ACC LTD. vs SECY.INDUSTRIES DEPTT.

Court
Odisha High Court

WP(C)/7530/2015
ODHC010495492015
2026:OHC:214-DB
IN THE HIGH COURT OF ORISSA AT CUTTACK

W.P.(C) No.7530 of 2015
CNR No. ODHC010495492015
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).



ACC Ltd. …. Petitioner (s)
-versus-

The Secretary, Industries
Department & others.
…. Opposite Party (s)




Advocates appeared in the case through Hybrid Mode :

For Petitioner (s) : Mr. Ashok Kumar Parija, Senior Advocate
assisted by
Mr. Saswat Kumar Acharya, Advocate,
Mr. Abhijeet Agarwal, Advocate,
Mr. Ritesh Patnaik, Advocate,
Mr. Tarun Patnaik, Advocate

For Opposite Party (s) : Mr. Satyabrata Mohanty, AGA
Mr. Surya Kanta Padhy, Senior Advocate
for O.P. No.4




CORAM:
HON’BLE DR. JUSTICE SANJEEB K PANIGRAHI
HON’BLE MR. JUSTICE MURAHARI SRI RAMAN



DATE OF HEARING:-07.10.2026
DATE OF JUDGMENT:-16.10.2026


Dr. Sanjeeb K Panigrahi, J.
1. The Petitioner has approached this Court seeking a direction to the
opposite parties to grant and disburse Value Added Tax (VAT)
reimbursement in terms of the Industrial Policy Resolution, 2007
(hereinafter referred to as “IPR 2007”). The claim arises out of the
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Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

“expansion” undertaken by the Petitioner at its Bargarh Cement Works
and the incentives which, according to the Petitioner, became available
under the policy upon such expansion. The present Writ Petition was
instituted on 17.4.2015, challenging the withholding of the claim and
seeking grant and disbursement of VAT reimbursement under IPR
2007.
I . FACTAUL MATRIX OF THE CASE:
2. The Petitioner acquired M/s. IDCOL Cement Ltd., Bargarh, an
undertaking of the Industrial Development Corporation of Odisha, on
22.12. 2003. The unit was merged with the Petitioner with effect from
6.12.2005 and came to be known as Bargarh Cement Works. At the time
preceding the expansion in question, the unit had an installed capacity
of 0.96 million tonnes per annum.

3. The State Government notified IPR 2007 on 2.3.2007. The policy sought
to promote industrial investment in the State by extending incentives
to eligible industrial undertakings, particularly those falling within the
identified “Priority” and “Thrust” Sectors. Paragraph 18.4 dealt with
reimbursement of VAT. Sub-clauses (ii) and (iii) prescribed the benefits
available to “new” industrial units in the relevant categories, whereas
sub-clause (iv) specifically addressed “existing” industrial units
undertaking “expansion, modernisation or diversification”. The latter
provision is of particular relevance because the Petitioner’s claim is
founded upon the “expansion” of an industrial undertaking which was
already in existence when the policy came into force.
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40


4. According to the Petitioner, investment in the expansion project
commenced on 6.3.2007 with the purchase of plant and machinery from
Bharat Heavy Electricals Limited. The Petitioner claims to have
invested approximately 585.57 crore up to 31.12.2010. The installed
₹
capacity of the unit was thereafter enhanced from 0.96 million tonnes
per annum to 2.5 million tonnes per annum, and commercial
production following the expansion commenced on 1.1.2011. The
petitioner relies upon these particulars to contend that the investment
was made after the effective date of IPR 2007 and resulted in a
substantial increase in the production capacity of the unit.
5.
On 29.6.2011, the petitioner submitted applications before the General
Manager, District Industries Centre (DIC), seeking, inter alia ,
recognition as a Thrust Sector industry under IPR 2007. Upon
inspection, the General Manager, DIC, issued a status report dated
5.7.2011 recording that the unit could be considered under the Thrust
Sector for incentives under the policy. The certificate of verification
issued on the same date recorded fixed capital investment of ₹ 585.57
crore and direct employment of 118 persons. It further stated that the
unit satisfied the prescribed criteria for a downstream Thrust Sector
industry. The inspection report was also to the same effect.
6. The claim was thereafter taken up by the concerned authorities. On
8.8.2011, the General Manager, DIC, forwarded the petitioner’s claim
for VAT reimbursement to the Industrial Promotion and Investment
Corporation of Odisha Limited (IPICOL), opposite party No. 4.
Subsequently, the Regional Industries Centre (RIC), Sambalpur,
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

