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TMI Blog2002 (2) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit under the Rajasthan Sales Tax New Incentive Scheme, 1989 (for short, "New Incentive Scheme"). The definition of "expansion" of an industrial unit under the Incentive Scheme, 1987, or the New Incentive Scheme, 1989, or the Deferment Scheme, 1987, or the New Deferment Scheme, 1989 remains the same. The schemes under which applications have been made in the present facts and circumstances of the case do not alter the character of the question and therefore these cases, we deem it convenient to hear together and decide by this common order. In fact, the Rajasthan Taxation Tribunal has also decided the cases of M/s. Super Syncotex (India) Ltd., and M/s. H.E.G. Ltd. by a common order whereas M/s. Reliance Chemotex Industries Ltd.'s case has been decided by a separate judgment by the Rajasthan Taxation Tribunal. 4.. On application being made in this behalf by the respondents in respect of their respective units for grant of eligibility certificate under the schemes in question as an "expansion", the State Level Screening Committee has rejected their claims on the sole ground that they have not achieved the production to the extent of 25 percent of the original "licensed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e scheme that since the abolition of licence system, the licenced capacity or the registered capacity no more exist with reference to which the required increase in the installed capacity and the actual production can be measured. It must necessarily relate to the existing production under the existing installed capacity and increase in the production with increase in the capacity to be installed/expanded. 7.. While the State Level Screening Committee has rejected the claim of the respondents, the Tax Board allowed the applications of the respective respondents and directed issuance of eligibility certificate. On revision, the Rajasthan Taxation Tribunal agreed with the conclusions reached by the Rajasthan Tax Board and dismissed the revisions filed by the Revenue. Hence these writ petitions are before us. 8.. It is now common ground between the parties that in pursuance of the orders under challenge, the eligibility certificate has in fact been issued to the respective applicants and they are availing of the benefit under the scheme. 9.. In Writ Petition No. 1632 of 1998 the respondent M/s. Super Syncotex Ltd., made an application for availing of the benefit under the New In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieved at least 85 per cent of their licensed/registered capacity before expansion." 15. Before proceeding further, it would be relevant to notice the chronology of the incentive schemes operating in the field of granting exemption/deferment benefits to the new installed capacities within the State whether by way of installing a new industry or by installing additional capacity over and above the existing capacity by way of expansion or by installing new capacity in different goods by diversification by an existing industrial unit. 16.. In the first instance, the Government provided the incentive under 1985 Dispensations by making available to the new industrial units interest-free loans against the tax burden. By issuing a notification under section 4(2) of the Rajasthan Sales Tax Act on 23rd May, 1987, the Rajasthan Sales Tax Incentive Scheme for Industries, 1987 was brought into effect with effect from 5th March, 1987. While bringing into force this incentive scheme, the industrial unit, which had commenced commercial production on or after April1, 1985 and was entitled for interest-free loan under the 1985 Dispensation Scheme, was included in the category of industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1989 Scheme, the benefit of the 1989 Scheme was not extended to the 1985 Dispensations but other industrial units if covered by Sales Tax Incentive Scheme for Industries, 1987 or under the Deferment Scheme of 1987 were given option to seek the benefit under the new incentive scheme. Even applicants, whose applications under the incentive/ deferment scheme had been rejected on the ground of limitation or were pending before the Screening Committee, were given the option to opt for either of the schemes under which they wanted to avail of the benefit. The industrial units which had been granted sanction for availing of the benefit under the old incentive/deferment scheme, were also given the option to switch over to the new scheme. This only goes to show that the New Incentive Scheme, 1989 was in continuation of the Schemes of 1987 with the same object and purpose for extending benefit of tax concession/benefits to the new installed capacity within the State. 19.. In the context of the present controversy, it is relevant to notice that on coming into close the period of operation of 1987 schemes and New Incentive Scheme, 1989 on 31st March 1998, finally the two schemes, namely, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh such legislative document and make such provisions workable in furtherance of such object. 