Andhra HC (Pre-Telangana)
Emjak Industries Limited vs Commercial Tax Officer And Ors. on 15 November, 1994
Equivalent citations: 1994(3)ALT565, [1995]97STC173(AP)
Author: Maithli Sharan
Bench: Maithli Sharan
JUDGMENT M.N. Rao, J.
1. The question at issue, in these two writ petitions is, whether the petitioners are "manufacturers" under section 5-B of the A.P. General Sales Tax Act, 1957, in order to claim the benefit of the lower rate of tax at four per cent. in respect of the raw materials purchased by them and utilised for the manufacture of finished products within the State ?
2. The petitioners in both the writ petitions are registered dealers under the A.P. General Sales Tax Act; they deal in biscuits. As the facts in both the cases are similar, suffice it to refer to the facts in one case briefly.
3. The petitioner in Writ Petition No. 14105 of 1990, viz., M/s. Emjak Industries Limited, is a registered dealer under the Andhra Pradesh General Sales Tax Act (hereinafter referred to as "the Act"), engaged in the business of manufacture and sale of biscuits known as "Ampro biscuits". It purchases raw materials such as maida, sugar, fats, chemicals and packing materials and claims to utilise the same in the manufacture of biscuits. It had entered into an agreement with the 4th respondent, viz., M/s. Ampro Food Products (P) Limited, Hyderabad, on August 26, 1987, under which the 4th respondent agreed to manufacture biscuits with the raw materials supplied by the petitioner, according to the requirements of the petitioner as per the terms and conditions incorporated in the agreement.
4. Section 5-B of the Act before it was amended by Act No. 4 of 1989 with effect from January 21, 1989, was in the following terms :
"5-B. Levy of concessional tax in respect of component parts, etc. - (1) Notwithstanding anything in this Act, every dealer shall pay, in respect of any sale of goods specified in a scheme published by the State Government by notification to another for use by the latter as raw material, component part, sub-assembly part, intermediate part, consumables and packing material of any other goods specified in the said scheme, which he intends to manufacture inside the State for sale in the State or in the course of inter-State trade or commerce, a tax, at such rate not exceeding four paise in the rupee, as may be specified in the said scheme, on the turnover relating to such sale :
Provided that the provisions of this section shall not apply to any sale unless the dealer selling the goods furnished to the assessing authority in the prescribed manner a declaration duly filled in and signed by the dealer to whom the goods are sold containing the prescribed particulars in the prescribed form obtained from the prescribed authority on payment of prescribed fee.
(2) ....................................
(3) If any person purchasing goods contravenes any of the provisions made by or under this section, the assessing authority may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one and half times the tax payable on the turnover relating to the sale of such goods at a rate which is equal to the rate fixed under the Act, less the rate of tax specified in the scheme published under sub-section (1) :
Provided that no prosecution for an offence under section 30 shall be instituted in respect of the same facts on which the penalty has been imposed under this section.
(4) The State Government, may, by notification, rescind, revoke, amend or vary any scheme referred to in this section."
5. From a reading of section 5-B of the Act, as it stood prior to January 21, 1989, it is fairly clear that in respect of the goods specified in the scheme published by the State Government, the rate of tax on the raw materials purchased for the manufacture of finished goods covered by the scheme shall not exceed four per cent. on the turnover relatable to such purchases of raw materials. The proviso to sub-section (2) contained the procedure for making declarations in order to claim the benefit of the lower rate of tax.
6. Rule 3(gg) of the Andhra Pradesh General Sales Tax Rules, 1957 (hereinafter referred to as "the Rules"), before its deletion in 1989 read :
'Manufacturer' means a person who purchases such component part or component parts as may be specified in the scheme or schemes published from time to time under section 5-B of the Act for use in the manufacture of such goods as may also be specified in the said scheme or schemes."
7. Rule 30-A of the Rules, as it stood prior to January 21, 1989, contained the procedure of preparing and issuing of declarations by the manufacturers in favour of the dealers from whom the raw materials were purchased by them at the concessional rate of tax laid down in section 5-B of the Act. The declaration, which the purchasing dealer was required to issue, was prescribed in form G and, on the strength of the declaration, after verifying the same, the assessing authority used to issue certificate in form H for claiming the concessional rate of tax.
8. It is not in dispute that prior to January 21, 1989, the petitioners were getting the benefit of lower rate of tax under section 5-B, as it stood then; their declarations were accepted and certificates were issued to them.
