Patna High Court
Kailash Roller Flour Mills And Ors. vs Assistant Commissioner Of Commercial ... on 8 July, 1980
Equivalent citations: [1981]48STC297(PAT)
JUDGMENT S.K. Jha, J.
1. There seems to be no end to the conundrums suggested at the Bar regarding the interpretation of two notifications which I shall hereinafter mention and, I suppose, there will be no end to those conundrums until such notifications are effaced and fresh notifications, if any, in more concise and unequivocal terms are issued should the State Government so choose. The two notifications in question are both dated 18th January, 1977, being S. 0. Nos. 139 and 141 issued by the State Government, the former relating to the exemption of general sales tax and special sales tax on sales of finished products by newly setup small-scale industrial units and the latter granting exemption from the levy of both "general sales tax" and "special sales tax" or "purchase tax" on sales of such raw materials to the owners of the newly set-up small-scale industrial units. So far as C. W. J. C. Nos. 214 of 1979 (R) and 173 of 1977 (R) are concerned, the question involved is merely the interpretation of Notification No. 141 aforementioned, whereas in the other writ applications, which fall for our consideration, both the notifications (Nos. 139 and 141) aforementioned are involved. It may be worthwhile to mention here that so far as C. W. J. C. Nos. 10 and 244 of 1979 (R) are concerned, there is an additional point involved which shall be dealt with while dealing with those cases. Since principles of construction of the notifications in question would be the same affecting either one or all of these cases, I propose to deliver this common judgment dwelling upon the interpretation of the notifications in question and then apply the principle evolved to the facts of each particular case. I, therefore, intend by this common judgment to decide the paramount question of law involved in the first instance and then refer to the relevant facts relating to each case and the reliefs claimed in the case which ought or ought not to be allowed.
2. This then impels me to go to interpret straightway the true meaning and purport of the notifications in question, namely, S. O. Nos. 139 and 141 both dated 18th January, 1977, as aforementioned. Even so, it would be worthwhile to bear in mind that the interpretation of one notification will govern the interpretation of the other also because the only important difference between the two notifications, as I have hinted at earlier, is that so far as Notification S. O. No. 141 is concerned, it relates to exemption from the levy of general sales tax and special sales tax or purchase tax in respect of sales of raw materials to the owners of newly set-up small-scale industrial units whereas S. O. No. 139 relates to the exemption from the levy of both general sales tax and special sales tax on sales of finished products by the owners of the newly set-up small-scale industries at the first stage of sale after production.
3. To deal with the interpretation of S. O. No. 141 first, it may not be out of place to give a short history, admitted as it is, of the statutory notifications in respect of exemption from the levy of both general sales tax and special sales tax or purchase tax on sales of raw materials to the owners of such industrial units. Under the Bihar Sales Tax Act, 1959 (Bihar Act 19 of 1959), hereinafter referred to as the Act, Section 4 provides for exemption of taxes on sales or purchases of goods of certain categories. Section 4(3)(b) of the Act provides that "the State Government may, by notification and subject to such conditions or restrictions as it may impose, exempt from the levy of the general sales tax or special sales tax or both or the levy of purchase tax-sales of any goods or class or description of goods to or by any class of dealers". By virtue of such powers vested in the State Government, by a Notification No. STGL-E-1013/69-9926 F. T. dated 19th September, 1969, the Governor of Bihar was pleased to exempt from the levy of both "general sales tax" and "special sales tax" sales of such raw materials to the owner of newly set-up small-scale industrial unit approved and registered by the Industries Department of the Government of Bihar for a period of five years from the date the industry starts its production as are specified in the certificate in form B obtained by him from the relevant authorities of the Commercial Taxes Department after filing an application in form A and subject to certain conditions. We are not concerned in these cases with the conditions attached. The explanation incorporated in the notification read thus:
(1) 'Small-scale industry' means an industrial unit with an investment up to Rs. 7.5 lakhs on plant and machinery excluding the value of land and building and is approved and registered by Industries Department of Government of Bihar.
(2) 'Newly set-up small-scale industrial units' include such units which have already been set up but have not yet completed a period of 5 years from the date of starting production.
