TMI Blog2006 (11) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... sly heard and stand disposed by this judgment and order. We have heard Mr. OP Bhatti, Advocate, assisted by Mr. A. Biswas, Advocate, for the appellants and Mr. R. Dubey, learned Standing Counsel, Finance Department, Government of Assam, for the respondents. The appeals, with a view to identify the grounds of the impugned challenge, have been categorised into three groups. The pleaded facts in bare essentials have to be set out to better appreciate the rival assertions. In the first group of appeals, nomenclatured as Group I, the petitioner/appellants have impeached the various assessment orders for the aforementioned periods on the ground that as eligibility certificates in terms of the aforementioned policy had been issued envisaging sales tax exemption for sale of goods involved from April 14, 1988 to April 13, 1993 and the same having been sold without charging such tax from the consumers, the denial of the benefit of such exemption and the assessment of the levy is ex facie in contravention of the policy and the Assam Industries (Sales Tax Concessions) Act, 1986 (hereinafter referred to as, the Act ). In the corresponding writ petitions, the petitioners are the holders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffidavit in the above writ petitions as well. In the last category of appeals (Group III), the common case of the petitioner-appellant M/s. Dugar Tea Industries Private Limited, is that pursuant to the policy, it had set up an industrial unit for blending and packaging tea, the initial steps for starting whereof were taken in the year 1986 and the buildings and plants were made ready for production by incurring huge expenditure whereafter the production started with effect from April 14, 1986. The respondent No. 6, Udyog Sahayak, District Industries Centre, Kamrup, on the application of the petitioner granted the eligibility certificate on July 7, 1988 under the policy thus entitling it to claim subsidies on working capital for a period of three years, exemption of sales tax and subsidies on consumption of power for a period of five years with effect from April 14, 1988 to March 13, 1993. The General Manager of District Industries Centre, Government of Assam, also issued a permanent certificate of registration to it as a small-scale industrial unit on August 23, 1988. It maintained that the Government by the policy promised to extend interest subsidy on working capital above eig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tea and the sale thereof under different brand names after packing the same in packages of different sizes and shapes. It denied that under the policy, any exemption of tax was granted to the petitioner and that therefore it was liable to pay the levy on its turnover of taxable goods. It maintained that the assessment orders were valid and that the petitioner had been accorded enough time and opportunity to produce the books of account in the related proceedings. As the petitioner-company was not entitled to any benefit of exemption of sales tax under the Act, its assertion of not having collected the same on its sales was inconsequential. The answering respondents denied any promise to have been held out to the petitioner by the Government of Assam, to enforce the plea of promissory estoppel. Nothing in particular was averred controverting the facts relating to the constructions and installations of the appellant-petitioner's plants and machineries and claim of commencement of its production from April, 1988. Whereas by the judgment and order dated April 8, 1997 passed in CR No. 943 of 1992 (corresponding to Writ Appeal No. 283 of 1997), the petition was dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2(2) of the Act, having been issued the eligibility certificate it was entitled to the benefit of sales tax exemption extended by the policy and there being no inhibition in this regard in the provisions of the Act as well as section 3A of the 1947 Act vis-a-vis sale of finished products, the denial of such benefit was repugnant to the letter and spirit of the policy as well as the Act and, therefore, the impugned judgments and orders merit interference in these appeals. While reiterating that the assailment of the vires of rule 2(f) had been abandoned, the learned counsel urged that the promises made in the policy not being mutilative of the provisions of the Act, no notification denying the benefits assured thereunder (policy) could have been validly issued and, therefore, the impugned notification dated July 30, 1988 to the contrary is unsustainable in law. The learned counsel contended that even assuming that the appellantcompany was not entitled to the benefit of sales tax exemption on raw materials for section 2(f) of the Act, it was eligible thereto qua its finished products, there being no embargo either in the policy or in the Act with regard thereto. According to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for non-prosecution on January 4, 2004. An application for restoration of the appeal had been filed registered as M.C. No. 2640 of 2004. On a consideration of the grounds shown explaining the default, we condoned the same and recalled the order of dismissal. We have extended our anxious consideration to the rival submissions. Before dealing with the principal issue, we propose to refer to two peripheral aspects noticed in course of the arguments. In the writ appeals comprising category I, the corresponding writ petitions had been filed by the holder of the eligibility certificate and its agent selling its goods. M/s. Dugar India Tea Industries Private Limited to which the eligibility certificate had been issued is one of the writ petitioners. As a common issue of entitlement of sales tax exemption is also involved in the said batch of appeals, the Revenue's plea of non-maintainability thereof on the ground of challenge to the assessment orders passed in the proceedings pertaining to the agents of the certificate holder does not commend for acceptance. Even otherwise, no specific assertion had been made in the pleadings on behalf of the respondents in this regard. Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be exempted on purchase of raw materials and sales of finished products for a period of five years as may be decided by the Government from time to time. Admittedly, the eligibility certificate issued by the Udyog Sahayak in favour of Dugar Tea Industries Private Limited on July 7, 1988 was, amongst others, for claiming exemption of sales tax from April 14, 1988 to April 13, 1993. This private limited company is the centre figure in all the writ petitions as well as the appeals. The eligibility certificate was to remain valid up to April 13, 1993. The certificate of registration of the said company as a small-scale industrial unit was also issued by the Director of Industries, Assam, on August 23, 1988 indicating it to be involved in activities of tea blending and packaging. In the meantime, the State Legislature had enacted the Act, which received the assent of the Governor on January 5, 1987. The preamble thereof illustrated that its main objective was to consolidate and amend the provisions of law relating to sales tax in the matter of concessions to the industries. The Statement of Objects and Reasons of the statute disclose its objective to grant sales tax concession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame is in conformity with the provisions of the Act and the Rules would grant a certificate of authorisation in the prescribed form specifying the class or classes of goods for the purposes of section 3 and the period for which it would remain valid. Section 4(3) ordains that a certificate of authorisation granted would remain valid for five years from the date of completion of effective steps for setting up the industrial unit in respect of which the certificate is granted. The said provision reserves a power in the said authority to extend the validity of the certificate till the expiry of five years from the date of commencement of production by the industrial unit. Section 4(4), however, proclaims that no certificate of authorisation would be granted except in respect of such raw materials as might be prescribed. Section 10 confers power on the State Government to make Rules for carrying out the provisions of the Act. Chapter III of the statute is devoted to the amendment of existing sales tax laws for providing sales/purchase tax concessions to raw materials and finished products. Section 12 occasions an amendment to the 1947 Act by inserting section 3A, the relevant excerp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of the above definition is not construed to be a raw material for the purposes of the Act and the Rules. Rue 3 delineates the procedure for filing an application for an authorisation certificate envisaged in section 4(1) of the Act. The application required to be filed in form I provided by the Rules is to be accompanied by a certificate of eligibility as per Part II of the said form issued by the appropriate authority as referred to therein and a certificate obtained from the Director of Employment, Government of Assam to the effect that the number of local people on the date of the application in the industrial unit including those in the management cadre is not less than 80 per cent of the total number of persons employed in the unit. The application should, amongst others, specify the particulars of the class or classes of goods intended by the applicant for use as raw materials in the manufacture of goods in the unit. The Rules provide that the certificate of authorisation would be as in form II also prescribing its period of validity. Rule 15 is categorical in stipulating that the authorisation certificate could be issued only in respect of such raw materials as is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment was authorised to condition such exemption by detailing the same in the relevant notification to be published in the official gazette. By the impugned notification issued in exercise of the power under section 3A of the 1947 Act and published in the issue dated August 1, 1988 of the Assam Gazette (Extraordinary), the Government prescribed the conditions subject to which a dealer would be entitled to sales tax exemption in respect of sale of goods produced by him in his industrial unit in the State for a period of five years from the date of commencement of production therein. The notification, inter alia, provides that for such relief, the dealer must not collect any amount by way of sales tax in any form or manner. The application of the notification is excluded in respect of sales made from August 1, 1988, unless the dealer holds an authorisation certificate granted to him under section 4 of the Act and the validity whereof has not expired on the date of the relevant sale(s). M/s. Dugar Tea Industries Private Limited not having been issued the authorisation certificate, as the application therefor was not entertained in view of the exceptions of raw materials referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver had been made by the Government recognising an unfettered and unrestricted right of any dealer or an industrial unit to avail sales tax exemption. On the contrary, the relevant provisions of the policy, Act and the Rules accentuate a residuary power of the Government to codify the covenants to avail such exemption. Axiomatically the Act and the Rules are not repugnant to or irreconcilable with