An expansion-based VAT claim cannot be rejected solely because the original unit predates IPR 2007.

ACC acquired IDCOL Cement Ltd., Bargarh, in 2003; the unit was merged with ACC in 2005.

After IPR 2007 took effect on 2 March 2007, ACC invested in an expansion that increased the unit’s capacity from 0.96 to 2.5 million tonnes per annum, with commercial production commencing on 1 January 2011.

ACC sought Thrust Sector recognition and VAT reimbursement under IPR 2007.

DIC and RIC reports recorded substantial investment and employment, downstream activity, and use of slag and fly ash; the claim was forwarded for consideration, but no final reimbursement sanction was issued.

On 4 March 2015, the Additional Director of Industries declined to consider the Thrust Sector application because the unit was not “new”.

During the writ proceedings, the Government deleted “new” from relevant Annexure-I entries with retrospective effect from 2 March 2007.

ACC sought relief under Articles 226 and 227 of the Constitution.

1. Whether, and to what extent, the decision in *Ultratech Cement Ltd. v. State of Odisha* applied to ACC’s claim for VAT reimbursement under IPR 2007.

2. Whether ACC was entitled to consequential relief concerning its claim for VAT reimbursement under Clause 18.4(iv) of IPR 2007.

Clause 18.4(iv) of IPR 2007 addresses VAT reimbursement for existing industrial units undertaking expansion, modernisation or diversification; eligibility and reimbursement remain subject to the policy’s applicable criteria and limits.

The Government’s Resolution dated 9 December 2015 deleted “new” from specified Annexure-I entries retrospectively from 2 March 2007, removing the original-unit-is-not-new ground as a basis for refusing consideration.

The Resolution dated 3 March 2015 amended the definition of “Downstream Industry” to require minimum 50 per cent utilisation by weight of relevant intermediate, final or waste products as base raw material.

Under *Ultratech Cement Ltd. v. State of Odisha*, a cement unit’s classification cannot rest merely on describing one part of its manufacturing process as grinding; the actual activity and value addition must be examined.

That precedent does not itself establish entitlement to reimbursement where no final sanction has been made.

The Court found that ACC’s claim concerned post-policy expansion and that the impugned letter rejected consideration on the ground that the original unit was not new—not because investment, employment or production criteria had been found unmet.

The retrospective 2015 Resolution displaced that ground.

The DIC and RIC reports supplied relevant evidence supporting downstream Thrust Sector status, including recorded slag use of 52.6 per cent, but did not amount to a final eligibility determination or reimbursement sanction.

*Ultratech* required the authorities to assess the unit’s actual operations rather than classify it solely by reference to grinding or mixing, but did not compel automatic payment.

The competent authority therefore had to reconsider eligibility against the reports and applicable policy criteria, and, if eligibility were established, calculate reimbursement under Clause 18.4(iv).

The competent authority must determine ACC’s downstream Thrust Sector status, consider the specified reports and resolutions, and give specific reasons if any eligibility criterion remains unmet.

If eligibility is established, the authorities must determine any reimbursement admissible for increased commercial production, accounting for net VAT paid after input-tax-credit adjustment, the applicable percentage and prescribed ceiling.

The exercise must be completed by a reasoned order within three months of receipt of the judgment, with any amount found admissible released within four weeks thereafter.

No costs were awarded.