2. This notification shall remain in force from the 19th June, 1969, to the 31st March, 1974.
And then we find Notification No. STGL-1023/73 (S. 0.353) dated 14th March, 1974, which was, for all practical purposes, in identical terms and which expressly mentioned that the explanation to this notification of 1974 would be the same as in Notification No. 9926 dated 19th September, 1969. - This notification was sought to come into force with effect from 1st April, 1974, and was to remain in force till 31st March, 1979. This exemption, however, was withdrawn by the Government of Bihar with effect from 1st July, 1976, under Notification No. S. 0.1082 dated 30th June, 1976. Then came the notification dated 18th January, 1977, numbered S. O. 141, the relevant portions of which I shall reproduce hereinafter but before I do that, in the fitness of things, it must be said that the Act was repealed by Bihar Sales Tax Ordinance No. 209 of 1976 and subsequent Ordinances in identical terms, namely, Ordinances Nos. 30 of 1977, 38 of 1977, 101 of 1977, 163 of 1977, 208 of 1977, 221 of 1977, 257 of 1977, 34 of 1978 and 97 of 1978. Notwithstanding such repeal, by virtue of Section 54(2) of the 1976 Ordinance and subsequent Ordinances, the notifications issued under the Act continued to remain in force and retained their validity.
4. I may now reproduce the relevant portions of Notification No. S. 0.141:
...the Governor of Bihar is pleased to exempt from the levy of both 'general sales tax' and 'special sales tax' or 'purchase tax', sales of such raw materials to the owner of newly set-up small-scale industrial unit approved and registered by the Industries Department of the Government of Bihar for a period of five years from the date the industry starts its production, as are specified in the certificate in form B (appended hereto) obtained by him from the Assistant Commissioner/Superintendent of the circle where the industry is established, after filing an application in form A (appended hereto) and are required by him directly for use in the manufacture of goods for sale within the State or in the course of inter-State trade or commerce or export outside the territory of India, subject to the conditions that...
Explanation.-(1) 'Small-scale industry' means an industrial unit with an investment up to Rs. 10 lakhs on plant and machinery excluding the value of land and building and approved and registered by the Industries Department of Government of Bihar and accepted as small-scale industry after verification by the Assistant Commissioner/Superintendent of Commercial Taxes of the circle within whose jurisdiction such industry is situated.
(2) Newly set-up small-scale industrial units include such units which have already been set up but have not yet completed a period of five years from the date of starting production.
2. This notification shall come into force with effect from 1st July, 1976, and shall remain in force till 31st March, 1979.
I have deliberately omitted to quote the conditions laid down in forms A, B and C appended to the notification for they have no relevancy for the purpose of deciding these cases. According to the contention of Mr. A. K. Sen and Dr. D. Pal, the learned counsel appearing on behalf of the petitioners, the notification exempting the taxes on sales of the specified raw materials is to remain available for a period of five years from the date the industry starts its production whereas, according to the stand taken by the respondents, the exemption granted under the notification to the owner of any newly set-up small-scale industrial unit can in no case be available to him beyond 31st March, 1979. This is the primary question which falls for our consideration in these cases.
5. Although the learned counsel for the parties dwelt at some length upon the duty of the court either to have a "literal approach" or a "purposive approach" as was thought to suit either of the contesting parties, this distinction between the literal approach and the purposive approach, as Lord Diplock termed them in the case of Kammins Ltd. v. Zenith Investments Ltd. [1971] A.C. 850 at 881 is of little consequence in construing the notification in question. The more apt and universally accepted principle of construction of such statutes or statutory instruments to be applied in the instant cases is that the statute or the instrument must be read as a whole and we should resort to a construction which would not leave without effect any part of the language used in the notification. The notification has to be read as a whole, absurdities have to be avoided and a meaning has to be given to every part of the notification and all possible or apparent anomalies have to be reconciled. I shall, therefore, look to the express language used. The exemption from the levy of general sales tax, special sales tax or purchase tax on sales of specified raw materials to the owners of newly setup small-scale industrial units as approved and registered by the Industries Department has been expressly and unequivocally granted for a period of 5 years from the date the industry starts its production. That is a substantive and operative part of the notification. It admits of no ambiguity at all. Although the notification dated 18th January, 1977, has been made effective retrospectively from 1st July, 1976, by clause 2, a legal fiction has been created to embrace within the definition of "small-scale industrial units" such units as have already been set up before the commencement of the notification but had not completed a period of 5 years from the date of starting the production. The dominant intention, or if I may say so, the only intention by the express words used either in the first substantive portion of the notification or in the legal fiction created by clause 2 is to grant such an exemption for a period of five years from the date the production starts. To take an example, supposing a newly set-up small-scale industrial unit started its production, say, on 1st May, 1972, but had not completed a period of 5 years, from the date the production started, on 1st July, 1976, it shall yet be given the immunity from levy of the taxes mentioned above on