Madhya Pradesh High Court
Deora Wire And Wires And Anr. vs General Manager, Dic And Ors. on 5 December, 2000
Equivalent citations: [2001]123STC360(MP)
Author: A.M. Sapre
Bench: A.M. Sapre
ORDER A.M. Sapre, J.
1. The question that falls for consideration in this writ filed under Articles 226 and 227 of the Constitution by the petitioner is, whether the petitioner is entitled to claim extension in the period of exemption from payment of sales tax for a period of 278 days after December 15, 1989 ? To appreciate the grievance of the petitioner, few facts emerging from the record of the case set up by the parties need mention.
2. Petitioner is a small-scale industry. It has one industrial unit at Indore. It is engaged in the manufacture of various types of wire. It is registered as dealer under the provisions of State Sales Tax Laws.
3. In exercise of powers conferred under Section 12 of the Madhya Pradesh General Sales Tax Act (since repealed) the State has issued exemption Notification exempting certain specified categories of goods on fulfilment of certain conditions specified therein from payment of sales tax. In some cases, the notification provides for exemption from payment of sales tax and in some cases, it provides for deferment of its payment.
4. The petitioner pursuant to these notifications granting exemption, applied for taking benefit of the same. The petitioner was granted the benefit of notification for a period of three years effective from December 15, 1986 to December 14, 1989. In other words, during this period, the petitioner was not liable to pay sales tax on the goods manufactured by them in their unit.
5. On September 26, 1992, the petitioner made an application to the concerned authorities pointing out that during the exemption period, i.e., December 15, 1986 to December 14, 1989, the unit of petitioner remained closed for 278 days. It was pointed out that in the year 1989, i.e., from October 14, 1989 to October 24, 1989, i.e., for 11 days due to imposition of curfew in the entire city of Indore, the petitioner was prevented from running the unit. Likewise, in the year 1987 (April 1987 to September 1987) due to power cut enforced by M.P. Electricity Board, the petitioner was prevented from running the unit. Similarly during this period, due to non-supply of raw material by M.P. Laghu Udhyog Nigam to petitioner-unit and also due to non-availability of working capital, the petitioner could not run their unit. In all, thus, according to the petitioner, during the period of three years the petitioner was prevented by these aforementioned causes to run the unit for a total period of 278 days.
6. The petitioner therefore, relying upon the amendment made in exemption notification (annexure P9) claimed extension of period in the original exemption period by 278 days as according to the petitioner, the amendment made in the notification does give them a right to claim extension in the original period of three years if the unit had remained closed during exemption period on account of causes which were beyond the control of the petitioner. According to the petitioner all the four causes mentioned and relied on by them were satisfying the requirement of notification and secondly, these causes did constitute the cause beyond petitioner's control and hence entitled the petitioner to get an extension for the period when the unit was closed.
7. This application of the petitioner was rejected by the State by their order dated December 30, 1993 (annexure R3). In the opinion of State none of the causes so mentioned and relied on by the petitioner can be termed as causes beyond the petitioner's control. It was opined that in order to get the benefit of this notification the cause relied on should be such on which petitioner has no control and since none of these causes could be said to be causes on which petitioner has no control, no benefit of extension in period be given to the petitioner. It is this rejection which has given rise to filing of the petition and asked for its quashing and also for mandamus giving benefit to the petitioner for 278 days as claimed in the application.
8. The State by filing a return has supported the impugned rejection. According to State no case for quashing of order impugned is made out. It is contended that the order impugned contains reasons which are proper and reasonable and that they do satisfy and confirm the requirement of Notification dealing with the cases of extension of time. In substance, therefore, the State support the impugned order and the reasoning contained therein.
9. Heard Shri S. Abhyankar, learned counsel for the petitioners and Shri P. Verma, learned Government Advocate, for the respondents.
10. While attacking the reasoning of the State in rejecting the application made by the petitioner, learned counsel for the petitioner urged that if not all, at least reasoning of State in so far as it relates to the period of curfew was concerned cannot be said to be the cause in the hands of the petitioner. The submission was that closure of unit due to curfew can never be the cause attributable to petitioner but it was a cause beyond their reach and control entitling the petitioner to get an extension for that period. As far as other causes were concerned, learned counsel for the petitioner urged that even other causes satisfy the requirement of notification if examined on its correct perspective and the facts brought on record by the petitioner.
