minda Industries Ltd. w.e.f. 01.04.1994 meaning thereby that the appellant company's unit of Sonepat has been in existence since 1994. Thus it is found that the appellant company's Sonepat unit was already an existing unit when it set up /its Gurgaon unit. So its Gurgaon unit is not a new/existing unit and there is therefore no merit in the plea of the learned counsel for the appellant that the appellant company, Gurgaon unit being in different district can not be considered as an expansion unit of the Sonepat unit of the appellant company and the former is a new Industrial unit so far the place of location is concerned. 12. As regards the plea of learned counsel for the appellant company that its Gurgaon unit is manufacturing switches which is a different from light the item being manufactures at its Sonepat unit whereas for expansion unit there is requirement of both the units manufacturing the same items, undoubtedly as per definition of the expansion unit as embodied in rule 28 C (3) (f) of the Rules an industrial unit falls under the category of expansion if it is manufacturing the same items as being manufactured by its existing unit. But needless to say that entitlement of the appellant company's Gurgaon unit is for the manufacturing of electric lamps namely head lamps, tail lamps, and sundry lamps electric switches, Horns, IW Harness, Locks for two wheelers, four wheelers, Plastic parts/Articles, Internal Combustion Piston engines & other parts, tools. Dies & Moulds, Fixtures & SPM reserved for SSI and these items include the item/items being manufactures by the appellant company's Sonepat unit, Even in its application for registration of its Gurgaon unit in question (copy placed on record during the course of arguments), this unit's business specified is manufacture of Automobile part, Electrical RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment. VATAP-171-2012 (O&M) [5] Auto parts. The matter does not end here. In its application Form for the grant of Tax concession under Rule 28 C (6) (a) of the Rules showing its date of production as on 30.04.2002 the appellant company in para 2 (1) thereof has stated the description of its manufactured products as under- 1) Automobile Parts Switches, Horns, Head Lamps, Tail Lamps and Sundery Lamps, Wiring Harness, Dash Board Instruments, Engine Parts and Components for all such Parts. 2) Tools, Dies, Fixtures, SPM & Moulds. 13. As per eligibility certificate also it can produce all the items above mentioned for which entitlement certificate has been issued to him vide letter dated 21.10.2004 aforementioned and these items undoubtedly include the item/items being manufactured in the appellant company's Sonepat unit. 14. In that view of the matter it can not be held that the appellant company's Gurgaon unit is manufacturing only a different item than its Sonepat unit and instead the former is manufacturing same item as that of the latter, besides some other items. Thus its Gurgaon unit falls within the definition of expansion/diversification unit.” 9. Learned senior counsel for the appellant contends that the claim of the appellant was for grant of exemption from payment of tax as a new industrial unit, which has not been examined in its correct perspective by the Tax Tribunal, Haryana. It is submitted that the Tribunal has erred in affirming the view taken by the High Level Screening Committee, which led to the passing of an order by the Director, as per which, the case of the appellant was of expansion, and not of establishment of a new industrial unit. 10. Learned counsel for the revenue has placed heavy reliance upon the disclosure made by the appellant in its application seeking exemption from payment of tax, wherein, the description of manufactured products included not only the switches but also lights. With the aid of such document, it is sought to be RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment. VATAP-171-2012 (O&M) [6] contended on behalf of the revenue, that the appellant never disclosed in its application that it had an existing industrial unit and the product being manufactured at its existing industrial unit at Sonepat, was distinct from the product which came to be manufactured in its unit at Gurugram. It is submitted that the application of the appellant is otherwise liable to be rejected since there was concealment of facts, therefore, by virtue of Clause 28C(6)(a) of the Rules, the application did not merit consideration. It is, therefore, urged that the view taken by the Tribunal requires no interference. 11. We have heard learned senior counsel for the appellant and learned counsel for the revenue, and have perused the materials on record. 