purchase of raw materials up to 30th April, 1977. So also in the case of an industrial unit (small-scale) which had started production on 1st April, 1974, it shall be granted the exemption for a period of 5 years ending on 31st March, 1979. This position was conceded by the learned State counsel appearing for all the respondents. -I, therefore, can see no reason as to why a newly set-up small-scale industrial unit starting production on, say, 2nd July, 1976. shall not be granted an exemption for a period of 5 years from the date of start of production, namely, up to 1st July, 1981. Why should the period of exemption granted by the notification for a period of 5 years be cut down in such cases ? But then Mr. Ramnandan Sahai Sinha, the learned Government Pleader appearing for the respondents, tried to persuade us to whittle down the impact of the period of 5 years by inviting our attention to the fact that the notification was to remain in force only till 31st March, 1979, and, therefore, no exemption under the notification could extend beyond that date. I intend to test the validity of this contention by taking a more extreme case. Say, for example, a small-scale industrial unit Z was set up on 1st January, 1977, and it started production, say, on 2nd January, 1977. Then, according to the contention of the learned Government Pleader, Z will get an exemption not for a period of 5 years from the date of start of production but for a period of 2 years and a little more. Does that not look absurd ? Will not such a construction lead to absurd inconvenience and anomalous situation ? Let me test in the background of the previous notifications which, I think, in the circumstances of these cases, it shall be legitimate for me to do. A small-scale industrial unit set up after 1st April, 1974, and having started its production on 2nd April, 1974, was to get an exemption for 5 years under the notification of 1974 which was also to lapse on 31st March, 1979. The 1974 notification, as I have already mentioned above, was rescinded by the 1976 notification with effect from 1st July, 1976, and yet that small-scale industry gets the advantage of this full 5 years' period or a little less under the notification in question, namely, No. 141 dated 18th January, 1977. Was the intention of the State Government to create such absurdities, anomalies and disparities ? What was the purpose of granting these exemptions to the newly set-up small-scale industries ? The answer, as admitted at all hands, is to give incentive to the public to establish small-scale industrial units in this still under-developed industrial State. The learned counsel for the petitioners submitted that having unequivocally represented to the people investing capital up to 10 lacs of rupees for setting up a small-scale industrial unit that they shall be immune from the levy of general sales tax and special sales tax or purchase tax for a period of 5 years from the date of start of its production, and on such a representation of an owner having so invested his money over the industrial growth on small-scale of the State during the effectiveness or continuance of the notification in question, how can he be sought to be deprived of the exemption clause by the authorities of the commercial taxes department which would be at liberty to cut down the period of exemption to a ridiculous farce in the case of newly set-up small-scale industrial units starting production, say, sometime in January, 1979? There is much force in this contention. I may not be misunderstood to mean that I am invoking the principle of quasi-estoppel or equitable estoppel or promissory estoppel in such cases. All I wish to emphasise is that the construction put upon the statutory instrument by the learned State counsel would lead to manifest. injustice, absurd inconvenience and ridiculous anomalies and that too in the face of unequivocal, express language of the notification itself which has not minced words to say that ,the exemption shall be granted for a period of 5 years from the date of start of production. The learned Government Pleader then confronted, if at all that expression may be used, us with the question as to what would be the meaning to be given to the last part of the notification which says that it shall remain in force till 31st March, 1979, only. I, for one, wish to retort that this so-called or apparent anomaly which the learned Government Pleader sees in the notification is not an anomaly at all and it can very well be reconciled with the period of exemption for 5 years. Clause 2 of the notification, namely, that it shall be deemed to have come into force with effect from 1st July, 1976, and shall remain in force till 31st March, 1979, can, in the circumstances, mean, according to me, only this: that any small-scale industrial unit set up and starting production on and from 1st July, 1976, and up to 31st March, 1979, or such unit as had not completed 5 years from the date of start of production on 1st July, 1976, shall be entitled to the exemption of the taxes concerned for a period of 5 years from the date of start of production. This will lead to no anomaly. This construction will give effect to every word used in the notification. This construction would be in consonance with the fulfilment of the desire of the State Government to have industrial growth in the State within the period stipulated. All anomalies shall be resolved by such construction and no absurd inconvenience is to follow-no manifest injustice is to result. This, therefore, is how I construe the true meaning and purport of Notification No. S.O. 141 dated 18th January, 1977. In doing so, I must make it clear, lest I be misunderstood, that I am not oblivious of one of the well-settled principles of construction of taxing statutes that, as Lord Young said in Hogg v. Parochial Board of Auchtermuchty (1880)7 R. (Sc.) 986, as quoted by Craies on Statute Law, 7th Edition, page 116 :
...in dubio, I should deem it the duty of the court to reject any construction of a modern statute which implied the extension of a class privilege of exemption from taxation, provided the language reasonably admitted of another interpretation.
