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TMI Blog2001 (10) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... of the industrial units set up at Village Harkishanpura, District Sangrur. However, it could avail the benefit of exemption only to the tune of Rs. 49 crores. In 1996, the Government of Punjab announced a new Industrial Policy (hereinafter described as "the 1996 Policy") which was published vide Notification No. 15/43/96-5/IB/2238 dated March 20, 1996 for grant of fresh incentives to the new entrepreneurs as well as existing industries. For the purpose of giving effect to the 1996 Policy, the State Government framed the rules titled as "Punjab Industrial Incentive Code under the Industrial Policy, 1996" (hereinafter described as "the Incentive Code, 1996"). With the avowed object of availing the benefit of incentives announced under the 1996 Policy, the petitioner undertook expansion of its existing unit by enhancing the installed capacity from 25,000 TPA to 38,500 TPA and made additional fixed capital investment to the tune of Rs. 3,568.41 lacs. The General Manager, District Industries Centre, Malerkotla, issued eligibility certificate (annexure P1) under rule 6.3(ii) of the 1991 Rules entitling the petitioner to claim sales tax exemption amounting to Rs. 84 crores in a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the 1991 Rules. 5.. In the written statement filed on behalf of respondent No. 2, it has been averred that the department has granted sales tax exemption to the petitioner to the tune of Rs. 382.84 crores from May 14, 1993 for a period of seven years. 6.. The question as to whether the provisions of rule 4(3) and (4) of the 1991 Rules can be invoked while granting the benefit of sales tax deferment/exemption in the light of the 1996 Policy was considered and answered in negative in C.W.P. No. 5726 of 2000(Oswal Fats and Oils, Ludhiana v. State of Punjab) decided on decided on December 15, 2000. In that case, the court referred to the salient features of the Industrial Policy, 1989, 1996 Policy, Incentive Code, 1996, sections 10-A, 27(1) and 30-A of the 1948 Act and rules 1(2) and (3), 4(1), (3) and (4), 4-A and 4-B of the 1991 Rules and observed as under: "An analysis of the above extracted portions of the two industrial policies, the provisions of the rules framed for implementation thereof, the provisions of the 1948 Act and the 1991 Rules shows that with a view to achieve the objective of rapid industrialisation of the State and the consequential creation of job ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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 from the 1989 Policy in the matter of grant of incentives in the form of sales tax deferment/exemption inasmuch as the concept of incremental production was omitted from the said Policy and the Incentive Code, 1996. Instead, the new concept of giving benefit of additional fixed capital investment was introduced. A corresponding change was also made in the 1991 Rules by inserting rule 4-B with effect from April 1, 1996 vide notification dated May 22, 1996. This rule also begins with non obstante clause and clause (ii) of sub-rule (1) thereof lays down that group of industries which are set up in B category area (the petitioner falls in this category) on or after April 1, 1996 and the goods produced by them shall be eligible for grant of the benefit, at their option, of deferment of, or, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 Mammu v. State of Kerala AIR 1966 SC 1614 in the context of articles 6 and 7 of the Constitution of India. The facts of that case were that one Aboobacker, who was born on March 5, 1936 in District Kozhikode, left India some time in 1948. He remained in Pakistan till 1954. In September, 1954 he came to India on Pakistani passport. Between November, 1954 and October, 1964, he off and on went back to Pakistan and came to India. In 1964 he was found living in District Kozhikode without valid travel documents. He was arrested. Writ petition filed on his behalf challenging his arrest was dismissed by Kerala High Court which held that Aboobacker will be deemed to have migrated to Pakistan within the meaning of article 7 of the Constitution of India and thus, was a foreigner. While upholding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 the 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 "GIB Rules") transferred the same to the preference share capital redemption account. The Income-tax Officer added back that amount to the income of the assessee on the reasoning that in view of rule 2(a) of the GIB Rules this amount was to be treated as revenue expenditure. The High Court upheld the action of the Revenue. While allowing the appeal of the Corporation, the Supreme Court held as under: "The sum set apart as provision for redemption of preference shares could not have been treated as an expenditure. It is also not an expenditure or allowance of the nature covered by sections 30 to 43-A of the Income-tax Act, 1961. The question of determining its admissibility by reference to rule 5(a) of the First Schedule to the Income-tax Act, 1961 does not arise, nor could it have been added back by the assessing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral that rules 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 rejected. In this context, it is important to bear in mind that rule 4-A was inserted vide notification dated September 29, 1992 for the purpose of giving effect to package of incentives announced by the Government in September, 1992 and by incorporating non obstante clause in it, the rule-making authority had made it clear that the benefit available under the package of the incentives will not be restricted by applying the concept of incremental production. Rule 4-B, as observed above, was inserted for giving effect to the 1996 Policy and the rules contained in the Incentive Code, 1996. Therefore, the non obstante clause used in sub-rule (1) of rule 4-B will have the effect of overriding the provisions of rule 4-A as also rule 4(3) and (4) and being later ..... X X X X Extracts X X X X X X X X Extracts X X X X
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