21.. Even otherwise, the principle is well-established that where the language of a statute in its ordinary meaning and grammatical construction leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence. Where the main object and intention of a statute are clear, it may be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, of the absolute intractability of the language used. Nevertheless, the courts are very reluctant to substitute words in a statute, or to add words to it, and it has been said that they will only do so where there is a repugnancy to good sense. The principle was stated by Lord Denning in Seaford Court Estates v. Asher (1949) 2 All ER 155 spelling out the task of a Judge in interpreting a statute which is ambiguous or leading to a result which is in conflict with the object of the statute: "When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which by any law framed by the State in connection with its industrial policy which required licensing or registering of the production capacity to which it could be related. 25.. In these circumstances, in our opinion, the obvious reference of licence/registered capacity mentioned in the definition of "expansion" under 1987 and 1989 Schemes can be referable to the provisions of the Industries (Development and Regulation) Act, 1951 which was promulgated with the object of regulating the national resources through means of industrial exploitation by providing for licensing and registering of industries. The Act of 1951 was applicable only to the industries specified in the First Schedule appended to the Act. Thus, the licensing of industries was not a universal fact in respect of all industries but could only be in respect of industries specified in First Schedule. In this context, it is not the case of anyone nor it cannot be doubted that the incentive scheme whether of 1987 or of 1989 or of 1998 is not confined for the purpose of extending benefit only to the industries which required licence under the IDR Act but extends to all new industrial units set up, expansion carried ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the licensing capacity. The Industries Registration and Licencing Rules, 1962 provides a procedure for registering and licensing the industries as may be required under the Act and the format of application provided the information to be furnished about the proposed capacity to be installed whether new or under expansion. In this connection, the provisions of section 13 become relevant to be noticed which in no uncertain terms provide in clause (d) of sub-section (1) that no owner of an industrial undertaking, other than the Central Government, shall effect any "substantial expansion " of an industrial undertaking which has been registered or in respect of which a licence or permission has been issued except under, and in accordance with, a licence issued in that behalf by the Central Government, and, in the case of a State Government, except under and in accordance with the previous permission of the Central Government. The explanation to section13(1) further clarifies what is meant by expression "substantial expansion". According to the explanation, it means the "expansion of an existing industrial undertaking which substantially increases the productive capacity of the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme under which such expansion is carried out. 31.. Viewed in the above light, if we examine the scheme under the incentive/deferment schemes of 1987 and 1989, it is apparent that for extending benefit of expansion, the Government has in mind the substantial expansion which only would qualify for benefit and not the expansions carried out in ordinary course of conducting business. This explains that a provision has been made that there must be at least 25 per cent increase in the fixed capital investment over and above the existing value of the fixed assets and also it should obtain at least 25 per cent increase in its production capacity in the context of substantial expansion envisaged. If we draw any inference from IDR Act which refers to the installed capacity under the licence or registration as the case may be, it cannot have a reference to any other factor if a workable meaning is to be assigned to the term "original licenced or registered capacity" except to capacity already installed under a licence or installed capacity already registered it. 32.. It may be noticed that if licensed and registered capacity has reference to any fixed criterion as has been urged by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he schemes depending on the option of the industrial units desirous of availing of such benefits. In the context of the schemes in question and its object, the expression "licenced/registered capacity" under clause 2(f) of the respective Schemes of 1987 and 1989 respectively, can have reference only to the existing installed capacity with regular expansion, in the ordinary conduct of business from day to day, under the licensed or installed capacity as registered under IDR Act at the time when benefit of expansion is claimed. Yardstick of increase in fixed capital investment and increase in production which may qualify it for a "substantial expansion" has been laid under the scheme as noticed above. If any other view is taken, then it must be held that until 1998 vast majority of industries, which were not intended to be excluded shall remain excluded merely because at the time when they had applied for an industrial licence under IDR Act, had projected a futuristic vision of much larger capital outlay with much larger capacity notwithstanding immediate project was only for much smaller installed capacity with moderate capital outlay and future expansion depended on obtaining a lic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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