The Supreme Court today stayed the Allahabad High Court’s order directing the Uttar Pradesh government to reconsider its decision to deny tax benefits to country’s largest sugar producer, Bajaj Hindusthan, under its industry promotion policy.
A bench comprising justices Dalveer Bhandari and S S Nijjar stayed the orders of the high court, which on November 16, 2010, had directed the state cane commissioner to reconsider its decision on the company under Sugar Industry Promotion Policy. The apex court also issued notice to Bajaj Hindusthan and directed it to file its reply within two weeks.
Meanwhile, the counsels appearing for the state government have assured the apex court that no coercive action would be taken against the company for recovery of tax. The Court’s direction came over a petition filed by the state government challenging the orders of the high court. The cane commissioner had on March 3, 2010, declined the claims of tax exemption on the ground, that the company had passed a resolution on December 26, 2007.
It had also said the company’s resolution was not presented through an authorised officer and that the documents relating to capital investment of the relevant period were incomplete. It noted, according to the requirement of the policy, Bajaj Hindusthan had failed to produce a certificate of employing more than 1,000 persons and no evidence was submitted relating to payment to the farmers for purchase of sugar cane.
Net down 32%
Bajaj Hindusthan today reported a 32 per cent decline in its net profit to Rs 57.9 crore for the quarter ended December 31, 2010 on high input cost.
The firm posted a net profit of Rs 85.2 crore in the year-ago period. However, the total income more than doubled to Rs 1,483 crore during the first quarter of 2010-11 financial year as against Rs 629 crore in the corresponding period of the previous year, according to a filing on the BSE. Expenditure rose to Rs 1,300 crore from Rs 466 crore in the period under review, mainly due to a sharp rise in cost of raw materials. The company has fourteen sugar plants, which are all located in Uttar Pradesh with an aggregate sugarcane crushing capacity of 136,000 TCD and distillery capacity of 800,000 litres of alcohol per day.