conducted an inspection on 7.6.2012 and submitted its report on
23.6.2012. The report recorded that the unit was effectively engaged in
value addition of waste products, with slag accounting for 52.6 per cent
and fly ash for 26.2 per cent of the material recorded in the inspection.
The RIC requested issuance of a certificate recognising the unit as a
downstream industry.

7. The General Manager, DIC, also communicated with the Commercial
Tax Officer in October 2012, stating that the unit could be considered
for VAT reimbursement under Clause 18.4 of IPR 2007. The Assistant
Commissioner of Sales Tax certified payment of net VAT amounting to
₹ 50,75,34,438 for the financial year 2011-12. The claim was thereafter
forwarded to the Director of Industries. On 4.7.2013, the General
Manager, DIC, again forwarded the claim for the financial year 2011-12
to IPICOL for sanction, noting that the claim for the first year had
already been recommended on 8.8.2011.
8. By communication dated 17.10.2013, IPICOL informed the Director of
Industries that VAT reimbursement might be applicable to the
petitioner under Clause 18.4(iv), subject to issuance of a Priority Sector
certificate, and requested a decision in the matter. The General
Manager, DIC, subsequently forwarded the petitioner’s claim for the
financial year 2012-13 on 15.11.2013. Thus, the claim had been
examined by the inspecting authorities and had moved through the
administrative machinery well before the impugned letter was issued.
Pertinently, however, the record, does not disclose that a final order
sanctioning a specified amount of reimbursement had been passed.
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40


9. On 3.3.2015, the Government amended the definition of “Downstream
Industry” in Annexure-I to IPR 2007 by introducing a requirement that
a minimum of 50 per cent by weight of the relevant intermediate, final
or waste products of industrial undertakings be utilised as base raw
material. The amendment was stated to take immediate effect.

10. On the following day, i.e., 4.3.2015, the Additional Director of
Industries issued the impugned letter bearing No. 2294/Ind. The
petitioner was informed that its application for Thrust Sector status
could not be considered as the unit was not a ‘new’ industrial unit. The
letter further stated that the matter was under active consideration of
the Government for a necessary amendment and that the claim would
be processed thereafter. The present writ petition was instituted on
17.4.2015, challenging the withholding of the claim and seeking grant
and disbursement of VAT reimbursement under IPR 2007.
11. During the pendency of the writ petition, the Government issued the
Resolution dated 9.12.2015 deleting the word “new” from Serial Nos.
17 and 19 of Annexure-I to IPR 2007, with effect from 2.3.2007. The State
itself referred to this Resolution in paragraph 57 of its counter affidavit,
although a copy was not annexed thereto. The petitioner subsequently
placed the Resolution on record by filing a memorandum. The
subsequent amendment is thus not a matter extraneous to the
proceedings; it is a development which directly concerns the ground on
which the petitioner’s claim was originally kept in abeyance.


