9911796707
TMI Blog2014 (11) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... lf registered under the Punjab General Sales Tax Act, 1948 (in short, "the PGST Act") with effect from June 5, 1989 and under the Central Sales Tax Act, 1956 (for brevity, "the CST Act") on June 6, 1989 in respect of two units at Village Channo. On January 4, 1990, the petitioner obtained registration under the PGST Act and CST Act in respect of third unit at Village Zahura. The petitioner commenced production at Village Channo in respect of processed potatoes/foodgrain on January 21, 1990 and of soft drink concentrate on May 16, 1990. The production at processed fruit and vegetable plant at Village Zahura commenced on December 16, 1990. The Punjab Government formulated industrial policy for the eighth five year plan, which became operative from April 1, 1989 till the end of the plan whereunder it notified the rules called "Punjab Industrial Incentives Code under the Industrial Policy Statement 1989" (hereinafter referred to as, "1989 Policy"). The policy offered fresh incentives for development of industry in Punjab and was designed to attract fresh investment in new thrust areas including agro-based sectors. The policy offered various incentives including deferment/exemption from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... branch independently. Replication was filed by the petitioner reiterating its averments in the writ petition. 4. Mr. Rao, learned senior counsel for the petitioner, submitted that the District Industries Centre, Malerkotla had issued the eligibility certificates for the period from January 21, 1990 to January 20, 1999, May 16, 1990 to May 15, 1999 and December 16, 1990 to December 15, 1999 and in such a situation, the Department of Excise and Taxation was not justified in rejecting the issuance of exemption certificates under the 1991 Rules. Learned senior counsel referred to the 1989 Policy issued by the State of Punjab on March 30, 1989 to grant package of incentives to attract fresh investment in the new thrust areas like high technology and agro based sectors. 5. It was pointed out that the petitioner is covered under category A and was entitled to 125 per cent of the fixed capital investment subject to maximum of rupees six crores to be availed of in maximum nine years period from the date of starting production. It was further argued that the rules nowhere restricted the maximum of Rs. 6 crores to one dealer but each unit was entitled to separate limit of Rs. 6 crores indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss ventures so as to attract investment in the State of Punjab. The policy was, thus, required to be interpreted liberally though there was only one interpretation as canvassed by the petitioner. Even if two interpretations are possible, then the one which favoured the petitioner was required to be adopted. Contending that literal meaning should be assigned to exemption notification so as to achieve the purpose and object with which it has been issued, support was gathered from observations noticed in paras 21 and 24 in SCC (paras 24 and 28 in 24 VST 536) in Assistant Commr. (CT) LTU v. Amara Raja Batteries Ltd. [2009] 24 VST 536 (SC); [2009] 8 SCC 209, which read thus: "21. An exemption notification should be given a literary meaning. Recourse to other principles or canons of interpretation of statute should be resorted to only in the event the same gives rise to anomaly or absurdity. The exemption notification must be construed having regard to the purpose and object it seeks to achieve. The Government sought for increase in industrial development in the State. Such benevolent act on the part of the State, unless there exists any statutory interdict, should be given full effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower level screening committee, with effect from June 20, 1989, there was no occasion to reach a conclusion that no eligibility or exemption could be granted prior to the date of registration. In the eligibility certificate issued on January 25, 1990, the registration numbers of the existing unit have been mentioned. The relevant column for the registration certificate number of the new diversified unit has not been filled in the eligibility certificate. The certificate was issued for a period of seven years starting from June 20, 1989. Therefore, the lower level screening committee did not consider it necessary that the new diversified unit should have immediately obtained the registration certificate under the Act. Even if it was an error, that could be rectified by the lower level screening committee only. In the exemption certificate the Deputy Excise and Taxation Commissioner has given the registration number JAG-HGST-6654 valid from January 25, 1990. It is thus clear that the authority issuing the exemption certificate took notice of the registration certificate obtained by the diversified unit and found it appropriate to grant exemption from the date of commencement of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Incentives under 1989 Policy 6. Sales/Purchase Tax Exemption and Sales Tax Deferment 6.1 Eligibility.