11. Learned counsel for the State while reiterating the stand taken by the State in the return urged for upholding of the entire order, learned counsel also supported the reasoning of State while dealing with the cause relied on by the petitioner. In his submission all the causes shown by the petitioner were very much within their control and hence no benefit was available to petitioner.
12. Having heard the learned counsel for the parties and having perused the record of the case, I am inclined to allow the petition in part.
13. On June 2, 1992 (annexure P9), the State as stated supra amended the exemption Notification and introduced following amendment by adding Clause (vi)(a) to paragraph 2 of the exemption Notification No. A-3-11-86(74)-ST/V, dated October 16, 1986 :
"Amendment.--In paragraph 2 of the said notification for Sub-clause (a) of Clause (vi), the following sub-clause shall be substituted namely :
(a) The dealer shall keep the industrial unit running, during the period of exemption and also for a period of five years from the date of expiry of the period of exemption. If, however, the dealer closed down the industrial unit during the period of exemption and restarts production in such unit subsequently after its revival and of the dealer proves to the satisfaction of the authority competent to decide the eligibility for exemption under this notification that the industrial unit had to be closed down for that period for reasons beyond his control, the dealer shall be eligible for exemption for a further period equal to the period during which the industrial unit Remained closed, commencing immediately after the expiry of the period of eligibility or from the date of restarting production in the unit after its revival, whichever is later.
Explanation.---The expression 'for reasons beyond his control' means 'fire or an accident in the factory which necessitates closure, strike by the recognised union, flood or earthquake'."
14. The question that really arises for consideration is whether all or any of the causes shown by the petitioner falls within the explanation appended to Clause (vi)(a) referred supra?
15. The question whether amendment has its application to the case of the petitioner need not be decided because, firstly, the application was not rejected by the State on this ground and secondly, this issue was not raised at the hearing by the State. In other words, while dealing with the application made by the petitioner, the State proceeded on the basis that the amendment has its application even to the case of the petitioner and the same was then rejected on its merits holding that the case of the petitioner does not fall in the explanation.
16. In my opinion, the expression "for reasons beyond his control" used in explanation to Sub-clause (a) of Clause (vi) supra would include the period of curfew entitling the petitioner to take benefit of that period. It cannot be said that the imposition of curfew in the area (Indore city) was within the control of the petitioner. It is an action to which the petitioner or to say any individual has no control. It is an act on the part of State to decide depending upon the law and order situation whether curfew in any particular locality/ area in the city should be imposed or not. The use of word beyond his control has to be given its logical meaning. During the period when curfew was imposed, no person could carry on any activity in the locality. The State was, therefore, not justified in holding that petitioner is not entitled to get an extension of time even for that period when curfew was in force. In my considered opinion, the petitioner was in terms of amended notification entitled to get an extension of time for that period when curfew was in force.
17. As regards other causes, such as non-availability of raw material, working capital and power cannot be said to be the causes beyond petitioner's control. What will be the causes which will be termed as causes (reasons) beyond petitioner's control are defined. None of these three causes fall in the categories specified in the explanation. These causes (reasons) were very much within the reach of the petitioner and for which the petitioner could have made alternative arrangements. The State was, therefore, justified in not accepting these causes to be the one falling in the explanation to Clause (vi)(a).
18. Accordingly and in view of aforesaid discussion, the petition partly succeed and is partly allowed. The impugned order dated December 30, 1993 (annexure R3) is set aside in part by writ of certiorari. It is held that the petitioner is entitled to get an extension of time for claiming exemption in payment of sales tax on the goods manufactured by them only for the period of 11 days over and above the initial period of three years because during the period October 14, 1989 to October 24, 1989 (11 days) the petitioner was prevented from running the unit on account of curfew in Indore city.
19. The respondents are now directed to pass consequential orders keeping in view the aforementioned writ issued and observations made so that benefit of sales tax in terms of aforementioned notifications be extended to the petitioner for 11 days. Let this be done within four months from the date of this order.
No costs. Security amount, if deposited by the petitioner, be refunded.