12. Before we proceed to delve into the rival contentions, it would be relevant to refer to the statutory scheme, under which, the claim for exemption was required to be dealt with. Rule 28C of the Rules, 1975, contains the scheme for tax concession to be granted to classes of industries, and the terms of such exemptions. Rule 28C (3) (b) defines diversification in following terms:- “Diversification means an industrial capacity set up or installed [during the operative period which creates production facilities for manufacture of product(s) different from the product(s) of manufacture of the unit before diversification in which the additional fixed capital investment towards diversification made 2 [within two years immediately preceding the date of commercial production of expanded capacity], exceeds 25% of the fixed capital investment (gross block) of the unit before diversification at the same or new location.” RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment. VATAP-171-2012 (O&M) [7] 13. “Existing Unit’ has been defined in Rule 28C (e) of the Rules, which means an industrial unit which had come into commercial production before coming into force of this rule. 14. ‘Expansion’ is defined in sub-clause (f), which reads as under:- “Expansion means an industrial capacity set up or installed during the operative period which creates additional production facilities for manufacture of the same product(s) as the unit before expansion in which the additional fixed capital investment in plant and machinery made [within two years immediately preceding the date of commercial production of diversified capacity], exceeds 25% of the fixed capital investment (gross block) of the unit before expansion at the same or new location.” 15. ‘New Industrial Unit’ has been defined in sub-clause (k), which reads as under:- “new industrial unit’ means a unit which has been set up in the State of Haryana and has come into commercial production during the operative period of this policy or having come into commercial production under rule 28-A or 28-B has not started availing any tax concessions under the said rule. 16. Clause 28C (o) of the Rules, defines ‘units in pipeline’, which is reproduced herein after:- “units in pipeline means an industrial unit which as on the 30th April, 2000, fulfils the following conditions:- (i) is registered with the Department of Industries (ii) has arranged land or premises by way of purchase, allotment, lease or rent; (iii) has applied for finances from a regular financial institution; and (iv) would start production within 2 years i.e. before the 1st May, 2002.” RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment. VATAP-171-2012 (O&M) [8] 17. From the material placed on record, it is apparent that the appellant had an existing industrial unit at Sonepat since 1989. The appellant established a separate industrial unit at Gurugram, and whether such unit may be termed as a 'new industrial unit' under Rule 28C, is the precise issue requiring reconsideration. The appellant has categorically stated that it had not availed of any tax exemption in respect of its existing unit at Sonepat. This statement of fact has been categorically pleaded before the authorities, and is not in dispute. Therefore, it can be safely deduced that though the appellant had an industrial unit at an earlier point in time at Sonepat, but it had not availed any tax exemption. 18. So far as the argument regarding suppression of material facts raised by counsel for the revenue is concerned, we find such an argument not to be available to the revenue, since the application of the appellant has not been rejected on said ground. As a matter of fact, the application has been considered on merits, and has been allowed by the authorities. The limited issue that requires consideration is as to whether it would be a case of ‘new industrial unit’ or would it fall within the case of ‘expansion of industrial unit’. 19. In such view of the matter, the appeal succeeds and is allowed. The impugned order dated 17.02.2005 passed by the Haryana Tax Tribunal, Chandigarh, in STA No.732 of 2004-05 is hereby set aside. The matter is remitted to the Haryana Tax Tribunal for fresh adjudication of the appellant's claim for grant of tax concession, keeping in view the observations recorded hereinabove and after affording due opportunity of hearing to the parties. It is clarified that this Court has not expressed any final opinion on the merits of the appellant's entitlement to the benefit claimed, and all such questions are left open to be decided by the Tribunal in accordance with law. Since the matter has RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment. VATAP-171-2012 (O&M) [9] remained pending for a considerable period, the Tribunal is requested to make an endeavour to dispose of the proceedings expeditiously, by fixing short dates and without granting unnecessary adjournments to the parties. 20. All pending misc. application(s), if any, also stand disposed of. (ASHWANI KUMAR MISHRA) ACTING CHIEF JUSTICE (ROHIT KAPOOR) JUDGE 28.07.2026 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable? : Yes/No RAJESH KUMAR 2026.07.31 10:15 I attest the accuracy and authenticity of this order/judgment.