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TMI Blog1990 (3) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the petitioner that it invested nearly Rs. 6,77,000 initially and as per exhibit P1 he was granted tax concession or exemption for an amount of Rs. 5,10,163, which represents 90 per cent of the total fixed capital investment. The petitioner claims that it additionally invested Rs. 7,81,344 between August, 1988 and December, 1988 and hence it again approached the General Manager, District Industries Centre for a certificate. Then the petitioner was granted exhibit P2 granting sales tax exemption for Rs. 6,82,492 for the period commencing from December 13, 1988 to December 14, 1990. The petitioner claims that this concession of Rs. 6,82,492 granted under exhibit P2 should also be spread over the entire period from December, 1985 to December, 1990. It further claims that it submitted returns for the years, 1987-88, 1988-89, and the petitioner was surprised to receive exhibit P3 notice without granting it the exemption, and without giving credit for the exemption to which it is entitled. It is also stated that the second respondent threatened to impose a penalty of Rs. 10 lakhs for the assessment years 1987-88 and 1988-89 for its failure to pay tax. The petitioner contends that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. The original petition was accordingly disposed of. Exhibits P2 and P3 were not quashed by the learned single Judge. 5.. Aggrieved by the same, the present appeal is filed. In this appeal, Shri N.N. Venkitachalam contends that under G.O. Ms. No. 74/80/TD dated September 29, 1980 and the language of S.R.O. No. 968/80, there is no scope or power for prescribing in which years the exemption is to be enjoyed. The exemption is one which can be spread over throughout the five years. The notification does not lay down that the tax concession or exemption can be granted only after the additional investment is made. He contends that if the investment is made in the five year period, the total exemption should be spread over the five years. He contends that the notification does not contemplate exemption being enjoyed only subsequent to the investment. It is not open to the General Manager, District Industries Centre, to specify the period during which the tax concession or exemption should be granted. He contends that this being a taxation statute, a liberal interpretation should be given to the notification in favour of the assessee. He further contends that the notification only cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it pertains to a fiscal statute; and, (3) whether exhibits P2 and P3 are liable to be quashed as claimed by the petitioner. 8.. Point No. 2: Shri. Venkitachalam s contention that a liberal interpretation should be given to S.R.O. No. 968/80 issued in G.O. Ms. No. 74/80/TD dated September 29, 1980 is not at all correct. It should be remembered that a liberal interpretation should be given for the charging provisions of the taxation statute, but with regard to exemptions from taxation, strict interpretation has to be given. Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Carmel Book Stall [1989] 74 STC 89 (Ker); 1989 (1) KLT 701 is a Division Bench decision of this Court and it clearly lays down the law as follows: 5. It is well-known that exemption in a statute has to be strictly construed. When exemption is claimed they should not be extended beyond the express requirement of the language of the provision. .... Since all exemptions from taxation increase the burden on other members of the community they should be deprecated except to the extent permissible by the express language of the statute itself. In that view of the matter also, the exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the notification but is intended to indicate the general purport). In G.O. (P) No. 386/79/ID dated November 8, 1979 the Government, inter alia, ordered that new industrial units under small-scale industries set up after April 1, 1979 will be exempted from the payment of sales tax for a period of 5 years from the date of production. It is considered necessary to give effect to the exemption mentioned above by the issue of statutory notification under section 10 of the Kerala General Sales Tax Act, 1963. The notification is intended to achieve the above purpose. A reading of the notification clearly indicates that the Government of Kerala considered it necessary in the public interest to give an exemption in respect of tax payable under the Kerala General Sales Tax Act on the turnover of the sale of goods produced and sold by the new industrial units under the small-scale industries for a period of five years from the date of commencement of sale of such goods by the unit. This concession is given subject to several conditions. The two provisos in the notification are very significant. Under the first proviso such units shall produce proceedings of the General Manager, D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the notification is issued, unless, of course, the context requires otherwise. This is the law too. Their Lordships then referred to section 19 of the Kerala Interpretation and General Clauses Act of 1125 and observed that: Where, by an Act, a power to issue any notification, order, scheme, rule, form or by-law is conferred, then expressions used in the notification, order, scheme, rule, form or by-law shall, unless there is anything repugnant in the subject or context, have the same respective meanings as in the Act conferring the power. After referring to these two particular aspects, their Lordships rejected the contention advanced that the exemption provided under notification issued in S.R.O. No. 211/67 under section 10 of the Kerala General Sales Tax Act would entitle the petitioner to claim exemption under Central Sales Tax Act and other Sales Tax Acts. This decision has been reported in [1973] 31 STC 602; 1973 KLT S.N. page 15 (T.C. Vadivel v. Sales Tax Officer). However, this Court had the advantage of seeing the original judgment pronounced by the Division Bench. 12.. It is now admitted by the petitioner that for the exemption given in exhibit P1 he has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the interpretation given by Shri. Venkitachalam is to be accepted, the total exemption to which he would be entitled to avail would come to Rs. 45 lakhs. This interpretation seems to be one which is possible only when the second proviso in the notification is not there. The second proviso which fixes the limits for the sales tax concession clearly postulates that the cumulative sales tax concession shall not exceed 90 per cent of the cumulative gross fixed capital investment. This argument of Shri. Venkitachalam cannot be countenanced as it offends against the very wording of the notification which gives the concession. 14.. The learned single Judge exhaustively dealt with the scope of the notification and the provisos in his judgment and pointed out the significance of the words at any point of time and the words cumulative sales tax concession , and then explained that the petitioner enjoyed the concession fully in a span of two years and the additional investment was made in the fourth year and hence the additional concession can be claimed only after the investment is made. He is not entitled to claim additional concession for the previous year. The learned single Judg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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