9. Section 5-B was amended by Ordinance 2 of 1989, which was replaced subsequently by Act No. 4 of 1989 with effect from January 21, 1989. After the amendment, section 5-B reads :
"Levy of concessional tax in respect of certain goods. - (1) Notwithstanding anything in this Act, every dealer shall pay, in respect of any sale of goods to another dealer for use by the latter as raw material, component part, sub-assembly part, intermediate part, consumables and packing material of any other goods which he intends to manufacture inside the State, a tax at the rate of four paise in the rupee or the rates specified in sections 5, 5-A and 6-B in respect of goods other than declared goods, or sections 6, 6-A and 6-B in respect of declared goods, whichever is lower on the turnover relating to such sale :
Provided that the provisions of this sub-section shall not apply to any sale unless the dealer selling the goods furnished to the assessing authority in the prescribed manner a declaration duly filled in and signed by the dealer to whom the goods are sold containing the prescribed particulars in the prescribed form obtained from the prescribed authority on payment of prescribed fee.
(2) If any dealer,
(i) not having his manufacturing unit within the State purchases any goods by furnishing a declaration under the proviso to sub-section (1); or
(ii) having his manufacturing unit within the State and having purchased goods by furnishing a declaration under the proviso to sub-section (1) sells such goods contrary to such declaration, the assessing authority, may after giving such dealer a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum which shall not be less than three times but which may extend to five times the amount of tax leviable on the sale of such goods so purchased.
(3) ......................."
10. One important change brought about by the Amendment Act No. 4 of 1989 is that it dispensed with the requirement of publication of a scheme by the State Government for the purpose of claiming the benefit of lower rate of tax. As a result of the Amendment Act No. 4 of 1989, the necessary consequential changes were effected in the statutory rules. Rule 3(gg) of the Rules relating to the definition of "manufacturer" was deleted. Rule 30-A was substituted and a new rule 30-B was inserted by G.O.Ms. No. 868, Revenue (C.T. II) dated August 29, 1989, in the place of the existing rule 30-A. Rule 30-A and rule 30-B read :
"30-A. (1) Every manufacturer who intends to purchase raw materials, component parts, sub-assembly parts, intermediate parts, consumables and packing materials for use in the manufacture of any other goods inside the State shall submit an application in form G1 to the assessing authority for registration as a manufacturer. Where the manufacturer has more than one place of manufacture a single application may be submitted for registration of all such places of manufacture :
(2) The assessing authority receiving the application shall, if he is satisfied after making such enquiry as he considers necessary that the application is bona fide and the particulars contained therein are correct and complete, register the manufacturer and shall issue a certificate to the manufacturer in form G2 within 30 days from the date of application. Where the manufacturer has more than one place of manufacture a copy of such certificate for every place of manufacture within the State shall be issued.
(3) Where the assessing authority is satisfied that the application is not bona fide and the particulars contained therein are not correct and complete, he may reject the application for reasons to be recorded in writing after giving an opportunity of making a representation against the rejection.
(4) No registration issued shall be sold or transferred.
(5) Where a dealer desires a certificate of registration issued under these rules be amended, he shall submit an application for this purpose to the assessing authority setting out the specific matters in respect of which he desires such amendments and the reasons therefor together with the certificate of registration and the copies thereof, if any, granted to him and such authority if satisfied with the reasons given, make such amendments as he thinks necessary in the certificate and the copies thereof, if any, granted to him.
(6) The certificate issued under sub-rule (2) shall be kept in a conspicuous place at the place of manufacture mentioned in such certificate and a copy of such certificate granted to every other place of manufacture shall be kept in a conspicuous place at that place of manufacture.
(7) Where the certificate issued under sub-rule (2) is lost/destroyed or defaced or mutilated, the manufacturer may on application made in this behalf to the assessing authority and on payment of fee of Rs. 5 obtain a duplicate copy of such certificate.
(8) The registration certificate under this rule gets cancelled automatically from the date of cancellation of registration certificate granted under section 12 of the Act.
30-B. (1)(a) Every manufacturer shall prepare a declaration in form 'G' in triplicate and issue the original and duplicate thereof to the dealer from whom he purchases raw materials, component parts, sub-assembly parts, intermediate parts, consumables and packing materials at the concessional rate of tax :
Provided that the manufacturer may issue declarations in form G (revised) to the selling dealers for all the purchases of goods mentioned in the certificate of registration on and from January 21, 1989 and used in the manufacture of goods mentioned in the certificate of registration on and from January 21, 1989 :
Provided further that no single declaration shall cover more than one transaction of sale except in cases where the total amount of sales made in a financial year covered by one 'G' form is equal to or less than Rs. 20,000 or such other amount as the State Government may, by a general order notify in the Gazette :
Provided also that where in the case of any transaction of sale, the delivery of goods is spread over to different financial years, it shall be necessary to furnish a separate declaration in respect of goods so delivered in such financial year.
