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TMI Blog1997 (11) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... had gone into commercial production thereafter. The twin circumstances are sufficient to get the benefits. The Project Manager, District Industries Centre, Rourkela (opposite party No. 3) (in short, DIC ) certified that the petitioner was entitled to exemption from payment of sales tax on purchase of raw materials and sale of finished products under the IPR. By letter dated September 28, 1996, petitioner requested the concerned Sales Tax Officer for issuing form I-D in order to enable it to avail said exemption. By letter dated November 18, 1996, opposite party No. 4 rejected the application on the ground that in terms of S.R.O. No. 789 of 1990, the Finance Department in Orissa Gazette dated August 16, 1990 indicated that only those units which started commercial production between December 1, 1989 and November 30, 1994 are eligible to avail the benefit of tax exemption under the IPR. As commercial production was started with effect from May 18, 1995 as revealed from the certificate issued by the DIC, the benefits under the IPR relating to exemption on payment of tax as provided under section 6 of the Act are not available to the petitioner. 3.. Petitioner s stand is that the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etting up is perhaps a stage anterior to the commencement of the factory. Thereafter, the High Court referred to a decision of the Bombay High Court in Western India Vegetable Products Ltd. v. Commissioner of Income-tax, Bombay City [1954] 26 ITR 151; AIR 1955 Bom 13 and, on its basis, concluded that the proper meaning to be assigned to the expression set up in section 5(1)(xxi) would be ready to commence business . We are unable to agree with the learned counsel for the Commissioner that, in arriving at this view, the High Court committed any error. A unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up. It is only when the unit has been put into such a shape that it can start functioning as a business or a manufacturing organisation that it can be said that the unit has been set up. The expression used in the proviso, under which the period for which the exemption is available is to be determined, is not the same as that used in the principal clause. In the proviso, the period of five successive years of exemption has to commence with the assessment year next following the date on which the company commences operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mall-scale industrial units as certified by the concerned General Manager, District Industrial Centre, irrespective of change in the ownership, if any, medium and large industrial units will be eligible for similar benefits for a period of seven years in the districts of Phulbani, Bolangir and Kalanandi and for five yearsin other districts from the dataof increased commercial raw materials, that is to say, goods which directly go into the composition of the finished products; (a) (b) Spare parts of machinery used in the industry for producing goods; (c) Packing materials required for packing the finished products in the same form as manufactured by the industries. When sold to or purchased by a registered dealer of existing khadi/village/cottage/small-scale/medium and large industrial units for expansion/ modernisation/diversification, taken up on or after the 1st December, 1989 to the extent of increased commercial Production over and above the existing installed capacity which shall be allowed once within the entire effective period: Provided that such expansion/modernisation/diversification had been undertaken on the basic of separate project report which has been duly approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of denying benefit under the IPR is unsustainable. 7.. The stand of the Revenue as has been indicated above is that the decision of the apex Court in Commissioner of Wealth-tax, Madras [1967] 63 ITR 478 (SC); AIR 1967 SC 509, has the effect of eclipsing any other intendment flowing from any notification in any other statute. At this juncture it is to be noticed that the stand taken by the Sales Tax Officer in the counter-affidavit is different from what is pleaded by the learned counsel for the Revenue at the time of hearing. The concept of eclipse has been introduced for the first time during argument. 8.. There has to be strict construction of a provision concerning exemption. There is consensus of judicial opinion that exemptions from taxation have a tendency to increase the burden on the other unexempted class of tax-payers, and should be construed against the subject in case of ambiguity. It is a wellknown principle that a person who claims an exemption has to establish his case. In Collector of Central Excise, Bombay-I v. Parle Exports (P) Ltd. [1989] 75 STC 105 (SC); [1989] 1 SCC 345, it was observed by the apex Court that while interpreting an exemption clause, lib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. R. Kondiah AIR 1979 SC 1132, it is not a sound principle of construction to interpret expressions used in one Act with reference to their use in another Act, more so if the two Acts in which the same word is used are not cognate Acts. Neither the meaning nor the definition of the term in one statute affords the mode of construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally. It is sound, and indeed, a well-known principle of construction that meaning of words and expression used in one Act must take their colour from the context in which they appear. As a general principle of interpretation, where the words of a statute are plain, precise and unambiguous, the intention of the Legislature is to be gathered from the language of the statute itself, and external aid is not admissible to construe those words. It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more than one meaning or shades or meaning, that external aid as to the evils, if any, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to it for the purposes of that Act alone. Macbeth v. Chislett: [1910] AC 220, 223 . 11.. It is well-established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different but that is not the case here. In this connection, we may refer to the observations of Lord Watson in Salomon v. Salomon and Co. [1897] AC 22 at page 38: Intention of the Legislature is a common but very slippery phrase which, popularly understood, may signify anything from intention embodied in positive enactment to speculative opinion as to what the Legislature probably would have meant, although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incumbent is entitled or getting the benefits under IPR of 1989, same shall be continued but no fresh benefit under the new IPR s shall be available. That being the position, the stand of the Revenue to support its refusal to issue form ID is indefensible. Entries 26-FF and 30-FFF are consequentially of no assistance to it. 13.. A faint attempt was made by the learned counsel for the Revenue to submit that the petitioner instead of coming before this Court in a writ application ought to have approached the revisional authority as prescribed under the statute. It is, however, fairly accepted that a large number of cases involving similar disputes are coming up before the courts and revisional authority, and interpretation if any by this Court would reduce multiplicity of litigation. In that view of the matter, the existence of alternative remedy is considered to be of no consequence. 14.. In the result, the writ application succeeds. We direct the Sales Tax Officer, Rourkela II Circle (opposite party No. 4) to issue form ID to the petitioner as applied for if the application is otherwise in order within two weeks from today. There shall be no order as to costs. S.C. DATTA, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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