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TMI Blog1999 (8) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... of nine years from the date of its commercial production, namely, September 26, 1995; (c) Issue an appropriate writ, order or direction restraining the respondents from realizing the sales tax and purchase tax from September, 1995 till date both under the Central Sales Tax Act, 1956 and Himachal Pradesh General Sales Tax Act, 1968. 3.. The case of the petitioners is that it is a public limited company incorporated under the Indian Companies Act, 1956 and it is carrying on the business of manufacture and sale of cement under the name and style of Ambuja Cement in the State of Himachal Pradesh and that it is amongst one of the best managed cement companies in India and it is also claimed that it had been conferred various prestigious awards for its performance, pollution control and management including the award in the year 1991 by the Prime Minister of India, namely, National Award for Public Recognition of Outstanding Activity for prevention of control of pollution . 4.. The petitioners claim to have submitted an application in the year 1989 for setting up a cement plant in Himachal Pradesh and that it was approved by the State Level Industrial Projects and Review Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate registering the petitioner-unit as a prestigious unit vide annexure VI. Inasmuch as the production of the unit could not be commenced by January, 1995, which was one of the stipulated conditions, taking into account the substantial progress made by the petitioner-company, the Industries Department by its letter dated January 28, 1995 approved the grant of further extension initially till June 30, 1995 and thereafter up to September 30, 1995 by their letters dated January 28, 1995 and June 30, 1995, respectively, filed as annexure VII. On December 1, 1994, the Industries Department made further amendments to the notifications dated March 27, 1991 and July 31, 1992 and brought into existence the concept of prestigious cement unit , according to which the unit must go into commercial production after May 1, 1992 and registered with the empowered committee under rule 24 between May 1, 1992 and March 31, 1995. By the said amendment, it was also notified that such unit should have a fixed capital of Rs. 50 crores and employed at least 200 persons on regular basis vide annexure VIII. 6.. In the light of all these, the Excise and Taxation Department issued a notification dated De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat since the petitioner-unit was already registered as a prestigious unit on January 13, 1993 in accordance with the notification issued by the State Government on July 31, 1992 by the empowered committee in its meeting held on November 25, 1992 and inasmuch as the requirements of the prestigious unit and the prestigious cement unit were absolutely one and the same, the petitioner unit was mentioned and referred to in the notification dated January 30, 1996 and that a formal declaration was also made by the Industries Department on February 2, 1996 declaring the petitioner to be a Prestigious cement industrial unit keeping in view the satisfaction of all the requisite eligibility criteria by the petitioner-company vide annexure XIV. It is reiterated for the petitioner that their unit fulfilled all the conditions as required under rule 2(rrr), as mentioned in the notification dated July 6, 1995 as well as January 30, 1996 issued by the Industries Department as also the Excise and Taxation Department of the State Government having regard to the fact that the unit has come into commercial production after March 1, 1992, that it was registered with the empowered committee as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated October 24, 1997 filed as annexure XIX after considering all the relevant material on record granting exemption from the payment of sales tax. 10.. While matter stood thus, it is stated for the petitioner that on March 24, 1998 when the BJP-HVC formed a coalition Government in the State of Himachal Pradesh, the Excise and Taxation Minister, who belongs to the political party HVC and the leaders of the said party started issuing number of statements against the petitioner-company by prejudging the issue and questioning the entitlement of the petitioner for exemption under the incentive scheme announced. These statements in the shape of press cuttings have been filed as annexure XX. The petitioner would contend that on account of such extraneous reasons and influence and with ulterior motives, action was initiated by the Commissioner of Sales Tax without any justification in law and in an arbitrary manner proposing to revise the orders passed by the assessing officer, in exercise of the powers conferred under section 31(1) of the Himachal Pradesh General Sales Tax Act, 1968 and for that purpose on April 29, 1998 issued a show cause notice to the petitioner calling upon them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 998, the Sales Tax Officer appears to have passed an order withdrawing the exemption earlier granted to the petitioner and directed the petitioner to pay the sales tax to the tune of Rs. 18.50 crores under the State Act as well as the Central Act. It is stated that since para 1-C of the notification dated January 30, 1996 published on February 6, 1996 prohibited by virtue of clause 5 therein the petitioner from charging tax on the sale of cement manufactured in the new unit and any collection of the sales tax would have exposed the petitioner to penal consequences under section 35 of the State Act, the petitioner-company had not actually collected any sales tax at all and inspite of all these, the petitioner is being made to pay huge amount, which according to the petitioner is an illegal demand on account of the arbitrary, illegal and mala fide nature of the action said to have been initiated by the respondents against the petitioner. Against the order of the Sales Tax Officer