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Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

II. SUBMISSIONS ON BEHALF OF THE PETITIONER:

12. Learned Sr. Counsel appearing for the petitioner submits that the claim
has been withheld on a ground which no longer survives. It is
contended that the Resolution dated 9.12.2015 deleted the word “new”
from the relevant entries in Annexure-I to IPR 2007 with retrospective
effect from 2.3.2007. The petitioner, therefore, cannot be denied
consideration of its claim merely because the original industrial unit
was established before the policy came into force.
13. It is further submitted that Clause 18.4(iv) expressly recognises the
eligibility of “existing” industrial units undertaking expansion,
modernisation or diversification. The petitioner commenced its
expansion after IPR 2007 came into force and made substantial
investment in plant and machinery, resulting in an increase in installed
capacity from 0.96 million tonnes per annum to 2.5 million tonnes per
annum. It is argued that the claim must be examined with reference to
the expansion and the increased commercial production resulting
therefrom, rather than by treating the date of establishment of the
original unit as conclusive of its eligibility.

14. Reliance is placed upon the status report and certificate of verification
dated 5.7.2011 issued by the General Manager, DIC, as well as the
report of the RIC, Sambalpur dated 23.6.2012. According to the
petitioner, these documents establish that the investment and
employment criteria prescribed for a downstream Thrust Sector
industry were satisfied and that the unit was engaged in value addition
of waste products. The petitioner also relies upon the subsequent
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

correspondence of the General Manager, DIC, and IPICOL to submit
that its claim was processed and recommended for consideration, and
was not rejected on account of any deficiency in investment or
employment.
15.
It is also submitted that the amendment dated 3.3.2015 to the definition
of a downstream industry does not disentitle the petitioner from the
benefit claimed. The RIC’s report records the use of slag at 52.6 per cent
and fly ash at 26.2 per cent. It is contended that the unit’s manufacturing
activity cannot be equated with that of a low-investment grinding or
mixing unit merely because the process of manufacturing cement
involves grinding or mixing. The nature of the activity, the substantial
investment in plant and machinery and the recorded utilisation of
industrial waste products must, according to the petitioner, be
considered together.
16. Learned counsel also relies upon the judgment of this Court
1
in Ultratech Cement Limited v. State of Odisha . It is submitted that
this Court examined the application of the Negative List under IPR 2007
to cement manufacturing activity and found the State’s classification of
the unit as a standalone grinding unit to be misconceived in the facts of
that case. The challenge to the said judgment before the Hon’ble
Supreme Court was dismissed on 14.10.2022 and the same has thus
attained finality. The petitioner contends that the reasoning adopted in
the said judgment is applicable to the present dispute and seeks a

1

2022 SCC OnLine Ori 13
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

direction for grant and disbursement of the reimbursement admissible
under the policy.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:
17. The State, in its counter affidavit filed on behalf of Opposite Party Nos.1
to 3, has opposed the claim of the Petitioner on the ground that the unit
does not satisfy the eligibility criteria prescribed under the Industrial
Policy Resolution, 2007 (IPR 2007). It is contended that the Petitioner
acquired M/s. IDCOL Cement Ltd., Bargarh, on 22.12.2003, which was
subsequently merged with ACC Ltd. with effect from 6.12. 2005. Since
IPR 2007 came into force on 2.3.2007, the State submits that the
Petitioner cannot be treated as a “New Industrial Unit”, its first fixed
capital investment having been made prior to the effective date of the
policy. Although the State acknowledges that the Petitioner made its
first fixed capital investment towards expansion on 6.3.2007 and
commenced production following expansion on 1.1.2011, it maintains
that such expansion does not, by itself, confer entitlement to VAT
reimbursement.

18. It is further contended that the Petitioner does not fulfil the
requirements of either the Priority Sector or the Thrust Sector as defined
under Annexure-I to IPR 2007. According to the State, the Petitioner
does not satisfy the requirement of being a new industrial unit and,
therefore, cannot claim the incentives available to units falling within
those categories. The State submits that even if the Petitioner’s unit is
considered to have acquired downstream status following expansion,
it would not be eligible for VAT reimbursement under Clause 18.4, as
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

