9911796707
TMI Blog2001 (10) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... ified on June 1, 1996 and March 20, 1996." 2.. The petitioner is engaged in the business of manufacture and sale of di-calcium phosphate and tri-calcium phosphate in its unit situated at 38, Focal Point, Mehta Road, Amritsar. It is registered as a dealer under the Punjab General Sales Tax Act, 1948 (for short, "the 1948 Act") and the Central Sales Tax Act, 1956 (for short "the 1956 Act"). The unit of the petitioner went into commercial production in 1991. After complying with the formalities prescribed under the New Industrial Policy, 1989, it was granted eligibility certificate on March 19, 1991 for deferment of sales tax to the tune of Rs. 14,47,571 for a period of 9 years commencing from January 21, 1991. Thereafter, the Assistant Excise and Taxation Commissioner, Amritsar, issued deferment certificate in form ST (D and E)-II for grant of benefit of deferment under the Punjab General Sales Tax (Deferment and Exemption), Rules, 1991 (for short, "the 1991 Rules") up to January 21, 2000. In the year 1996, the petitioner applied for grant of eligibility certificate under the Punjab Industrial Incentive Code, 1996 (for short "the Incentive Code") in respect of the expanded portion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the years 1989, 1992 and 1996 for providing incentives of sales tax exemption/deferment to the newly industrial units for a specified period and specified amount depending on the location of the unit. According to them, the petitioner was granted deferment certificate on May 5, 1992 for an amount of Rs. 14,47,571 for a period of 9 years commencing from January 21, 1991 in respect of the industrial unit set up in 1990-91. Thereafter, it was granted deferment certificate dated April 27, 1998 for a sum of Rs. 30,75,000 for 10 years commencing from October 17, 1997 on incremental basis. The respondents have relied on the provisions of rule 4(3) and (4) of the 1991 Rules framed under section 27 read with sections 10-A and 30-A of the 1948 Act and have averred that the petitioner cannot get the benefit of deferment on total production. 5.. We have heard learned counsel for the parties and perused the record. 6.. The question as to whether the concept of incremental production can be invoked by the Government while granting the benefit of sales tax deferment/exemption in terms of the 1996 Policy and the Rules titled as "The Punjab Industrial Incentive Code" under the Industrial Pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 1989. Under that rule, the industrial unit was required to obtain separate sales tax registration certificate for the additional capacity and incremental production resulting from such expansion/modernisation. This was also unequivocally reflected in the 1991 Rules which were brought into force with effect from April 1, 1989 and made applicable to the units which came into production on or after 1st April, 1989. Rule 4(3) and (4) read with explanation appearing below rule 4(4) provided for grant of benefit under sub-rule (1) thereof on the basis of incremental production. Later on, rule 1(3) was amended vide Notification No. G.S.R. 65/P.A. 46/48 dated September 21, 1992 and again vide Notification No. GSR/97 dated May 22, 1997 with effect from April 1, 1996 so as to make it applicable to the units which came into production on or after 1st day of October, 1992 and 1st day of April, 1996 respectively. Rule 4-A which begins with a non obstante clause was also inserted vide notification dated September 29, 1992 with a view to extend the benefit of deferment/exemption to the units coming into production on or after 1st day of October, 1992. The 1996 Policy made a clear departure fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s' in rule 4-A(1) is clearly indicative of the intention of the rule-making authority not to invoke the concept of incremental production for grant of benefit of the incentives under the Package of 1992. The use of expression 'notwithstanding anything contained in rule 4-A and subject to the provision of sub-rule (2)' in rule 4-B and the language of clauses (i)(a) and (ii) of sub-rule (1) of rule 4-B show that the benefit of exemption to the industries set up in 'A' category area and 'B' category area on or after 1st day of April, 1996 was made relatable to the fixed capital investment and not on the basis of incremental production. Therefore, the decision taken by the respondents to grant benefit of sales tax deferment to the petitioner by applying the concept of incremental production is liable to be declared ultra vires to the scheme of the 1996 Policy, the Incentive Code, 1996 and rule 4-B(1)(ii) of the 1991 Rules." 8.. The court then considered the effect of non obstante clauses contained in rules 4-A and 4-B of the 1991 Rules and observed as under: "The effect of a non obstante clause in a statute was considered by the Constitution Bench of the Supreme Court in Kulathil Mam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t apart by General Insurance Corporation for redemption of preference shares can be added back for computing profits and gains of business. The facts of that case show that the appellant-Corporation was formed as a Government company under the General Insurance Business (Nationalisation) Act, 1972. It carries on general insurance business in India. At the time of nationalisation, the then existing private companies which were carrying on the business of general insurance merged together in four subsidiaries of the appellantCorporation. The Central Government contributed to the capital of the appellant in the form of preference shares and equity shares for the purpose of paying compensation to the shareholders and the management of the merged companies. The preference shares were to be redeemed in such time as the Board of Directors of the appellant-Corporation might deem fit. In profit and loss account for assessment year 1977-78, the appellant-assessee made a debit entry of a certain amount and, in accordance with rule 2(2)(a) of the General Insurance Business (Nationalisation) Rules, 1973, (for short 'the GIB Rules') transferred the same to the preference share capital redemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two enactments have thus different purposes to achieve. The rule of harmonious construction would there sustain neither what the Incometax Officer did nor the view of the law taken by the High Court. (Underlining is ours). By applying the propositions laid down in the aforementioned decisions to the facts of this case, we hold that non obstante clause contained not in rule 4-B(1) overrides the provisions contained only in rule 4-A, but also in rule 4(3) and (4) of the 1991 Rules and, therefore, the concept of incremental production cannot be invoked for granting benefit of sales tax deferment to an industrial unit, like the petitioner which undertook expansion after April 1, 1996." Here italicised. 9.. The argument of the learned Deputy Advocate-General that Rule 4(3) and (4) should be read as part of rule 4-B was rejected in the following words: "The argument of the learned Deputy Advocate-General that rule 4(3) and (4) should be read as part of rule 4-B because the non obstante clause contained in sub-rule (1) of rule 4-B is worded differently than the non obstante clause used in rule 4-A appears to be attractive in the first blush, but lacks merit and deserves to be reject ..... X X X X Extracts X X X X X X X X Extracts X X X X
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