(b) ...............................
(2) .............................."
11. After these amendments the position that emerges is that a dealer who purchases raw materials and utilises the same for manufacture of finished products within the State, is required to make a declaration in form G and also submit an application in form GI to the assessing authority for registration as a "manufacturer". After verifying the particulars contained in forms G and G1, the assessing authority issues to the manufacturer a certificate in form G2, which enables him to pay the tax at the concessional rate in respect of the purchases of raw materials utilised by him in the manufacture of finished goods within the State.
12. The petitioner made an application to the assessing authority-Commercial Tax Officer, Company Circle, Abids Division, Hyderabad-respondent No. 1, on September 22, 1989, bringing to his notice that it purchases raw materials such as maida, sugar, fats, chemicals and packing materials, utilises the same for the manufacture of biscuits under the brand name "Ampro", it entered into an agreement with the 4th respondent for the manufacture of the biscuits, the latter was not availing of the concessional rate of tax under section 5-B of the Act, and requested for issue of the required registration certificate.
13. A show cause notice was issued by the 1st respondent on November 7, 1989, informing the petitioner that since it did not have its own manufacturing unit situate within the State of Andhra Pradesh as provided under sub-section (2) of section 5-B of the Act, it was not entitled to be registered as a "manufacturer" for getting the benefit of the concessional rate of tax. The petitioner was accordingly requested to show cause why its application in form GI should not be rejected. To this, a reply was sent by the petitioner on November 15, 1989, informing the 1st respondent that it was not necessary for registration as "manufacturer" to own a factory, but it was sufficient if such facility was availed of by taking a factory on lease or by paying the manufacturing charges, for the manufacture of the finished goods according to specifications. In support of the stand taken, the petitioner also relied upon a decision of the Allahabad High Court in Bulbu Prasad Amarnath v. Commissioner of Sales Tax [1964] 15 STC 46. Two more representations also were given by the petitioner to the sales tax authorities, but to no avail. The Commissioner of Commercial Taxes issued a circular dated July 18, 1990, containing certain guidelines for the benefit of the assessing authorities, inviting their attention to rule 30-A of the Rules and stating that in order to claim the benefit of section 5-B, "the dealer must himself be a manufacturer". He also, by that circular, drew the attention of the assessing authorities to a decision of the Supreme Court reported in Brick and Tile Manufacturers Association v. State of Tamil Nadu , and requested all the assessing authorities to follow the aforesaid case law and the provisions of the Act and issue G2 certificates to manufacturers accordingly. The 1st respondent thereafter on January 21, 1990, issued proceedings in NI. Section 5-B/89-90 rejecting the request of the petitioner for registration as a manufacturer, taking the view that if the dealer did not have its own manufacturing unit, it was not entitled to be registered as a manufacturer for claiming the benefit of section 5-B of the Act. Challenging the same, the petitioner filed W.P. No. 14105 of 1990.
14. The case of the petitioner in W.P. No. 17523 of 1990 is similar to that of the petitioner - M/s. Emjak Industries Limited in W.P. No. 14105 of 1990. Sri Manohar, learned Senior Counsel who advanced leading arguments, contends that the petitioner is undoubtedly a "manufacturer" since it has control over the raw materials made available to the 4th respondent for making the biscuits and the manufacture of biscuits by the 4th respondent is according to the specifications laid down by the petitioner. When the petitioner has full control over the product, it is unrealistic to say that it is not a "manufacturer". The requirement of the petitioner having its manufacturing unit under section 5-B(2)(i) of the Act should not be literally construed. It is enough if the petitioner happens to be a manufacturer; it is immaterial whether the finished product is manufactured in the unit belonging to the petitioner or got manufactured by it in some other unit.
15. Sri Ravi, learned counsel for the petitioner in W.P. No. 17523 of 1990, while supplementing the arguments of Sri Manohar, urges that the ostensible objectives for enacting section 5-B are for making the best use of the raw materials available in the State and for providing incentive for entrepreneurs to set up manufacturing units in the State which in turn would enhance the industrial wealth of the State and secure employment to the residents of the State. As these objectives have been admitted in the counter-affidavit filed by the respondents, the requirement that the petitioner should have its own manufacturing unit is clearly superfluous, not contemplated by section 5-B of the Act.