it does not fall within the prescribed categories. The State has also
denied that the General Manager, District Industries Centre, Bargarh,
had given any assurance regarding the grant of incentives to the
Petitioner.
19.
The State has further submitted that the grant of incentives is governed
by the conditions stipulated under IPR 2007 and that only industrial
units satisfying those conditions can claim the corresponding benefits.
It is accordingly contended that the Petitioner is not entitled to
reimbursement under Clause 18.4 of the policy.
IV.
THIS COURT’S REASONONG AND ANALYSIS:
20.
Having heard learned counsel for the parties and perused the materials
on record, the following questions arise for consideration:
(i) Whether, and to what extent, the decision in Ultratech
Cement Ltd. v. State of Odisha applies to the Petitioner’s
claim for VAT reimbursement under IPR 2007.
(ii) Whether the Petitioner is entitled to consequential
relief in respect of its claim for VAT reimbursement under
Clause 18.4(iv) of IPR 2007.

21. The Petitioner relies upon the decision in Ultratech Cement (supra) , to
contend that its claim for VAT reimbursement is covered by the said
judgment. The State, however, disputes the Petitioner’s eligibility
under IPR 2007. The applicability of Ultratech Cement (supra) must,
therefore, be examined in the context of the facts of the present case.

22. In Ultratech(supra) , this Court considered the State’s treatment of a
cement manufacturing unit as a standalone grinding unit falling within
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

Serial No. 51 of the Negative List under IPR 2007. The Court examined
the nature of the manufacturing activity and held that the classification
could not be sustained merely by describing the unit as a grinding unit,
without considering the activity undertaken and the value addition
involved. The decision supports the principle that the classification of
an industrial undertaking cannot rest merely on the description of one
process forming part of its manufacturing activity. The judgment is
relevant to the present case to this extent: the Petitioner’s unit cannot
be classified by reference to grinding or mixing alone, without
examining its actual operations and the applicable policy provisions.
23. ( )
The facts, however, are not identical. In Ultratech supra the unit had
obtained the relevant eligibility and Thrust Sector certificates, and VAT
reimbursement had been sanctioned before the State sought to
withdraw the benefit. In the present case, the Petitioner’s claim had not
culminated in a final sanction. Ultratech ( supra ) cannot, therefore, be
treated as conclusively establishing the Petitioner’s entitlement to
reimbursement. The Petitioner’s claim must be examined on the basis
of its own record and the provisions of IPR 2007.

24. The record shows that the Petitioner acquired M/s. IDCOL Cement
Ltd., Bargarh, on 22.12.2003, and the unit was merged with the
Petitioner with effect from 6.12.2005. Its installed capacity before
expansion was 0.96 million tonnes per annum. IPR 2007 came into force
on 2.3.2007, and the Petitioner’s first fixed capital investment towards
expansion was made on 6.3.2007, through the purchase of machinery
worth ₹ 72,68,352 from BHEL, Hyderabad. The total investment
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

recorded up to 31.12.2010 was ₹ 585.57 crore. Following expansion, the
installed capacity increased to 2.5 million tonnes per annum, and
commercial production commenced on 1.1.2011.
25. The claim relates to the expansion undertaken after IPR 2007 came into
force, and not merely to the original unit acquired in 2003. More
importantly, the impugned letter dated 4.3.2015 did not reject the claim
upon a finding that the investment, employment or production
requirements had not been met. It declined to consider the application
for Thrust Sector status on the ground that the unit was not a new
industrial unit.
26.
That objection must be considered in the light of the Government
Resolution dated 9.12.2015, which deleted the word “new” from Serial
Nos. 17 and 19 of Annexure-I to IPR 2007 with effect from 2.3.2007. The
amendment was thus made retrospective. The State has itself referred
to the Resolution in its counter affidavit. The ground stated in the
impugned letter, therefore, cannot survive as a basis for declining
consideration of the Petitioner’s claim.