dated December 1, 1998, the petitioner appears to have filed an appeal before the Additional Excise and Taxation Commissioner, Himachal Pradesh. The assessing authority in the meantime appears to have issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emedy of appeal would be merely an empty formality in view of the order of the revisional authority, the petitioners have come up before this Court seeking for the reliefs noticed supra. C.W.P. No. 52 of 1999: 11.. The petitioner in this writ petition has prayed for the following reliefs: (a) Issue an appropriate writ, order or direction quashing and/or setting aside the impugned assessment order dated December 1, 1998, issued by the assessing authority and the order dated January 8, 1999 passed by the Additional Excise and Taxation Commissioner-cum-Appellate Authority (SZ) to the petitioner for the assessment year 1997-98; (b) Issue an appropriate writ, order or direction quashing and/or setting aside the orders of the revisional authority dated February 8, 1999 for the assessment years 1995-96 and 1996-97; (c) Issue an appropriate writ, order or direction declaring that the petitioner-company is entitled to full exemption from payment of Central sales tax as well as Himachal Pradesh general sales tax under the exemption notification dated January 30, 1996 for a period of nine years from the date of its commercial production, namely, September 26, 1995; (d) Issue an ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit to be registered as a prestigious cement industrial unit and not otherwise, and the same has to be meticulously insisted upon in order to prevent abuse of the concession. According to these respondents, the category of prestigious unit introduced from July 31, 1992 and prestigious cement unit introduced from December 1, 1994 are two distinct and separate categories with their origin and incentives and the amendment introduced by the notification dated December 1, 1994, which displaced the erstwhile concept of prestigious unit , does not save the action taken under the earlier notification dated July 31, 1992 and, consequently, the notification dated December 1, 1994 substantially alter and virtually supersede the instructions contained in notification dated July 31, 1992 relating to prestigious units and, therefore, compliance with the provisions of rule 22.2.1 as also the provisions of the Himachal Pradesh General Sales Tax Act, 1968 and Central Sales Tax Act, 1956 became inevitable and compulsory. Further, according to these respondents, the claim of the petitioners to have been registered as prestigious cement industrial unit in terms of annexure VI to the Incenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of law but they must establish that they have strictly complied with all the requirements of law to entitle them to claim for the exemption from sales tax under the local as well as Central Sales Tax Acts and the notifications issued thereunder, they being statutory notifications occupying the field to the exclusion of any executive provisions and instructions to the contrary. Adverting to para 2 of the Incentive Rules and para 1-C(2) of the exemption notification, it is contended that the petitioners committed gross violation of the provisions of law on account of claiming for the year 1995-96 concessional rate of Central sales tax without producing the certificate in form RM-II and transferring the cement on consignment basis for more than 10 crores during 1996-97. By way of illustration of further violation on the part of the petitioners, it is also contended that the petitioners contravened the terms of provisional registration certificate issued under the respective Acts incurring liability for levy of penalty in respect of purchases to the tune of Rs. 1.74 crores and odd during the period from 1992-93 to June 30, 1995, that the petitioners failed to furnish C forms con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much as the petitioners industry itself was registered by the empowered committee by the registration certificate dated February 2, 1996. While strongly disputing and denying the allegations of ulterior and extraneous consideration being responsible for passing of the impugned orders, it is contended that the impugned orders have been passed strictly in accordance with law and in public interest and overall interest of Government revenue. According to these respondents, since prior to September 26, 1995 there was no industrial unit in existence and, therefore, even within the meaning of prestigious unit as defined in clause (2)(rrr) of the notification dated July 31, 1992, the eligibility claim of the petitioners unit could not have been considered prior to September 26, 1995. Adverting to the terms of the certificate dated January 13, 1993, it is contended that in substance what was accorded registration certificate was of the proposed unit of the petitioners and the same cannot be construed to mean the registration of a prestigious unit , which existed as a fact or located in Himachal Pradesh and commenced commercial production after April 1, 1991. Adverting to the notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted February 2, 1996 and, therefore, the vital mistakes committed on essential facts disentitle the petitioners to any benefit as claimed by them. Adverting to the change in the Government and the ulterior motives attributed to the authorities in respect of the action taken against the petitioners, it is contended that the order dated May 27, 1997 passed by the assessing authority for the year 1995-96, was said to have been sent to the revisional authority on May 29, 1997 and the same was said to have been scrutinised by the office for ascertaining its correctness on facts and law both under the State as well as Central Acts and that the record was examined and before issuing the revisional notices, a notice dated April 25, 1998 was said to have been issued under section 34 of the State Act to the petitioner for production of the listed documents and tender statements on oath, though on April 29, 1998 after hearing the petitioners notices came to be issued pointing out the illegalities and improprieties. The principle of audi alteram partem was said to have been strictly complied with. It is also contended that the liability to pay sales tax in question is not dependent upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o determination of the purchase tax under section 5-A and the revisional authority had remitted the proceeding to the assessing authority before whom it is said to be pending still. These respondents also reiterate that every registered dealer is obliged to furnish C forms relating to the transactions and non-submission of C forms strikes at the root of the concession of exemption in view of the stipulation contained in para 1-C(2)(v) of the notification dated January 30, 1996. 