1989 (10) TMI 123 - HC - Income Tax

Issues Involved:
1. Validity of the provisional certificate for renewal of the Export House Certificate.
2. Interpretation of paragraph 180(2) of the Import and Export Policy regarding the 20% growth rate requirement.
3. Compliance with other requirements for renewal, including submission of certified export statements.

Detailed Analysis:

1. Validity of the Provisional Certificate for Renewal:

The first issue concerns whether the provisional certificate issued to the Petitioner before the application date fulfills the requirements of the Import and Export Policy for renewal of the Export House Certificate. The Petitioner had a provisional certificate dated 29-3-1982 and a permanent certificate dated 7-5-1982. Respondents argued that the permanent certificate should have been issued before 1st April 1982 as per paragraph 176(b) of the Relevant Policy. However, the Court found this interpretation too narrow. The Court noted that the Relevant Policy only required the industry to be registered before 1st April 1982, which was satisfied by the provisional certificate. Therefore, the first ground for denying the renewal was invalidated.

2. Interpretation of Paragraph 180(2) Regarding the 20% Growth Rate:

The second issue revolves around the interpretation of paragraph 180(2) of the Relevant Policy, which mandates a 20% annual average growth rate for renewal. Respondents argued that the growth rate should be compared between the base period (1979-82) and the pre-base period (1976-79). The Petitioner contended that the comparison should be within the base period itself or, alternatively, between the last year of the base period (1981-82) and an adjusted three-year period including the last year of the pre-base period.

The Court upheld the Petitioner's interpretation, stating that the first mode of calculation involves comparing the annual average growth within the base period itself. The alternative mode involves comparing the last year of the base period (1981-82) with an adjusted three-year period (1978-79, 1979-80, and 1980-81). The Court found that the Petitioner's figures for the base period satisfied the 20% growth rate requirement, thus entitling him to renewal.

3. Compliance with Other Requirements:

The Petitioner addressed the remaining two deficiencies cited by the Respondents: the lack of certified export statements for the pre-base period and details of whether exported goods were manufactured by Small Scale Industries (SSI). The Petitioner provided the necessary certified export statements and clarified that the goods were manufactured by SSI. The Respondents accepted that these requirements were met, leaving only the first two grounds for consideration.

Conclusion:

The Court concluded that the Petitioner satisfied all requirements for renewal of the Export House Certificate. The Respondents' denial based on the provisional certificate and the 20% growth rate interpretation was unfounded. The Court ordered the renewal of the Export House Certificate and set aside the Respondents' orders dated 13-8-1982 and 16/17-11-1982. The application dated 26-5-1982 was deemed granted, and the Respondents were directed to renew the certificate within two weeks.

Stay of Execution:

The execution of this order was stayed for two weeks upon the Respondents' request.

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