16. In opposition to these submissions, Sri Ramayya, learned Senior Government Pleader for Commercial Taxes, contends that the ownership of manufacturing unit is a basic requirement under section 5-B for a manufacturer to claim the benefit of concessional rate of tax. Every manufacturer is not entitled to take advantage of section 5-B; only those manufacturers owning manufacturing units within the State alone come within the purview of the section.
17. It is not in dispute that the petitioners do not have their own manufacturing units within the State. A perusal of the agreement between M/s. Emjak Industries Private Limited-petitioner in W.P. No. 14105 of 1990 and Ampro Food Products Private Limited-respondent No. 4 in W.P. No. 14105 of 1990, brings to light that the petitioner is not having exclusive control over the manufacturing unit belonging to the 4th respondent in which the Ampro biscuits are manufactured. The preamble part of the agreement says that the petitioner approached the 4th respondent with a request to manufacture biscuits for the petitioner at the factory in such quantities as may be required from time to time and that the 4th respondent agreed to do so. Clause (4) of the agreement says that the 4th respondent shall make biscuits in accordance with the specifications furnished by the petitioner. Under clause (6), the petitioner shall supply to the 4th respondent, described as "processor" in the agreement, all raw materials including maida, sugar, bakery straighteners, biscuit cutters, packing materials "required for the purpose of manufacturing and packing biscuits'. If the quality of the materials supplied by the petitioner to the 4th respondent is of any sub-standard materials, the latter is entitled to refuse to store the same and the 4th respondent shall be the final judge for determining the standard of the materials supplied by the petitioner. After the completion of manufacture of biscuits, clause (15) says, the processor (4th respondent) should inform the petitioner and thereafter the petitioner shall make arrangements for removal of the goods from the factory. The processor, by clause (23), has retained the right to manufacture biscuits not only for themselves but also for others. The said clause reads : "the processor shall at all times enjoy the rights of manufacturing biscuits for others, including themselves, subject always to the condition that Emjak's requirements shall be met first".
18. The agreement does not vest exclusive control in the petitioner in respect of the unit belonging to the 4th respondent in which the biscuits are manufactured. Same is the case with the petitioner in W.P. No. 17523 of 1990.
19. As already noticed, the statutory requirement under section 5-B is that, in order to claim the concessional rate of tax, the dealer must have his manufacturing unit within the State. If any dealer not having such manufacturing unit furnishes a declaration under the proviso to sub-section (1) of section 5-B of the Act,.he is liable to penalty under sub-section (2) which lays down that the assessing authority may impose upon the dealer by way of penalty, after affording him a reasonable opportunity of being beard, a sum which shall not be legs than three times but which may extend to five times the amount of tax leviable on the sale of such goods so purchased.
20. We shall now advert to the decisional law relied upon by the counsel for the petitioners.
21. In Bajrang Gopilat Gajabi v. M. N. Baikundri , a case arising under the Central Excises and Salt Act, 1944, the question that fell for consideration was, whether the appellant therein was the manufacturer of the cloth subjected to excise duty. The appellant was assessed to excise duty in respect of cloth manufactured in some powerlooms and purported to have purchased the same from the owners of those powerlooms. The authorities found that yarn had been supplied to the powerlooms by one Tejpal for and on behalf of the appellant, that the cloth in question was manufactured by the powerloom owners for and on behalf of the appellant and that the powerloom owners received only an amount equal to the labour charges. The Bombay High Court agreed with the findings of the authorities and the Supreme Court, while affirming the conclusions of fact reached by the High Court, held that the appellant himself was the manufacturer of the cloth in question and he must be held to have been rightly assessed to excise duty in respect of the cloth so got manufactured in the powerlooms.