17.. Respondents Nos. 4, 5 and 7 have also filed a separate reply contending that the Incentive Rules do not confer any rights enforceable in any court of law, that the registration certificate dated February 2, 1996 itself belies the claim of sales tax exemption of the petitioners. These respondents admit the claim of the petitioners that their unit commenced commercial production on September 26, 1995 and made an investment of Rs. 391 crores and provided employment to 353 persons at the time of coming into commercial production, at the same time denying that the petitioners unit is entitled to sales tax exemption from the date of commencement of production inasmuch as by virtue of notifications date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act in view of the provisions contained in section 10 of the Act, which recognised the said concept and provided for registration of the unit even where there is an intention to establish a business-manufacturing or industrial unit. According to the petitioners, the intention to establish is apparent firstly by IPARA registration, thereafter by getting the unit registered both under the Himachal Pradesh General Sales Tax Act and Central Sales Tax Act on February 14, 1992 and taking further steps in this regard, and that the petitioners became registered dealer under both the Acts from February 14, 1992 and complied with the requirements of the notifications. Reliance is also placed on clause (xix) of the notification dated September 25, 1992, which defines unit as an industrial unit , which is registered as a dealer under the Act and by virtue of registration of the petitioners as a dealer under the Act on February 14, 1992, automatically it became an industrial unit . Strong reliance is also placed for the petitioners on the fact that the Government has specifically ordered exemption in favour of the petitioners and another named industry to assert that they have acquired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the petitioners, in the teeth of the certificates by the empowered committee, the petitioners were eligible for incentives and exemptions on the basis of their application dated September 26, 1995 and the factum of registration with the empowered committee on January 13, 1993, which was never disputed by any of the members of the empowered committee, the respondents are not entitled to, at this stage, approbate and reprobate by going behind the various decisions of the empowered committee. The petitioners also pointed out that the stand now taken in the reply filed by the respondents is contrary to the very action taken by the respondents themselves as would be apparent from the minutes of the first and sixth meeting of the empowered committee held on November 25, 1992 and January 23, 1996. It is also contended that the certificate dated February 2, 1996 is only a formal declaration of the decision already taken by the empowered committee on January 23, 1996 and as a matter of fact respondents Nos. 2, 3 and 4 being members of the empowered committee, which dealt with the claim of exemption made by the petitioners, they were estopped from either going behind the same or taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvocate defended the action and impugned orders passed by the respondents. 21.. Shri Shanti Bhushan, learned Senior Counsel contended that the respondents have not properly appreciated the principles, purport, purpose and object underlying the scheme devised to grant various incentives to attract entrepreneurs to locate industries in the backward areas to augment industrialisation not only to improve the economy of the State but also provide more employment opportunities in the State and the venture undertaken by the respondents as also the stand taken in these proceedings are ill-founded and fallacious. The scheme according to the learned Senior Counsel envisages three stages, viz. (a) registration as prestigious unit, (b) grant of the status as such on fulfilling the eligibility criteria and (c) the accord/availing of the entitlement of exemption and other incentives and that the petitioner-unit satisfied all these criteria meticulously and only on being convinced of the fulfilment of the criteria the various authorities granted the required registration, conferment of status and exemptions from time to time at the appropriate stage and no illegality or infirmity vitiated those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incomplete C forms, it is contended for the petitioners that in a case where there is total exemption, the necessity for filing C forms did not arise and that in any event, if at all the alleged lapse may result in denying the assessee only the concessional rate of taxation for the items of sales concerned and the same cannot be dubbed as any violation or contravention of the provisions of the sales tax law concerned to disentitle the petitioners for the exemption granted under the notification. It has been urged finally that something unusual which does not meet the eye has happened in this case to victimise the petitioners and that the respondents seem to have proceeded in the matter with a prejudged mind and