For the purpose of construction put by me, I have taken the language of the notification which does not even reasonably admit of another interpretation, but, perchance, as was contended by the learned counsel for the petitioners, two interpretations were possible, even in cases of exemption, the interpretation more favourable to the assessee should be preferred, as was done in the ease of Alladi Venkateswarlu v. Government of Andhra Pradesh A.I.R. 1978 S.C. 945, where, while dealing with the cases of exemption under the Andhra Pradesh General Sales Tax Act, 1957, and the validity of such an exemption, it was held towards the end of paragraph 11 :
...in any case, if two interpretations of a provision are possible, we think that we ought to, in such a case, apply the principle that the interpretation which favours the assessee should be preferred.
6. It now falls upon me to construe the other notification, namely, S. O. No. 139 dated 18th January, 1977. As I have already hinted at earlier, the only important difference between the notification which I have already construed and this notification is that the other notification dealt with exemption of levy of the taxes mentioned therein on sales to owners of newly set-up small-scale industrial units whereas this notification (S. O. 139) deals with exemption from the levy of general sales tax and special sales tax on finished products at the first stage of sale for a period of 5 years from the date of start of production. I may usefully emphasise this difference between the two notifications by extracting the relevant portion of S. 0. 139 here:
S. 0.139.-In exercise of the powers conferred by Clause (b) of Sub-section (3) of Section 4 of the Bihar Sales Tax Act, 1969 (Bihar Act XIX of 1959), the Governor of Bihar is pleased to exempt from the levy of both 'general sales tax' and 'special sales tax' sales of finished products by newly set-up small-scale industries which have already gone into production prior to 1st July, 1976, at the first stage of sale after production for a period of 5 years from the date the industry starts its production....
In all other respects for all relevant purposes, the provisions of this notification are mutatis mutandis the same as in Notification No. S.O. 141 dated 18th January, 1977. Even in respect of the historial background culminating in this notification, both the notifications in question stand at par. Even the dates of the earlier notifications in respect of exemption on sales at first stage are the same as relating to the exemption from levy of purchase tax, etc., on the sales of raw materials to the owners of the newly set-up small-scale industrial units.
Following the same principle of construction as I have done in respect of Notification No. 141 and construing the matter in all its ramifications, I have no hesitation in holding that even in respect of Notification No. 139 the exemption from levy of both general sales tax and special sales tax on sales of finished products by newly set-up small-scale industries which have already gone into production prior to 1st July, 1976, at the first stage of sale after production shall be for a period of 5 years from the date the industry has started its production irrespective of the notification remaining in force till 31st March, 1979, only.
7. The primary duty of interpreting these statutory notifications having been discharged, I shall now proceed to the relevant facts, short as they are, of each individual case to find out, on the construction put by me, as to what extent, if any, are the petitioners in these cases entitled to any relief.
INDIVIDUAL CASES C.W.J.C. NO. 173 of 1977 (R)
8. The petitioner is a partnership firm registered in the name and style of Kailash Roller Flour Mills under the Indian Partnership Act, 1932, with the Registrar of Firms having its factory situated in the Adityapur Industrial Area, Gamaria, in the district of Singhbhum. The firm carries on the business, inter alia, of manufacture and sale of wheat products, namely, maida, suji, atta and bran. It is a small-scale industrial unit registered as such with the Adityapur Industrial Area Development Authority under a registration certificate dated 14th July, 1976, issued by the Managing Director, Adityapur Industrial Area Development Authority,, Directorate of Industries, Government of Bihar. In the certificate it is recorded that the date of commencement of production was 10th May, 1974. A copy of the aforesaid certificate has been marked annexure 1. It may thus be seen that the petitioner started production on a date when the 1974 notification was in force and had not completed a period of 5 years from such date. The petitioner requires wheat as raw material for use in the manufacture of the aforesaid wheat products which are manufactured for sale. By a letter covering an application in the prescribed form A both dated 30th March, 1977, addressed to the Assistant Commissioner of Commercial Taxes, Jamshedpur Circle, respondent No. 1, the petitioner prayed for the issuance of an appropriate certificate of exemption in the prescribed form B under Notification No. S. O. 141. Both the letter and the application in form A have been collectively marked annexure 2/3. This application, it seems, was perhaps received in the office of respondent No. 1 on 31st March, 1977. Respondent No. 1 by his order dated 19th May, 1977, a copy whereof has been marked annexure 3, accepted the position that the petitioner started production on 10th May, 1974. He, however, held that the petitioner's factory had been approved and recognised by the Department of Industries as a small-scale industrial unit on 9th June, 1976, and it had filed the petition for exemption certificate on 31st March, 1977. Therefore, the petitioner was entitled to tax-exemption certificate with effect from 31st March, 1977, which was the date of filing the petition, till 31st March, 1979. He, however, also held that since the date of start of production was 10th May, 1974, the relief of not collecting the sales tax from the customers and of not depositing the sales tax in the department, which has been enjoyed by the small-scale industrial unit before 1st July, 1976, be also granted to the petitioner. In pursuance of the aforesaid order of respondent No. 1, a certificate of exemption in the prescribed form B dated 20th May, 1977 (annexure 3/2), was issued to the petitioner, the relevant portion of which reads as follows:
This is to certify that sales to M/s. Kailash Roller Flour Mills of raw materials as specified in item 4 below shall be exempted from the levy of both general sales tax and the special sales tax or purchase tax.
