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TMI Blog2009 (7) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh in order to encourage industrialization in the entire State had been evolving various schemes in terms whereof incentives were to be provided to the entrepreneurs not only for the establishment of new units but also expansion thereof. Such incentives were being granted in various forms such as subsidy, deferment/tax holiday, rebate in electricity charges, interest subsidy, etc. For the aforementioned purpose, Government orders were being issued from time to time since 1989. By reason of G.O. Ms. No. 498 dated October 16, 1989, the Government provided investment subsidy at various rates depending upon the backwardness of different districts of the State apart from granting deferment/tax holiday on sales tax. The said G.O. Ms. No. 498 dated October 16, 1989 was followed by the G.O. Ms. No. 117 dated March 17, 1993 which was operative from October 3, 1992 to March 31, 1997. Another G.O. Ms. No. 386 dated September 26, 1994 was issued by way of amendment to G.O. Ms. No. 117 dated March 17, 1993 on representations made by various entrepreneurs in terms whereof benefits were sought to be conferred on expansion/modernization. In the said G.O. Ms. various terms were defined incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of additional fixed capital investment made, from the date of commencement of commercial production by the expansion project. Base turnover for this purpose shall be the best production achieved during three years preceding the year of expansion or the maximum capacity expected to be achieved by the industry as per the appraisal made by the financial institution before funding the project, whichever is higher. The same limits and conditions as specified in para 6.03 and 6.05 above will apply. ... 16.00 The decisions of the State Level Committee shall be final in scrutinizing and deciding the eligible investment and sanctioning the incentives for eligible industries. ... 18.00 These orders shall take effect from November 15, 1995 and will be in force up to March 31, 2000." Indisputably, in terms of the said G.O. Ms. No. 108 dated May 20, 1996, the respondents herein applied for and were granted eligibility certificate on their project for expansion of their factory as a result whereof the benefit of deferment on sales tax to the extent of 135 per cent of the capital investment made by them was conferred. It is also not in dispute that the respondents thereafter claimed the bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel appearing on behalf of the State, would urge: (i) The High Court committed a serious error insofar as it failed to take into consideration that G.O. Ms. No. 108 was to be read with other G.Os. preceding thereto. (ii) The High Court should not have entertained petitions directly against the orders of assessment as the question as to whether the entrepreneurs had fulfilled the conditions laid down in the said G.O.s or not were required to be considered by the respective assessing authorities. Mr. T.L.V. Iyer, Mr. S. Ganesh, learned Senior Counsel, Mr. K.V. Vishwanathan and Mrs. Shally Bhasin Maheshwari, learned counsel appearing on behalf of the respondents, on the other hand, urged: (i) The exemption notification having been valid for a period of five years, the conditions laid down therefor must be read literally keeping in view the terminologies used in paragraph 7 only. The principle of interpretation adopted by the High Court should be accepted as the G.O.s refer to the quantity and/or capacity and not the turnover. (ii) G.O. Ms. No. 108 should be read literally and not along with other G.Os. as the former was issued in modification of the earlier ones as even in some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. They have been referred to only for the purpose of tracing the history and to lay emphasis on the fact that the Government of Andhra Pradesh had from time to time issued appropriate notifications with a view to implement its liberalized State Incentive Schemes as also the industrial policy statement issued in the year 1992. Each of the Schemes, as noticed hereinbefore, operated in different fields. Had the intention of the Government of Andhra Pradesh been to continue with the old schemes, only the period therefor could have been extended from time to time. It was not necessary for it to issue notification introducing the new scheme. The said notification indisputably was issued in modification of all the earlier orders. What is meant by modification has been noticed by the High Court in its judgment in the following terms: "... The word 'modification' means-'a change made' (as per the Concise Oxford Dictionary, X Edition); 'an alteration that does not change the general purpose and effect of that which is modified', (as per West's Legal Thesaurus/Dictionary); and, 'a change and alteration or amendment, which introduces new element into the details or cancel some of them but l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event the same gives rise to anomaly or absurdity. The exemption notification must be construed having regard to the purpose and object it seeks to achieve. The Government sought for increase in industrial development in the State. Such a benevolent act on the part of the State, unless there exists any statutory interdict, should be given full effect. (See Vadilal Chemicals Ltd. v. State of Andhra Pradesh [2005] 6 SCC 292 See [2005] 142 STC 76 (SC); [2005] 5 RC 295.) We may notice that this court in Innamuri Gopalam and Maddala Nagendrudu v. State of Andhra Pradesh [1964] 2 SCR 888 See [1963] 14 STC 742 (SC). held See at page 748 of [1963] 14 STC.: "... We do not feel persuaded to accept this argument. No doubt, statutes have to be construed as a whole so as to avoid any inconsistency or repugnancy among its several provisions, but if there is nothing to modify, nothing to alter, or nothing to qualify the language of a statute, the words and sentences have to be construed in their ordinary and natural meaning (vide 36 Hals (3rd Edn.) s. 585) ..." The said dicta was followed by this court in Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise and Customs, Surat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2005] 139 STC 269 (SC)., this court opined that when an application for exemption is filed for an expansion or diversification, Explanation 5 appended to section 4A(6) specifying the word "unit" must receive a liberal construction to include not only a new unit but also a unit which is sought to be expanded, modernized or diversified, stating See para 26 at page 291 of [2005] 139 STC.: "25... As seen above, the term 'unit' has the meaning as defined in section 4A. As we have already seen, section 4A defines the term 'unit' to mean an industrial undertaking, which has undertaken expansion, modernisation and diversification. Even under the General Clauses Act, where the context so requires the singular can include the plural. A plain reading of the notification shows that for 'expansion, modernisation and diversification' it is the industrial undertaking which is considered to be the 'unit'. This is also clear from the fact that in the notification wherever the words 'expansion, modernisation or diversification' are used, there are no qualifying words to the effect 'in any one unit'. In none of the clauses is there any requirement of the investment being in one unit of the industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-clause (a) of clause (6). A conjoint reading of clause (1-B)(a), clauses (6)(a) and (b) makes it clear that the dealer is entitled to claim exemption in respect of the turnover of sale of goods of an assessment year in excess of the base production. 'Assessment year' has been defined in section 3(j) to mean the twelve months ending on March 31. If that be the case then the extent of entitlement to exemption will depend on the sale of goods in the assessment year minus the base production determined under the Act. Simply because the dealer has to file returns from month to month and deposit the admitted tax at the time of filing of the return does not mean that the question of exemption on the turnover of the production in excess of the base production can be considered only after the base production is achieved. Returns filed every month and the tax paid would be subject to adjustment at the time of the finalisation of the assessment. Intention of the Legislature is clear and unambiguous. Exemption is to be given on the turnover of sale of goods in an assessment year in excess of the base production. We do not find any substance in the submission advanced on behalf of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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