predetermination to disentitle the petitioners of the benefits of the exemption-to which they are legitimately entitled, particularly when the respondents could not even this date either allege or substantiate that the petitioners do not satisfy the criteria relating to the capital investment or the employment on permanent basis of the required number of labour. Argued the learned Senior Counsel further that the respondents are not only estopped from going behind and taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th interest and penalty are quite in order and unassailable. In this connection, it has also been argued for the respondents that the registration certificate dated January 13, 1993 outlived its utility and purpose after the notification dated December 1, 1994, which excluded cement units from the definition of prestigious units and in the absence of any registration obtained as prestigious cement unit by making due application under the amended rules, before March 31, 1995 the petitioners cannot claim legitimately to satisfy the eligibility norms to avail of the incentives in question. It is also contended for the petitioners that the competent authorities must have enquired into the matter and specifically found out about the satisfaction of the criteria relating to investment and employment of labour before the issue of the certificate and inasmuch as no such enquiry and satisfaction seems to have been made or recorded in the case on hand, the revisional authority was well within its powers in revoking/ cancelling the certificate for non-compliance with a mandatory requirement of rule 22 which, it is stated to be, a condition precedent for the very grant of the certificate. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctness of the stand taken by the revisional authority and the respondents, which according to the learned Senior Counsel are fully supported by the ratio of the decisions relied upon by the revisional authority, by inviting our attention also to those decisions. The petitioners also were said to have committed a serious lapse in not exercising its option to avail of either of the deferment or exemption incentive within 90 days, i.e., before November 10, 1995, the date of commencement of production being August 11, 1995 and that, therefore, the option said to have been exercised on December 19, 1995 is stated to be not in conformity with the requirements of the notification dated July 6, 1995. The date of commencement of production and not the date of commence-ment of commercial production is said to be relevant for calculating the period of 90 days for exercising the option. For the respondents, it was also submitted that the files have been submitted as early as on May 29, 1997 for the consideration of the Commissioner and that the course of action adopted thereafter was just and in the normal course and nothing untoward has happened in these cases. The plea of failure to ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial unit located within the Himachal Pradesh which commences production on or after April 1, 1991 (the appointed day) and include also existing unit, which is eligible to get fresh registration as per the guidelines provided by the Development Commissioner, Small-Scale Industries, Government of India, from time to time but shall not include any industrial unit, small or medium or large, when it is formed only as a result of re-establishment, mere change of ownership, changes in the constitution, re-constitution of revival of an existing unit. Among several incentives, power concessions and sales tax incentives, are a few to be noticed. So far as sales tax incentives with which we are concerned, rule 11.1, provided for sales tax deferment scheme, stipulating that except for industries notified in annexure II to the Rules or as notified from time to time by the State Government a new industrial unit, which is registered as a dealer under the Himachal Pradesh General Sales Tax Act, 1968/Central Sales Tax Act, 1956 , and comply with its provisions was rendered eligible to the various types of sales tax incentives, but only on the sale of the goods manufactured by such units. Unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the unit shall follow the provisions for recruitment laid down under the employment policy of the State Government and comply with rule 24.3, and (c) any unit coming into commercial production in the State on or after May 1, 1992 and registered with the empowered committee as per the prescribed procedure laid down in rule 22.3, between May 1, 1992 and March 31, 1993 and meeting the eligibility criteria laid down under the said rule will be given prestigious status under the scheme. It has been made clear that existing units in the State having investment of more than 50 crores of rupees will not be counted for grant of prestigious status under the scheme and in respect of such unit if they go for expansion/diversification and if such expansion/diversification itself meets the eligibility criteria of prestigious unit as laid down, such unit will also be considered for availing of the incentives only for the expanded capacity. Prestigious units, which are registered as a dealer under the Himachal Pradesh General Sales Tax Act, 1968/Central Sales Tax Act, 1956 and comply with its provisions can avail of Sales Tax incentive only on the sales of the goods manufactured by these units-in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided that while issuing such certificate, if it is found that a particular category of skilled/unskilled persons is not available from employment exchanges/Central employment cell at a particular point of time, a no objection certificate for recruitment for a specific period of time shall be issued by Director of Industries, in consultation with the Labour Commissioner, Himachal Pradesh. 