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TMI Blog2025 (4) TMI 1389X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the authorities below. 2. The facts are not in dispute. 3. The respondent is registered under the H.P. Value Added Tax Act (for short 'VAT Act') and Central Sales Tax Act, 1956 (for short 'CST Act') w.e.f. 24.07.2009. The respondent was earlier known as B. R. Ferro Steel and renamed as M/s Radiant Cement Company Pvt. Ltd., w.e.f. 18.12.2019 and is registered for manufacture of Non Alloys, Steel Hot Rolled Products, S.S. Flats, S.S. Ingots and M. S. Flats and Rounds and S. S. Rounds and was assessed for the year 2014-15 by creating an additional demand of Rs. 15,31,304/- under the CST Act by according following reasons:- "(i) "As per Government of Himachal Pradesh Excise and Taxation department vide notification No. EXN-F(1) 2/2004 (iii) dated 30-03-2005 had notified the industrial units not eligible for the central sales tax incentives. According to the above notification Sr. No. 22 mentioned is as under:- Sr. No. 22 "Mini Steel Plants Induction/Arc/Submerged, furnaces and or rolling Mills. And Subsequent notification EXN-F(5)-6/2006-Vol-l dated 01-04-2013 provides that in respect of the sale in the course of interstate trade or commerce of the goods (other than) tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as to willful default and the presence of mens rea, and allowed the appeal. 9. The reasoning as accorded by the learned Tribunal is as under:- "The Hon'ble Supreme court of India in the case of Lloyd Electric and Engineering... vs. State of Himachal Pradesh and Ors on 3 September, 2015 held that:- "The State Government cannot speak in two voices. Once the cabinet takes a policy decision to extend its 2004 Industrial Policy in the matter of CST concession to the eligible units beyond 31-03-2009, up to 31.03.2013, and the Notification dated 29-05-2009, accordingly, having been issued by the Department concerned, viz., Department of Industries, thereafter, the Excise and Laxation Department cannot take a different stand. What is given by the right hand cannot be taken by the left hand. The Government shall speak only in one voice. It has only one policy. The departments are to implement the Government policy and not their own policy'". In view of the observations made by the Hon'ble Supreme Court I am of the view that any industry which is cover under the concessional benefits of Industrial policy should be following one policy which is primarily industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal meant when it observed as under:- "The assessment done in this case should not had been done in a perfunctory manner and is warranted upon proper adjudication as to willful default and the presence of mens rea." 11. It is more than settled that it is the ratio of a case which is applicable and not what logically flows therefrom. A case is only an authority for what it actually decides and not logically flows from it. Observations of court are not to be read as Euclid's theorems nor as provisions of the statutes. These observations must be read in the context in which they appear and judgments of courts are not to be construed as statutes. 12. On the subject of precedents Lord Halsbury, L.C., said in Quinn vs. Leathem, 1901 AC 495: "Now before discussing the case of Allen Vs. Flood (1898) AC1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which could impede it." 17. In Ambica Quarry Works v. State of Gujarat and others (1987) 1 SCC 213, the Hon'ble Supreme Court held that the ratio of any decision must be understood in the background of the facts of that case. Relying on Quinn v. Leathem (1901) AC 495, it has been held that the case is only an authority for what it actually decides, and not what logically flows from it. 18. In Krishena Kumar v. Union of India and others (1990) 4 SCC 207, the Constitution Bench of the Hon'ble Supreme Court while dealing with the concept of ratio decidendi, has referred to Caledonian Railway Co. v. Walker's Trustees (1882) 7 App Cas 259:46 LT 826 (HL) and Quinn (supra) and the observations made by Sir Frederick Pollock and thereafter proceeded to state as follows:- "The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre-existing rule o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 275, it has been stated by the Hon'ble Supreme Court thus:- "12......According to the well-settled theory of precedents, every decision contains three basic postulates: (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment." 22. In Oriental Insurance Co. Ltd. Vs. Smt. Raj Kumari and Ors.; 2007 (13) SCALE 113, the well-known proposition, namely, it is ratio of a case which is applicable and not what logically flows therefrom is enunciated in a lucid manner by the Hon'ble Supreme Court and it was observed thus: "10. Reliance on the decision without looking to the factual background of the case before it is clearly impermissible. A decision is a precedent on its own facts. Each case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... style. 24. Ratio decidendi of a judgment is not to be discerned from a stray word or phrase read in isolation (See: Arasmeta Captive Power Company Private Limited and another v. Lafarge India Private Limited AIR 2014 SC 525.) 25. The simple question before the learned Tribunal was whether the respondent despite falling in the negative list would still be entitled to the tax rebate as set out in the notification dated 01.04.2013, that too, for the period 2015-16, especially, when it was not disputed before the authorities below that the industrial unit of the respondent falls in the 'negative list'. 26. Adverting to the judgment of the Hon'ble Supreme Court, which formed the sole basis of allowing the claim of the respondent by the learned Tribunal, it needs to be noticed that the facts therein were that Industrial Policy 2004 was notified by the State of Himachal Pradesh providing for inter alia at Clause 10.3 concessional rate in Central Sales Tax, which reads as under:- "10.3 Central Sales Tax at a concessional rate of 1% shall be leviable on the goods manufactured by new and existing industrial units (as defined under these Rules) unless provided otherwise elsewhere under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication till 31.03.2009. These incentives were thereafter extended not only for five years up to 19.05.2009 but were thereafter extended vide notification dated 29.05.2009 upto 31.03.2013 or till the time CST is phased out or whichever is earlier. 28. It shall be apt to reproduce the notification, which reads as under:- "Notification In partial modification of this department notification No. Ind.A(F)6-7/2004 dated 30th December, 2004 notifying Industry Policy 2004 regarding grant of Incentives Concessions and Facilities to Industrial Units Himachal Pradesh-2004, the Governor, Himachal Pradesh is pleased to extend the incentive of validity of concessional rate of CST @ 1% upto 31.03.2013 in Rules 10.3 of Industry Policy, 2004 or till the time CST is phased out, whichever is earlier." 29. Thereafter, the Excise and Taxation Department of the State Government issued statutory Notification under Section 8 (5) (b) of the CST Act, which reads as under:- "2. Now, therefore, in exercise of the powers conferred by clause (b) of sub-section (5) of section "8 of the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), the Governor of Himachal Pradesh is pleased to direct that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 8 of the Central Sales Tax Act, 1956 (Act No. 74 of 1956), the Governor of Himachal Pradesh, is pleased to direct that in respect of the sale in the course of inter-state trade or commerce of the goods (other than those manufactured by the breweries, distilleries, non-fruits/vegetables based wineries and bottling plants (both of country liquor, Indian made foreign liquor) and industrial units specified in negative list) manufactured by the dealers running any existing industrial unit in the State of Himachal Pradesh, the tax levied under sub-section (1) of Section 8 of the Act ibid, shall be calculated and payable at a concessional rate of 1.5% of the taxable turnover of such goods with effect from 1st April, 2013 for a period of five years or till the implementation of the Goods and Services Tax, whichever is earlier." 32. This notification clearly excluded the industrial units specified in the negative list from the concessional rate of 1.5% of the taxable turnover of such goods w.e.f. 01.04.2013 for a period of five years or till the implementation of the Goods and Services Tax Act, whichever is earlier. 33. Admittedly, at the relevant period, the Goods and Services T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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