22. In Srirangam Brothers v. Sales Tax Officer [1959] 10 STC 257, the question for decision before the Orissa High Court was, whether the petitioners therein were "manufacturers" falling within the purview of the Notification dated July 1, 1949, issued by the Government of Orissa, exempting certain classes of sales from payment of sales tax. The notification of the Government was exhaustive. It stated, inter alia, "gold ornaments will also be exempted from sales tax when the manufacturer charges them separately for the value of gold and the costs of manufacture ............. "Manufacturer" contemplated in the exemption was one who should charge the gold ornaments separately for the value of gold and the cost of manufacture. In the context in which the word "manufacturer" occurred in the exemption clause, the Orissa High Court held that "a manufacturer who is not the first owner of the goods or the first seller could not possibly have been thought of when the Government issued the exemption order". The petitioners before the Orissa High Court did not have a factory for the manufacture of ornaments; they used to supply gold to some independent artisans who made it into ornaments with the help of their own tools. The petitioners used to pay labour charges to such artisans for converting gold into ornaments, and then sell the ornaments to consumers showing, in their bills' the value of the gold and the cost of manufacture separately. Because of the nature of the business transacted by the petitioners therein and the context in which the expression "manufacturer" occurred in the notification issued by the Orissa Government the Orissa High Court held that the petitioners were entitled to the benefit on exemption. It was held that the expression "manufacturer" occurring in the exemption clause meant the first owner of the finished product for whom it is made, either by his paid employees or even by independent artisans on receipt of raw materials and labour charges from him.
23. The reasoning of the Orissa High Court was followed by the Allahabad High Court in Bulbu Prasad Amarnath v. Commissioner of Sales Tax [1964] 15 STC 46 in which one of the points considered was, whether the assessees therein were manufacturers of linseed oil and so were liable to tax as such on their sales of linseed oil. Admittedly, the assessees had no oil mill; but they used to pay the owner of the mill his charges for crushing the oil-seeds into oil, brought the same to their premises and sold at the premises. After referring to the definition of "manufacturer" in 55 Corpus Juris Secundum, which is to the effect-"everyone who manufactures is not embraced within the legal meaning of the term, but rather only those who manufacture articles of trade as the principal part of their business. A manufacturer makes to sell and depends for his profit on the labour which he bestows on the raw material", the Allahabad High Court referred to the decision of the Orissa High Court in Srirangam Brothers v. Sales Tax Officer [1959] 10 STC 257 and concluded that the assessees therein were manufacturers of linseed oil.
24. In Commissioner of Income-tax, Bombay City-11 v. Neo Pharma Private Ltd. , the question that arose for consideration was. Whether the assessee was a "manufacturing company". The assessee therein was engaged in the business of manufacturing and processing pharmaceuticals, and for that purpose it entered into an agreement with another company to make available to the assessee their premises, plant, machinery and the services of the staff such as chemists and labourers to carry on manufacturing activities for and on behalf of the assessee. In respect of these services, the assessee agreed to pay to the other company a charge at a fixed rate which was inclusive of share profits. The assessee claimed the benefit of concessional rate of tax on the footing that it was an "industrial company". The definition of "industrial company", as per the Finance Act, 1966, was that it is a company "which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining". The Income-tax Appellate Tribunal found that the business of the assessee consisted mainly in the manufacture or processing of goods and, therefore, it was entitled to the benefit of concessional rate of tax. That view was affirmed by the Bombay High Court on the reasoning :
"........... It was the assessee which paid the hire charges for the machinery and the plant. It was the assessee which purchased the raw materials and the packing materials. The employees of Pharmed carried out the manufacture of drugs and pharmaceuticals under the direct technical supervision of the expert staff employed by the assessee and the products manufactured were of the quality prescribed by the assessee. The risk for the entire operation was that of the assessee. In view of this, we fail to see how it can be said that it was not the assessee but Pharmed which manufactured the said drugs and pharmaceuticals, the goods in question ............"
25. In Palghat Oil Mills v. State of Kerala [1987] 65 STC 169 (Ker), a notification issued by the Government of Kerala, by which the rate of tax payable by an oil miller under the Kerala General Sales Tax Act, in respect of purchases of coconut oil and coconut oil cake "in his mill" for sale, is reduced from 3 per cent to 2 per cent, fell for consideration.
26. Construing the words "his mill" in the context of the notification issued on April 1, 1969 and laying emphasis on the exclusive control aspect rather than the aspect of title to the mill, the Kerala High Court held that :
"2. The words 'his mill' in the context of the two notifications, in our view, refer to a mill solely operated by the assessee. The assessee must he in such control of the mill as to be its sole operator. His control may be by virtue of his full or limited ownership or other rights in the mill. What is important is not his title, but his exclusive control. He must be in exclusive control of the mill either as an individual or as a corporation. The question therefore is, is he the sole operator of the sole mill ? In O.P. No. 404 of 1968, Govindan Nair, J., as he then was held :
"..... The ordinary meaning of the word "miller" will take in not only a person who owns a mill but also a person who works a mill. There is no reason why this ordinary meaning should not be applied to the case of the petitioner .........."
With respect, we adopt this definition, subject to the miller, whether as an individual or a partnership or a company, being in exclusive control of the mill, whatever be the title or other rights."
