Putting an end to confusion prevailing over the status of automobile repair and service centres as industrial activity, the UT administration has set aside an order of the estate office that had imposed penalty of Rs. 7.54 crore on Berkeley Automobiles Limited for using a plot in Industrial Area for such a service centre.
With the November 5 orders of UT finance secretary VK Singh, people running automobile services centres in Industrial Area can heave a sigh of relief as a large number of such centres have been served with similar misuse notices. There are around 50 such registered centres.
Berkeley Automobiles was served with a showcause notice on June 26, 2009, for allegedly misusing the plot by running a service centre, and on March 3, 2011, the company was asked to pay Rs. 7.54 crore as misuse charges. Subsequently, the company filed an appeal before finance secretary.
SK Jain and Vikas Jain, counsels for the firm, argued that the notice was issued under Chandigarh Estate Rules 2007 that were not applicable to the plot on the date of issue of the notice, as the estate rules came into effect on November 7, 2007. They further pleaded that the finance department had, on March 11, 2010, passed an order that “automobile service station with denting and painting” are eligible for registration as “industry-related service enterprises”. Vikas Jain further said that state rules are not applicable till they are approved by Parliament, and the Chandigarh Estate Rules 2007 remain to be approved by Parliament.
It is pertinent to mention here that in a communiqué on October 9, the finance department had declared automobile repair “non-feasible” in both phases of Industrial Area. It had also found warehousing as non-feasible. That had led to some confusion as the finance department had earlier allowed service centres.
The administration had set up the two-phase Industrial Area in the 1970s on 147 acres. Plots are originally for manufacturing units, and, for using land for commercial purposes other than manufacturing, one has to get permission.