27. The contemporaneous verification material also requires consideration.
On 5.7.2011, following inspection, the General Manager, DIC, issued a
status report stating that the unit might be considered under the Thrust
Sector for incentives under IPR 2007. The accompanying Certificate of
Verification recorded capital investment of 585.57 crore, direct
₹
employment of 118 persons, and that the unit satisfied the criteria for a
downstream Thrust Sector industry. The General Manager, DIC,
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

thereafter forwarded the Petitioner’s claim for VAT reimbursement to
IPICOL on 8.8.2011.
28. The RIC, Sambalpur, inspected the unit on 7.6.2012 and, in its report
dated 23.06.2012, recorded that the unit was engaged in value addition
of waste products. The report recorded the use of slag at 52.6 per cent
and fly ash at 26.2 per cent and requested issuance of a downstream
industry certificate. The figures assume significance in view of the
Resolution dated 3.3.2015, which introduced a requirement of
minimum 50 per cent utilisation by weight of the relevant intermediate,
final or waste products as base raw material. Slag alone was recorded
at 52.6 per cent. The report, therefore, provides material support for the
Petitioner’s claim under the amended definition, though the other
applicable criteria must also be considered.

29. The subsequent correspondence however, does not establish that
reimbursement was finally sanctioned. By its communication dated
17.10.2013, IPICOL stated that reimbursement might be applicable
under Clause 18.4(iv), subject to issuance of the requisite certificate, and
sought a decision from the Director of Industries. This correspondence,
read with the inspection and verification reports, shows that the claim
was under consideration and that the requisite status determination
remained outstanding. It does not, however, dispense with the need to
determine the amount admissible under the policy.
30.
The distinction between the two cases must accordingly be maintained.
Ultratech(supra) does not entitle the Petitioner to automatic
reimbursement merely because both cases concern cement units. It
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

does, however, support the requirement that the nature of the
industrial activity be examined before applying the Negative List. In
the present case, that examination must also take account of the
investment made in the expansion, the increased capacity, the use of
waste products and the findings recorded by the inspecting authorities.
The Petitioner’s claim cannot be rejected merely by describing the unit
as one involving grinding or mixing.
31. The combined effect of the record and the subsequent Resolution dated
9.12.2015 is that the Petitioner’s claim requires determination under the
applicable provisions of IPR 2007, and cannot be declined on the
ground that the original unit was not new. The existing reports provide
substantial material in support of the Petitioner’s claim to downstream
Thrust Sector status. The competent authority must consider those
reports and the applicable criteria, and identify any specific
requirement which remains unfulfilled, if that is its conclusion.
VI. CONCLUSION :

32. The impugned letter dated 4.3.2015 is accordingly set aside insofar as it
declines consideration of the Petitioner’s application on the ground that
the unit is not a new industrial unit.
33. The competent authority shall first consider the Petitioner’s claim for
recognition as a downstream Thrust Sector industry in light of the
Certificate of Verification dated 5.7.2011, the RIC report dated
23.6.2012, and the Resolutions dated 3.3.2015 and 9.12.2015. The
findings recorded in the inspection and verification reports shall be
duly considered. The claim cannot be rejected merely on the ground
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40

that the original unit was established before IPR 2007 or that the
manufacturing process involves grinding or mixing. If the authority
finds any prescribed eligibility criterion to remain unfulfilled, it shall
identify that criterion and record specific reasons denying such claims
with reference to the material on record.

34. In the event such determination with regard to it being a downstream
“Thrust Sector industry” is in the affirmative, the authorities shall
process the claim for VAT reimbursement under Clause 18.4(iv) of IPR
2007 and determine the amount, if any, admissible in respect of
increased commercial production, after accounting for the net VAT
paid following adjustment of input tax credit, the applicable percentage
and the prescribed ceiling. The exercise shall be completed by a
reasoned order within 3 months from receipt of this judgment. Any
amount found admissible, if any, shall be released within four weeks
thereafter.
35. The Writ Petition is allowed in the above terms. There shall be no order
as to costs.


(Dr. Sanjeeb K Panigrahi)
Judge

Murahari Sri Raman, J.- I agree


(Murahari Sri Raman)
Judge
Orissa High Court, Cuttack,
th
Dated the 16 October, 2026/-

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Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 16-Oct-2026 21:05:40