27. The expression "manufacturer" was construed in different fact situations in the aforesaid cases. The question in this case is not whether the petitioners are manufacturers of biscuits but the question is whether each of them has "his manufacturing unit" as required by section 5-B. In the context of the statutory prohibition that a dealer "not having his manufacturing unit" is not entitled to he registered as a "manufacturer" under section 5-B, the dicta laid down in the case law cited for the petitioners is of no assistance.
28. In Additional Commissioner of Income-tax, Madras-1 v. Chillies Export House Ltd. [1978] 115 ITR 73 (Mad.), the question for consideration was whether the assessee therein was an "industrial company" within the meaning of section 2(6)(c) of the Finance Act, 1971. The assessee, an exporter of chillies, purchased chillies, sorted them, graded them, clipped and stemmed them and subjected them to fumigation under expert technical hands in order to prevent deterioration and with a view to give better polish and appearance and during that process the chillies were treated with methyl bromide. The fumigation was done by a third party. The question was whether the assessee was engaged in "processing" activity. The Madras High Court held that clipping, stemming and exporting did not constitute "processing" activity, but the activity relating to fumigation would amount to processing. As the assessee did not engage in the act of fumigation, it was done by some one else-the court held that the assessee was not entitled to the benefit of section 2(6)(c) of the Finance Act, 1971.
29. The Madras High Court had distinguished the decision of the Allahabad High Court in Bulbu Prasad Amarnath v. Commissioner of Sales Tax [1964] 15 STC 46 and the Bombay High Court in Commissioner of Income-tax v. Neo Pharma Private Ltd. had distinguished the decision of the Madras High Court.
30. In interpreting the specific language employed in section 5-B of the Act, which requires that in order to claim the benefit of concessional rate of tax the dealer should have his manufacturing unit within the State, the decisions of the Orissa, Bombay and Allahabad High Courts, relied upon by the petitioners, are of no relevance after the deletion with effect from January 21, 1989, of rule 3(gg) of the A.P. General Sales Tax Rules which defined the expression "manufacturer". None of these decisions deal with the question as to what is meant by the words "having his manufacturing unit'. A plain meaning of these words, in the context in which they occur, is that a person in order to claim the benefit of section 5-B, must have a manufacturing unit either of his own or over which he has exclusive control. With respect, we agree with the view of the Kerala High Court in Palghat Oil Mills v. State of Kerala [1987] 65 STC 169. If in the unit, where the finished goods are manufactured, some others also have control, it cannot be said to be "his manufacturing unit". Obviously the objective behind incorporating this condition in section 5-B is to insist upon the person seeking the benefit of reduced rate of tax under section 5-B of the Act, to start his own manufacturing unit or to take on lease with exclusive control a manufacturing unit. This would facilitate employment opportunities, generate wealth and also augment the revenues of the State, since any unit that comes into being has to pay taxes under various enactments. The petitioners in both the writ petitions do not have exclusive control over the manufacturing unit in which the biscuits are manufactured and so we hold that as each of them does not have "his manufacturing unit", within the meaning of sub-section (2) of section 5-B of the Act, and they are not entitled to be registered as manufacturers under section 5-B. It is relevant to notice that form G1 which is required to be filed by the dealer under section 5-B contains column (2), under which it is obligatory on the part of the dealer to disclose the name and full postal address of the factory and the place of manufacturing concern.
31. A provision like section 5-B which confers the benefit of lower rate of tax, must be interpreted strictly. He who claims the exemption must establish it. We cannot read into the provision any intention of the Legislature not reflected in the language employed. "In a taxing statute", Rowlatt, J., said "one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look, fairly at the language used" (Cape Brandy Syndicate v. Inland Revenue Commissioner [1921] 1 KB 64). The explicit language of section 5-B rules out the possibility of a dealer "not having his manufacturing unit" seeking the benefit of lower rate of tax : it is not a provision conferring benefit on manufacturers in general who engage in the activity of production of finished goods in the State with raw materials, component units and intermediate parts purchased from dealers in the State. We cannot narrow down the definite language against the State and stretch it in favour of the petitioners. The benefit covers only one class of dealers-those having their manufacturing units within the State, but, not others. We are, therefore, of the view that the rejection of the request of the petitioners by the authorities for issue of form G for the purpose of registration as manufacturers cannot be faulted.
32. For these reasons, both the writ petitions fail and accordingly they are dismissed, but in the circumstances, without cost.
33. Writ petitions dismissed.