2. This certificate is valid up to 31st March, 1979.
Thereafter followed the particulars with which we are not concerned.
9. In this application the petitioner has challenged the validity of the aforesaid order of respondent No. 1 marked annexure 3 and the certificate in form B marked annexure 3/2 aforementioned. The grievance of the petitioner is that it having been recognised and approved by the Industries Department, as I have said above, as a small-scale industrial unit and it having started its production on 10th May, 1974, it was entitled to an exemption from the relevant taxes on purchase of raw materials up to 9th May, 1979, and not only up to 31st March, 1979. According to the construction that I have put on Notification No. S. 0. 141, the petitioner's contention must be held to be valid. A writ of certiorari is, therefore, issued quashing that part of the order (annexure 3) passed by respondent No. 1 on 19th May, 1977, as well as of exemption certificate in form B dated 20th May, 1977 (annexure 3/2), by which the exemption certificate has been granted only up to 31st March, 1979, and a writ of mandamus is issued to the _ respondents to rectify the exemption certificate's validity date up to 9th May, 1979. It may not be out of place to point out here that although the exemption certificate in form B ought to have been issued under Notification No. S. O. 141, it has been wrongly issued under Notification No. S. O. 139. That also must be corrected by respondent No. 1.
C.W.J.C. No. 214 of 1979 (R)10. This case is also concerned with Notification No. S. O. 141 only. The petitioner, Shakti Chemical and Fertiliser Pvt. Ltd. is a private limited company under the Companies Act, 1956, having its registered office at Lokai, Kodarma, in the district of Hazaribagh. It carries on the production and sales of fertiliser granules as a small-scale industry. It is duly registered and approved as a small-scale industrial unit by the Directorate of Industries, Government of Bihar, initially on a temporary basis by an order dated 19th June, 1976, and subsequently on a permanent basis by an order dated 14th September, 1978. The petitioner's factory admittedly started its production 'on and from 2nd June, 1978. The petitioner applied to the Additional Superintendent of Commercial Taxes, Kodarma Special Circle, Jhumriteliya, who was the competent authority, for renewal of its exemption certificate on 28th March, 1979, as the original certificate of exemption in form D was expiring on 31st March, 1979. A copy of this letter has been marked annexure 3. Along with this letter the original certificate of exemption (annexure 2) was also enclosed, the endorsement on which at the left-hand side (top) showed that the exemption was valid till 31st March, 1979. On the application of the petitioner (annexure 3) itself, respondent No. 3 passed an order to the effect that so far the department had not received any Government order with regard to extension of relief of exemption for small-scale industry beyond 31st March, 1979, and, therefore, the question of extension of the exemption certificate beyond 31st March, 1979, was not possible. The petitioner challenges this order of respondent No. 3 as incorporated in annexure 3. This petition must succeed on the same ground as C. W. J. C. No. 173 of 1977 (R). The petitioner is entitled to the relief of exemption of general sales tax, special sales tax or purchase tax on the sale of raw materials made to it for a period of five years with effect from the date of start of production, namely, 2nd June, 1978. In other words, the petitioner is held entitled to such an exemption by virtue of Notification No. S. O. 141 up to 1st June, 1983, unless, in the meantime, such an exemption is withdrawn by any further notification which may be issued by the State Government, I am, therefore, constrained to quash the order passed by respondent No. 3 on the application made by the petitioner (annexure 3) itself and issue a writ of mandamus commanding respondent No. 3 and/or other respondents, who may be competent to deal with the matter, to extend the exemption as prayed for by the petitioner in pursuance of Notification No. S. O. 141 for a period of five years from the date of start of production as aforementioned.