24.4. The applications in the prescribed forms for setting up of prestigious unit/pioneer units will be made to the Director of Industries, who will then put these up for the consideration of the Industrial Project Approval and Review Authority. After Industrial Project Approval and Review Authority clearance the same application will be considered by the empowered committee. The decision of the empowered committee will be final. The empowered committee, while according approval for registration, will specify the date by which the unit shall commence commercial production. This will be done on the basis of the proposed detailed implementation schedule submitted along with the application form. Provided that the empowered committee in certain cases where it deems fit and depending upon the merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T) shall be available for a period of 12, 9 and 7 years in categories A, B and C blocks, respectively, to new prestigious cement units, excluding existing cement units which have gone/are going in for expansion and where the expansion itself meets the criterion laid down for prestigious cement units. In case of expansion, of existing cement units eligible for grant of prestigious status of the incentive of sales tax on the expanded capacity as provided above, i.e., exemption/deferment of CST-GST for a period of 12, 9 and 7 years in categories A, B and C blocks, respectively, will be available only if the level and amount of sales tax per annum being paid/paid on the date of commencement of production of the expanded unit by the old unit is maintained and paid every year during the period of eligibility of incentive on expanded capacity. Now prestigious cement units shall have to opt for either sales tax exemption or deferment within 90 days from the date of commencement of production. Option once exercised shall be final. A prestigious cement unit opting sales tax deferment scheme will be governed by rule 11.2, 11.3, for the purpose of administration of units incentive. Rule 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has furnished the same to the prescribed authority for the grant of exemption certificate in form S.T.E.-III; (iv) it has been granted an exemption certificate in form S.T.E.-II by the prescribed authority; (v) it (registered dealer) complies with the provisions of (a) the Himachal Pradesh General Sales Tax Act, 1968, (b) the Central Sales Tax Act, 1956, and (c) the Rules, notifications and orders made and issued under these Acts; (vi) the exemption certificate continues to remain operative and it has not been withdrawn or cancelled by the prescribed authority or is not annulled or quashed in any appellate, revisional or other proceedings: Provided that the exemption contained in sub-para (1) to M/s. The Associated Cement Companies Limited, Barmana, District Bilaspur (Himachal Pradesh) shall be granted by the prescribed authority only if, in addition to the preceding conditions,- (a) the payment of tax under the Himachal Pradesh General Sales Tax Act, 1968, and the Central Sales Tax Act, 1956, in respect of the old component of the M/s. The Associated Cement Companies Limited, Barmana, District Bilaspur (Himachal Pradesh) is actually made even during each financial yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... means a new cement industrial unit which has fixed capital investment of not less than rupees fifty crores, comes into production after the 1st day of May, 1992, is registered by the empowered committee between the 1st day of May, 1992 and the 31st day of March, 1995 and employs on permanent basis not more than two hundred persons; and (i) is based on local raw material, or (ii) carries out value addition of fifty percentum or more, in its manufactured products, or (iii) undertakes an export commitment of 50 per cent or more of its production, or (iv) is declared to be prestigious cement unit by the empowered committee headed by the Secretary (Industries) to the Government of Himachal Pradesh; and also includes an existing industrial unit which fulfils the above criteria for prestigious cement unit exclusively by virtue of the component of expansion or diversification or modernisation as the case may be; (c) the expressions diversification , expansion , modernisation , empowered committee and prescribed authority shall have the same meanings assigned to them in clauses (iii), (v), (iv) and (xv) respectively of sub-para (1) of para 2 of the Himachal Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availed of can be said to be an impediment for invoking jurisdiction of this Court under article 226 of the Constitution of India. The rule of exhaustion of statutory remedies has been always considered to be not only a rule of policy, convenience and discretion than a rule of law, but the alternative must be shown to be an effective and efficacious one. So far as the case on hand is concerned not only substantial questions of law of great importance are involved for determination but the very allegation of the petitioners is that it is at the behest of the Minister incharge of Taxation and Excise such suo motu revisional proceedings have been initiated and that it is not as though the alternative remedy is to approach a judicial or independent Tribunal but only to the Financial Commissioner of the Government. The impugned orders, apart from being said to be illegal and without jurisdiction involve imposition of an illegal levy of substantial sum and, therefore, cannot be considered to be such a disentitling factor to dissuade this Court from exercising its jurisdiction under article 226 of the Constitution of India. The decision in H.B. Gandhi, Excise and Taxation Officer-cum-Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea of political bias or mala fides and legal malice, strongly projected both in the petitions and also at the time of the preliminary hearing of the writ petitions, when it came up for orders regarding admission. But, at the time of final hearing, Shri Shanti Bhushan, learned Senior Counsel for the petitioners, while stating that it would be sufficient for the petitioners to rest their case squarely on the legal issues alone, and that it was not absolutely