the policy. Section 3A of the 1947 Act is integral to the legislative scheme envisaged by the Act and, therefore, the impugned notification cannot be denounced and dubbed as lacking in competence. It is evidently in the exercise of power reserved to the Government to prescribe the conditions subject to which sales tax exemption is grantable. The validity or relevance of the pre-conditions for the applicability of the notification in respect of sales after August 1, 1988 has not been questioned. We see no good reason either to condemn the same. The impugned notification therefore does not merit interference. The decision in the corresponding writ petitions upholding the notification is, therefore, sustained. The policy obviously is not a statutory instrument and cannot be construed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the law as it stands, and to 'leave the remedy (if one be resolved upon) to others.' . . . A construction which would leave without effect any part of the language of a statute will normally be rejected. Thus, where an Act plainly gave an appeal from one quarter sessions to another, it was observed that such a provision, though extraordinary and perhaps an oversight, could not be eliminated. The golden rule of interpretation of a statute is that the words thereof must primarily be given their ordinary meaning and a departure is permissible if it can be shown that the legal context in which the words are used or the part of the statutes in which they occur requires a different meaning. This fundamental principle finds expression in the following extract from Cross in Statutory Interpretation (3rd Edition., 1995). The governing idea here is that if a statutory provision is intelligible in the context of ordinary language, it ought, without more, to be interpreted in accordance with the meaning an ordinary speaker of the language would ascribe to it as its obvious meaning, unless there is sufficient reason for a different interpretation . . . Thus, an 'ordinar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the notification issued by it on April 2, 1994 in exercise of power under section 7 of the Bihar Finance Act, 1981, limiting the facility to those industrial units which had not availed any such benefit on the earlier incentive policy is invalid being contrary to the policy. In the reported decision, the State of Bihar declared a policy in the year 1993 which, inter alia, granted sales tax exemption on the purchase of raw materials involved therein. The respondent units were old industrial units that had gone into production prior to April 1, 1993 and whose investment in their plant and machinery did not exceed Rs. 15 crores on that date. Subsequent thereto, the Government in exercise of its powers conferred by section 7(3)(b) of the Bihar Finance Act, 1981, limited the facility to those eligible units which had not availed any benefit under the earlier incentive policy. The respondents having successfully challenged the said notification, the State was in appeal before the apex court. It was contended on behalf of the State inter alia, that clause 10.4(i)(b) of the Policy was to be read subject to clause (i)(a) thereof declaring that the same would be applicable to those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered in Collector of Bombay v. Municipal Corporation of the City of Bombay AIR 1951 SC 469, Union of India v. Anglo Afghan Agencies AIR 1968 SC 718, Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 44 STC 42; [1979] 2 SCC 409 and henceforth recalled the well-known preconditions for the operation of the doctrine. (1) A clear and unequivocal promise knowing and intending that it would be acted upon by the promisee; (2) Such acting upon the promise by the promisee so that it would be inequitable to allow the promisor to go back on the promise. It noticed that being an equitable doctrine, it ought to yield when the equity so required and that it would be only when the court was satisfied on appropriate and adequate materials placed by the Government that any overriding public interest required that it should not be held bound by the promise that the court would refuse to enforce the same. It further elucidated that no representation prohibited by law could be enforced as the Government could not be compelled to act contrary to any statute. However, if the law conferred power on the Government to grant the exemption, it could be legitimately held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . State of Assam [2001] 124 STC 305; [2001] 2 GLT 481, rejected the assertion based on promissory estoppel holding that the same was not available against legitimate exercise of statutory powers or to enforce a promise or undertaking contrary thereto. The appellant industrial unit was operative from before October 1, 1962 and therefore its claim for sales tax exemption was rejected for not being a new industrial unit under the Act. This court declined to entertain the contention that the promise made by the Government that industrial units established under the previous policy of 1982 would be entitled to sales tax concession under the Act being in derogation of the statute. The plea of promissory estoppel therefore cannot be upheld. The apex court in State of Jharkhand v. Ambay Cements [2005] 139 STC 74; [2005] 1 SCC 368, has enjoined a circumspective approach for the High Court's in exercise of its writ jurisdiction in directing grant of exemption hedged otherwise by conditions stipulated by the authorities concerned. It has held that no such direction ought to be issued by overlooking the statutory conditions stipulated for such grants, more so in absence of any challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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