11. By an order dated 9th April, 1979, when the application was admitted by a Bench of this Court and a rule nisi issued, an interim order was passed by the court restraining the respondents from realising and/or taking any steps for the imposition and realisation of purchase tax on raw materials in respect of the purchases effected by the petitioner subject to the condition that the petitioner shall furnish a bank guarantee to the extent of Rs. 10,000 in the State Bank of India, Kodarma Branch, in this Court within 10 days from the date of the order. The petitioner complied with this order in time. When the matter with regard to the interim relief came up for final hearing, both the parties were heard and a Bench of this Court made the order of interim stay (injunction) absolute on 17th May, 1979, subject to a further condition that the petitioner would furnish another bank guarantee for a further sum of Rs. 15,000 within one month from 17th May, 1979. We have been given to understand that this order was also duly complied with. As a result of the petitioner's success in this application, the two bank guarantees furnished by the petitioner in pursuance of the two orders of this Court shall stand discharged.
C.W.J.C. No. 192 of 1979 (R)12. In this writ petition the claim of exemption made by the petitioner is under both the notifications, namely, S. 0. 141 and S. O. 139.
13. The petitioner is a partnership firm registered under the Indian Partnership Act, the names of the partners having been enumerated in paragraph 1 of the petition. It carries on the business of manufacture and sale of M. S. wire, aluminium wire, wire nail and copper wire. It has its factory for the manufacture of wire and wire nail at Sundernagar, Tatanagar (Jamshedpur). It is a small-scale industrial unit duly registered with the Directorate of Industries of the State Government under a registration certificate dated 12th April, 1977. The production of the said factory started from 23rd June, 1976, which is borne out by the certificate itself, a copy whereof has been marked annexure 1. On 15th April, 1977, the petitioner made an application for exemption certificate under both the notifications in question, which is apparent from the order dated 16th April, 1977, passed by the Assistant Commissioner of Commercial Taxes, respondent No. 1, which is incorporated in annexure 3(a). On the basis of the aforesaid order, an exemption certificate in prescribed form B was issued on 18th April, 1977, granting exemption to the petitioner only up to 31st March, 1979. A copy of the aforesaid certificate of exemption has been marked annexure 3(b). The petitioner thereafter filed a revision application before the Joint Commissioner of Commercial Taxes, Jamshedpur Division, respondent No. 2, complaining that it was entitled to get exemption for a period of 5 years from the date of start of production (namely, 23rd June, 1976), i.e., up to 22nd June, 1981. A copy of the revision application has been marked annexure 4. By an order dated 17th March, 1979 (annexure 5), the Joint Commissioner, respondent No. 2, rejected the petitioner's revision application and upheld the order of respondent No. 1 granting exemption only up to 31st March, 1979. The petitioner has challenged the legality and validity of the said order dated 16th April, 1977 [annexure 3(a)], the exemption granted only up to 31st March, 1979 [annexure 3(b)], and the revisional order dated 17th March, 1979 (annexure 5), passed by respondent No. 2.
14. For the reasons hereinbefore given, the petitioner is entitled to the reliefs as prayed for. A writ of certiorari is issued quashing that part of the order of respondent No. 1 and that of the certificate [annexure 3(b)] by which the exemption has been granted only up to 31st March, 1979, as also the revisional order of respondent No. 2 and a writ of mandamus is issued to the respondents to rectify the certificate of exemption [annexure 3(b)] granted to the petitioner for a period ending on 22nd June, 1981, subject, of course, to the State Government issuing any fresh notification revoking the exemption.
15. In this case also when the application was admitted and a rule nisi issued on 30th March, 1979, a Bench of this Court passed an interim order restraining the respondents from realising and/or taking any step for the imposition and realisation of the sales tax and purchase tax both in respect of the sales and purchases effected by the petitioner subject to the condition that the petitioner would furnish a bank guarantee to the extent of Rs. 10,000 on the State Bank of India, Jugsalai Branch, within 10 days of that order. We are informed that the petitioner has complied with that order of this Court. In view of the petitioner's success in this case, the bank guarantee furnished by the petitioner in pursuance of this Court's order dated 30th March, 1979, shall also stand discharged.
C.W.J.C. No. 314 of 1979 (R)16. In this case also the points involved are identical to those in C. W. J. C. No. 192 of 1979 (R).