necessary to go into the issue relating to political bias or mala fides at length, and further indicated that the facts on record would themselves go to show that something unusual, which does not meet the eye seem to have happened and he would rest content with that stand, for the present. In view of this, the learned Senior Counsel for the respondents also, except pointing out that the order passed on May 27, 1997 was sent with the files to the Commissioner on May 29, 1997 itself has not chosen to deal with these aspects further. Therefore, it has become unnecessary for this Court to go into the question of political bias or mala fides on account of change in the political arena, and such influence operating as a vitiating f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ines/policy issued by the State can be enforced against the State if (a) the person concerned shows that he has been led to take an action on the basis of the representation and (b) that he satisfied the eligibility criteria laid down for availing the exemption. Therefore, whatever may be the rights/justification for the respondent-State to contend that the petitioners have not satisfied the eligibility criteria and, therefore, not entitled to the exemption claimed, it is not given to the respondents to take the extreme and unreasonable stand that the policy/guidelines, proclaimed by them are not enforceable or that they do not create any rights enforceable in any court of law. 28.. The next issue which we consider it appropriate to go into, before undertaking the question as to whether the petitioner fulfilled the necessary eligibility criteria to claim the exemption and whether they were initially accorded the status and recognised to be eligible properly and legally, the general issue as to the nature of interpretation and manner or method of construction that should be adopted and applied in understanding and exploring the scope and purport of the Government orders and the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut doing violence to the scheme underlying or the language employed therein and not be unduly rigid or too technical to undermine or defeat the very purpose of the scheme or public interest, involved in the same. 31.. The grievances of the petitioners, which emanate out of the impugned action, in the shape of orders passed by the revisional authority, as also the consequential and related orders passed on the basis of the reasoning of the revisional authority is based upon the reasons and ultimate findings recorded on the following vital issues, assumed for adjudication by the authorities, particularly the revisional authority in this regard: (a) The petitioner-industry is not a prestigious cement industrial unit within the meaning of para 1-C of the statutory notification issued under section 42 of the Himachal Pradesh General Sales Tax Act, 1968 and the notification correspondingly issued under section 8(5)(a) of the Central Sales Tax Act, 1956, since it does not, according to the respondents, fulfil the eligibility criteria prescribed therefor, and such status came to be recognised and conferred by the competent authority erroneously rendering it liable to be annulled; (b) tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for our purpose reads as follows: 1-C. (2) The concession of exemption from payment of tax under this Act, shall be admissible to other industries only if- .......................... (v) it (registered dealer) complies with the provisions of (a) the Himachal Pradesh General Sales Tax Act, 1968, (b) the Central Sales Tax Act, 1956, and (c) the rules, notifications and orders made and issued under these Acts; ......................... (3) Notwithstanding anything contained in sub-paras (1) and (2), no exemption shall be granted by the prescribed authority to such other industry(i) if it is found that the evasion of tax under the Himachal Pradesh General Sales Tax Act, 1968 or the Central Sales Tax Act, 1956, has been committed by the entrepreneur (registered dealer). 33.. The stand taken for the petitioner is that there is no purchase or sale of the minerals, involved in exploitation of mineral under a mining lease granted under form K under the provisions of the Mines and Minerals (Regulating and Development) Act, 1957 and the rules made thereunder and consequently no liability is attracted against the petitioner in this regard which it could be said to have violat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge then was, speaking for a Division Bench of the Andhra Pradesh High Court, exhaustively analysed this issue, with particular reference to an identical lease for the very same kind of material in respect of a dispute raised by another cement company, reviewing the catena of case law on the subject including the decision reported in [1977] 40 STC 603 (SC); AIR 1977 SC 687 (State of Madhya Pradesh v. Orient Paper Mills), and placing reliance on the decision reported in AIR 1979 SC 1669 (Shri Shri Tarakeshwar Sio Thakur Jiu v. Bar Dass Dey and Company), after exhaustively adverting to the varieties of rights given under the lease for mining and exploitation and appropriation of the minerals excavated, it was held that the lease granted does not cease to be a lease of immovable property or for that matter can be ever said to have become a mere licence and that at any rate the right to enjoy immovable property would include the right to remove the minerals from the land leased. Finally, it was held that the leases of the nature in question are leases of immovable property and not either licences or agreements to sell , the mineral concerned, the excavation of mineral being only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw was not brought to their Lordships notice, was rendered in totally a different context as to whether such amount paid by way of royalty paid for acquisition of materials used in the execution of a works contract would constitute price of materials used in the works contract after the constitutional amendment permitting levy