1996 (1) TMI 400 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the term "plant" for the purpose of granting deferment of tax.
2. Whether bottles and crates used in manufacturing soft drinks qualify as "plant" under the deferment scheme.
3. Compliance with pleading and evidentiary requirements in a writ petition.

Detailed Analysis:
Issue 1: The petitioners sought a direction to grant permission under rule 42(7) of the Bihar Sales Tax Rules, 1983, and exemption from using form No. XXVIII-B, specifically focusing on the deferment of tax. The central issue was whether bottles, crates, electrification, and tools used in the manufacturing process could be considered as "plant" under the deferment scheme.

Issue 2: The petitioners argued that the term "plant" should be interpreted broadly to include bottles and crates based on precedents like Commissioner of Income-tax v. Sri Krishna Bottlers Pvt. Ltd. and Commissioner of Income-tax v. Jai Drinks (P) Ltd. The government advocate contended that the items in question did not qualify as "plant" under the Bihar Sales Tax Supplementary (Deferment of Tax) Rules, 1990, as they were not classified as plant and machinery. The Court analyzed various definitions of "plant" from dictionaries and legal precedents to determine its common parlance meaning in the context of the case.

Issue 3: The Court emphasized the importance of pleading and proving facts in a writ petition. It cited the case of Bharat Singh v. State of Haryana to highlight the requirement of annexing evidence in a writ petition or counter-affidavit. The Court concluded that the respondents' arguments in written notes, which were not supported by evidence or pleaded in a counter-affidavit, could not be entertained.

Conclusion: The Court held that bottles and crates used in manufacturing soft drinks qualified as "plant" for the purpose of deferment of tax, overturning the District Level Committee's decision. The Court allowed the writ application, directing the concerned respondent to grant exemption for deferment of sales tax in respect of the investment made by the petitioners towards bottles and crates. The parties were ordered to bear their own costs, and the writ petition was allowed.