17. The petitioner is a partnership firm registered under the Indian Partnership Act, the partner's names having been given in paragraph 3 of the writ petition. It carries on the business of manufacture and sale of ferro-vanadium. It has its factory for the manufacture of the aforesaid material at Ranchi. It is duly registered as a small-scale industrial unit with the Directorate of Industries of the State Government under a registration certificate dated 28th March, 1977, a copy whereof has been marked annexure 1 to the writ petition. From the certificate (annexure 1) itself it appears that the production in the said factory started from 28th April, 1976. By an order dated 14th April, 1977 (annexure 3), passed by the Assistant Commissioner of Commercial Taxes, respondent No. 1, the petitioner was ordered to be granted exemption only up to 31st March, 1979, both under Notifications Nos. 141 and 139. Pursuant to the aforesaid order, a certificate of exemption in form B [annexure 3(a)] was issued on 16th April, 1977, to the petitioner valid only up to 31st March, 1979. The petitioner, it seems, under an erroneous impression filed an application for review before the Assistant Commissioner of Commercial Taxes, Ranchi North Circle, respondent No. 1, who rejected the same on 3rd March, 1979, a copy of which order has been marked annexure 5. On these facts, I hold that the petitioner is entitled to exemption under both the notifications, namely, S. O. 141 and S. O. 139, for a period of five years starting from 28th April, 1976, and ending on 27th April, 1981, subject, of course, to any fresh notification revoking the exemption being issued by the State Government.
18. In this case also in pursuance of the order dated 18th May, 1979, passed by a Bench of this Court, the petitioner furnished a bank guarantee of a sum of Rs. 15,000 as a condition for the interim relief that the respondents be restrained from realising both sales tax and purchase tax. In view of the fact that the petitioner has succeeded in this application and that a writ of certiorari is issued quashing that part of the impugned annexures by which the petitioner has been granted exemption certificate only up to 31st March, 1979, and a writ of mandamus is issued to the respondents commanding them in the term aforementioned, the petitioner shall stand discharged from the bank guarantee furnished by it.
C. W. J. C. No. 10 of 1979 (R)19. The petitioner is a partnership firm and is manufacturing dal from cereals under the name and style of Messrs. Om Dal and Oil Mills at Ranchi. It started production on and from 17th March, 1974. It is admittedly a small-scale industrial unit duly approved and registered by the Industries Department. On 30th March, 1974, a certificate of registration from the Industries Department was granted to the petitioner (vide annexure 1). On 25th June, 1974, an order was passed for grant of exemption certificate to the petitioner valid up to 16th March, 1979, which was prepared, dated and signed and was ordered to be issued. This is borne out by the order dated 25th June, 1974, which is a part of the order sheet contained in annexure 10 to the petitioner's reply to the counter-affidavit filed on behalf of the respondents. Pursuant to that order, a certificate of exemption was duly issued to the petitioner in form B clearly mentioning that the certificate was valid up to 16th March, 1979. A copy of this certificate has been marked annexure 3 to the writ petition. On 4th December, 1976, however, the Commissioner of Commercial Taxes, Bihar, respondent No. 2, issued letter No. 137 to all officers in-charge of circles directing them to restrict the validity of exemption up to the month of March, 1977, only. A copy of the aforesaid letter has been marked annexure 4. In the said letter there is some reference to a circular of the Industries Department on the basis of which this restriction was sought to be imposed. The petitioner was thereafter called upon to produce its exemption certificate in form B (annexure 3), at the top right-hand side of which the certificate was revalidated for the period up to 31st March, 1977, duly signed by the Assistant Commissioner, respondent No. 4, and dated 25th May, 1977. The petitioner has raised a grievance with regard to the legality of the change in the date of the validity of the exemption certificate from 16th March, 1979, to 31st March, 1977, only and has also attacked the letter issued by the Commissioner in so fas as the petitioner's industrial unit is concerned.
20. As is evident, from the facts stated above, the petitioner was originally granted an exemption for a period of full five years. By virtue of the letter of the Commissioner, respondent No. 2, the period of validity of the exemption certificate was reduced from 16th March, 1979, to 31st March, 1977. When we called upon the learned Government Pleader to state as to on what basis such a letter was issued and such a restriction to the prejudice of the petitioner was imposed in annexure 3, the original exemption certificate, by reducing the period, he was unable to support the stand of the respondents. He was not able to show to us any notification of the State Government which could in any way whittle down the effect of the Notifications S. O.141 and S.O. 139 with regard to the dal mills although they were newly set-up industrial units recognised by the Government. In that view of the matter, I am constrained to quash the endorsement on the right-hand side (top) of annexure 3 by which the validity of the exemption certificate was changed from 16th March, 1979, to 31st March, 1977. Let a writ of mandamus, therefore, issue to the respondents to restore the validity of the petitioner's exemption certificate as contained in annexure 3 up to 16th March, 1979, as was originally done by respondent No. 4 himself.