of sales tax, in respect of sale of goods involved in the execution of works contracts. Therefore, the amount of royalty paid in the case cannot be considered to be the sale price nor could the rights secured under or the contract of lease in form K could be said to constitute any agreement of sale/purchase of goods so as to attract liability under section 5A of the Himachal Pradesh General Sales Tax Act. 35.. So far as the alleged violation of the provisions of the Central Sales Tax Act, 1956 is concerned, the same is based upon either on account of nonfiling or valid or defective and irregular filing of C forms for the period during which the tax liability was not disputed for purchase of goods, which required the issue of such C forms, as the case may be. The sheet-anchor of the basis of action in this regard, besides other decided cases, is the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case and the points projected in the said decision. Relying upon the decision reported in [1993] 90 STC 128 (Bimetal Bearings Ltd. v. State of Tamil Nadu) rendered by a Division Bench of the Madras High Court, it was also contended that even if C forms have been filed, as in the present case, including in one form more than one transaction exceeding the monetary limit, the defect alleged cannot be held to be so fundamental in respect of any essential feature going to the root of the matter, so as to affect the legality and validity of the C forms. In any event, as urged for the petitioners, such forms are permitted to be filed not only before the finalisation of the assessment and even at the appellate and revisional stages also and the same cannot be the ground for once and for all rejecting the claims or condemning the petitioners for non-compliance with/violation of the provisions of the Act, Rules and notifications. Case law are innumerable where the courts, including the apex Court, have held that even at the appellate stage the assessee may be allowed to file C forms or file rectified and proper forms if those filed were found to be defective in any manner or for an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iteria stipulated cannot be accorded the status of the prestigious cement industry within the meaning of the relevant notifications and that, therefore, the exemption allowed to avail of the incentives by the grant of such a status and the certificate in form STE-II, in recognition thereof is liable to be set aside and has been rightly set aside too, and, therefore, there are no merits in the challenge directed against the orders of the revisional authority in these cases. That the petitioners have not satisfied the essential fact that it is a prestigious cement industrial unit , has been found by the revisional authority on the basis that the requirements of para 1-C of the notification dated January 30, 1996 remained unfulfilled for the principal reason that the registration accorded to the petitioners, as such, and obtained by them was only in the meeting held on January 23, 1996 and the certificate of registration dated February 2, 1996, issued thereon, and consequently it cannot claim to have been registered with the empowered committee between May 1, 1992 and March 31, 1995 which is crucial for availing of the concession and, therefore, the petitioner-company is not one envi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the original/competent authority was stated to be well within its rights, power and competence to go into the questions in the manner and as was expected of the original authority and set aside the certificate in form STE II, for the reasons and grounds specifically found and rendered by the revisional authority. 38.. Both the learned Senior Counsel appearing on either side, invited our attention extensively and elaborately to the relevant notifications as well as the impugned orders to substantiate their respective stand. We have carefully considered the submissions in this regard keeping in view the elaborations made of their submissions with particular reference and emphasis made by them on the purport, import as also the language used in the notifications and the objects and aims of the notifications and the objects of the scheme underlying the various notifications, noticed supra. A compendious consideration of the above notifications leaves no doubt in assuming that they were meant to grant incentives, i.e., attract new industries and entrepreneurs to this State and promote the economic growth, encourage industrialisation and thereby also provide more employment opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued on July 31, 1992 and by then sections 42 and 42A of the General Sales Tax Act came to provide powers appropriate to formulate such schemes. Whether reference was made specifically thereto or not, it is well-settled that when statutory power is shown to exist and notifications satisfying its requirements come to be issued, such as those issued on July 31, 1992, December 1, 1994 and July 6, 1995, the notifications will have to be traced to the proper source of power and it may not be justified for the respondents to take extreme stands about the non-enforceability of those provisions in any court of law. The notifications issued in the Industries Department also must be traced and are referable to the powers available under sections 42 and 42A, as much as the notifications issued on January 30, 1996, and all these notifications have to read properly and harmoniously, as aimed towards the achievement of the same target. Notifications dated December 31, 1994, March 27, 1995 and January 30, 1996, at any rate are indisputably notifications issued invoking specifically the power under section 42 of the Himachal Pradesh General Sales Tax Act. (b) The incentive Rules envisaged the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cement, have commenced commercial production with effect from 26th September, 1995. This is also to certify that the installed capacity at Darlaghat is 10 lakh tonnes per annum of clinker and 