-(1) Subject to provisions of rule 4.3, incentives under this rule shall be admissible to a unit which is registered as a dealer under the Punjab General Sales Tax/Central Sales Tax Act. (2) to (4) . . . 6.2 Quantum of entitlement.-(1) Sales/purchase tax exemption or sales tax deferment shall be available to units in different growth areas subject to maximum benefits to be regulated as per table I which reads as under: Category (Backwardness) SSI Medium and large Time limit Maximum limit A 150% of FCI (fixed capital investment) 125% of FCI (fixed capital investment) Nine years from the date of starting production 6.00 crores B 125% of FCI 100% of FCI Seven years from the date of starting production. 4.50 crores C 100% of FCI 90% of FCI Five years from the date of starting production. 3.00 crores (2) and (3) . . . Reference was also made to clause (4) which reads thus: (4) The expansion and/or modernization part shall be considered as an independent identity for the purpose of sales tax concession and industrial unit shall obtain a separate sales tax regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e competent authority of the Department of Industries and which has not been included in the negative list; (ii), (iii) and (2) . . . 4. . . . 5. Mode of availing benefit of deferment of or exemption from the liability to pay tax.-(1) A unit in respect of which eligibility certificate has been issued shall within a period of thirty days from the date of its issue make an application for the grant of benefit of deferment of or exemption form, the liability to pay tax in form ST (D and E) I to the prescribed authority. The prescribed authority shall issue certificate in form ST (D and E) I within a period of thirty days of receipt of the application which should be complete in all respects. In case, the certificate is not issued within thirty days, the prescribed authority shall record the reasons for the delay. (2) The application made under sub-rule (1) shall be accompanied with the eligibility certificate and other relevant documents specified in the application form ST (D and E) I. (3) On receipt of the application under sub-rule (1), the prescribed authority shall make such enquiries as may be considered necessary by it. (4) to (7) . . . 8. Cancellation of deferment or ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that where eligibility certificate had been granted by the Department of Industries, the same could not be cancelled by the sales tax authorities. Relevant observations are as under (pages 86 and 87 in 142 STC): "Furthermore under the incentive scheme in question, there was only one method of verifying the eligibility for the various incentives granted including sales tax exemption. The procedure was for the matter to be scrutinized and recommended by the State Level Committee and District Level Committee and the certification by the Department of industries and commerce by issuing an eligibility certificate. There was no other method prescribed under the scheme for determining an industrial unit's eligibility for the benefits granted. The Department of Industries and Commerce having exercised its mind, and having granted the final eligibility certificate (which was valid at all material times), the Commercial Taxes Department could not go beyond the same. More so when the Commissioner, Sales Tax, had accepted the eligibility certificate issued to the appellant and had separately notified the appellant's eligibility for exemption under the 1993 G. O. In these circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor the Assistant Commissioner nor the Sales Tax Officer had been conferred any power either to grant any exemption or sit in judgment over the grant of exemption. ... We are, therefore, of the view that the Sales Tax Officer, has no jurisdiction to call in question the grant of eligibility certificate. Various notifications preceding the notification dated December 26, 1985, are notifications which are prior to the introduction of section 4A(2)(d). They would not be relevant for the purposes of this case. The provision requiring a manufacturer furnishing to the assessing authority an eligibility certificate granted by such officer was enforced only from September 13, 1985. Therefore, the concluding words of the aforesaid sub-section, viz., 'in accordance with such procedure as may be specified' would only be such procedure as has been specified after coming into force of section 4A(2)(d). Prior to the coming into force of this section the stand of the respondents is that even if a matter was in consideration for grant of exemption declaration that it is a new unit, no assessment was made. The position even after the amendment has been clarified by means of the notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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