C.W.J.C. No. 244 of 1979 (R)21. The point involved in this case is identical to that in C. W. J. C. No. 10 of 1979 (R).
22. The petitioner is a partnership firm duly registered under the Indian Partnership Act, the names of the partners having been given in paragraph 1 of the petition. The petitioner carries on the business of manufacture and sale of dalmot and sattu from 24th July, 1974, and manufacture and sale of pulses from 24th October, 1975. It has its factory for the manufacture of dalmot and sattu and pulses in the town of Ranchi. It is a small-scale industrial unit duly registered by the Directorate of Industries of the State Government under registration certificate dated 12th May, 1977. As has already been stated above, the petitioner started production of dalmot and sattu on and from 24th July, 1974, and of pulses from 24th October, 1975. A copy of the aforesaid registration certificate has been marked annexure 1. By an order dated 9th September, 1974, the Assistant Commissioner of Commercial Taxes, respondent No. 1, recorded that the petitioner was a small-scale industrial unit and was registered as such and that its first production started on 24th July, 1974. The petitioner was, therefore, eligible for grant of exemption. This order is a part of the order sheet (annexure 3). As a result of the aforesaid order, a certificate of exemption from the levy of both general sales tax and special sales tax as well as purchase tax was issued in form B and it was specifically mentioned in the certificate that it would be valid up to 31st March, 1979. A copy of the certificate has been marked annexure 3(a). On 5th September, 1975, the Industrial Development Commissioner, respondent No. 4, issued a circular to the effect that the Government had decided to deprive the industries specified therein from the facilities granted under some resolution dated 29th May, 1973. The special industries included dal mill. It was, however, stated that such industries shall continue to remain registered as small-scale industry but they will not get any facility except assistance from financial institution. On 11th May, 1976, however, a circular was issued by the Industries Department restoring the exemption up to 31st March, 1977, to dal mill. On 4th December, 1976, the Commissioner of Commercial Taxes, respondent No. 3, issued a circular/letter to the effect that in view of the Industries Department's circular referred to above, the exemption facilities would be made available to those industries up to 31st March, 1977. It appears from the order dated 2nd May, 1977, which is a part of annexure 3, that the benefits of exemption from payment of sales tax on purchase of raw materials as well as on sale of finished goods having been restored under Notifications Nos. S. O. 141 and S. 0. 139 the exemption certificate be revalidated. It was accordingly revalidated up to 31st March, 1979, as already mentioned above. By an order dated 28th July, 1977, however, which also forms part of annexure 3, respondent No. 1 directed to amend the exemption certificate making it valid only up to 31st March, 1977, in pursuance of a resolution dated 11th May, 1976, of the Industries Department and communicated by a letter dated 4th December, 1976, of the Commissioner of Commercial Taxes, respondent No. 3, in respect of the mills producing dal.
23. For the reasons as given in C.W.J.C. No. 10 of 1979 (R), the order dated 28th July, 1977, passed by respondent No. 1 cannot be sustained and the direction for amendment of the exemption certificate valid only up to 31st March, 1977, is quashed. The petitioner undoubtedly being a newly set-up small-scale industrial unit and having started its first production on 24th July, 1974, would be entitled to an exemption under both the notifications for a period of five years from that date, namely, up to 23rd July, 1979. Both the orders, therefore, namely, the initial one granting the validity of the exemption certificate up to 31st March, 1979, and the revised one restricting it up to 31st March, 1977, are held to be bad and are quashed. Let a writ of mandamus issue to the respondents to grant certificate of exemption in terms of both Notifications Nos. S. O. 141 and S. 0. 139 to the petitioner up to 23rd July, 1979. There is, however, no force in the contention of Dr. Pal that the petitioner should be granted an exemption in respect of dal mill up to 23rd October, 1980, as the production of pulses had started on 24th October, 1975. It is not the intention of the notifications in question to grant an exemption in respect of each item of production or finished goods for sale. If there is a small-scale industrial unit registered for production of a number of items and even if it starts production of one item under its registration certificate, the date of production shall be computed from the date when such an industrial unit has started the first production of any one of the items.
24. In the result, therefore, all these writ applications are allowed in the terms as mentioned in each of the cases. In the circumstances of the cases, however, I shall make no order as to costs.
Misra, J.
25. I agree.