6 lakh tonnes per annum of cement grinding as on date. The company has so far made fixed capital investment in this industrial undertaking, viz., land Rs. 6.5 crores, building Rs. 66.5 crores, plant and machinery Rs. 306 crores and other fixed assets Rs. 12.00 crores, totalling Rs. 391 crores and employed 353 persons. It is further certified that the company shall manufacture cement to the extent of a minimum of 75 per cent of the installed capacity or approved capacity of 8 lakh tonnes of cement manufacturing whichever is higher, at Darlaghat and the company is permitted to export/transport the remaining clinker, including surplus clinker by way of excess capacity utilisation, outside Himachal Pradesh vide IPARA approval accorded vide No. Ind. Dev. F(34) IPARA-89-I dated December 12, 1994. Sd/- Director of Industries, Himachal Pradesh. No. Ind. Dev. F(34) IPARA-268/89-I dated January 24, 1996. It may also be pointed out at this stage that provisional sales tax registration was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration accorded on January 13, 1993, if at all was of a project/blue print on paper and unless the registration as shown to be of a fulfledged unit functional in all respects, satisfying the criteria, even on the date of according registration by the empowered committee, it is no registration in the eye of law for the purpose of fulfilling the norm of having got to have been registered between May 1, 1992 and March 31, 1995. The scheme of incentives introduced with changes and modifications, from time to time, from March 27, 1991 and till July 6, 1995 and the notifications dated January 30, 1996 issued under the Himachal Pradesh General Sales Tax Act and Central Sales Tax Act have to be harmoniously and reasonably construed keeping in view the purpose underlying the scheme to make it a real and effective as well as workable one, and not to be construed in the manner of shylocks demand for justice . The manner of construction sought to be now made by the revisional authority and the one sought to be projected would not and could not have been the method of implementation envisaged is best demonstrated by the contemporaneous method of enforcement of the provisions of the scheme by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment, be it even the revisional authority could arrogate to themselves such jurisdiction to decide as to whether even at the initial stage the industry/dealer concerned has to be accorded or acquired such status. Since, the exemption in the case on hand by way of incentive is of the levy of sales tax, and it is the Excise and Taxation Laws a department which has to administer the taxation matters, the notification dated January 30, 1996 confers power upon the authorities of the Excise and Taxation Department to oversee, even after the grant of the required status as such by the empowered committee, whether it continued to satisfy the requirements and eligibility criteria, as long and so long as the exemption is sought to be availed of, so that an industrial unit, which though satisfied initially the norms, but by ceasing to continue to conform the same and thereby having lost or forfeited the right to enjoy or avail of the incentives does not avail of the same even after it ceased to be eligible also. Consequently, the revisional authority was not empowered to and had no authority, in our view, to review/ reconsider the decision taken and the status accorded by the empowered commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules though amended from time to time is to allow industrial units to avail of all new incentives also as long as such units continued to enjoy the status earlier accorded to them. It should all the more be so, when no additional or further criteria has been stipulated to be satisfied. Likewise, the plea on behalf of the respondents that the petitioners having committed a lapse in not opting for and exercising option within 90 days as provided under the amended Rules themselves are ineligible to claim benefit of exemption, has no merit of acceptance. This plea proceeds on the supposition that 90 days period has to be computed from the date of trial production. In our view, the date of commencement of production has to be computed from the date of commencement of effective and real production for commercial purposes and not a token or trial production for the purpose of testing. 42.. The further reason assigned by the revisional authority that the competent authority has not passed two separate orders under the two different enactments, State as well as Central law, and that there was no proper or thorough enquiry before according the certificate in form STE II, are nothing but se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners would, in our view, be entitled to the benefit of the incentives from the date of commencement of commercial production on September 26, 1995. As held in State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258 (SC); (1999) 1 SCC 31, it would not be permissible for even the State Government to override or negate the incentives and benefits which any industrial unit would be otherwise entitled to under the incentive policy, proclaimed by the Government itself. For all the reasons stated above, we have no hesitation for setting aside the impugned orders of the revisional authority, challenged in these writ petitions as also the orders impugned in C.W.P. No. 52 of 1999 based on identical reasons and the writ petitions, shall stand allowed, as prayed for. But it is made clear that the continued eligibility of the petitioners to avail of the incentives will depend upon the continued satisfactory compliance with and conforming to the other terms and conditions of the notification dated January 30, 1996. As and when, there is any violation in this regard, it will be always open to the State and the competent authorities to take appropriate action, in this regard in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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