TMI Blog1992 (4) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... e Industries for manufacturing "printed aluminium foils and other types of foils and different types of flexible materials", including empty pouches and bags required for the use of packing medicines, food, cosmetics and confectionery. The said scheme was approved by the Directorate on March 20, 1982, and on an application made by the company a provisional registration certificate bearing No. 21/15/05424/ Prov/SSI as a small-scale unit was granted by the said Directorate on April 25, 1983. Initially, the company obtained orders from Brooke Bond (India) Ltd., and Lipton (India) Ltd., and other organisations for processing and fabricating different types of packing goods. The required materials were supplied by the said companies in terms of the orders placed with the applicant and the said orders were executed entirely by getting the job done from outside by labour contractors. After the State Bank of India sanctioned loans on December 27, 1983 for setting up the unit, steps to purchase plant and machinery were taken so that the work of manufacturing could be done in the unit itself, instead of execution elsewhere through labour contractors. The company thereafter on December 30, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent organisations and supplied the said goods as per their respective orders and specifications after processing in outside factories through labour contractors. From January 1, 1985 the company sold goods manufactured in its own small-scale unit. The earlier activity of execution of orders through labour contractors was discontinued and manufacture in the newly set up unit started after the 3rd week of December, 1984. The company thereafter made an application dated January 10, 1985 for issuance of eligibility certificate under rule 3(66a) to be valid for a period of three years from the date of the first sale of the goods manufactured in its newly set up small-scale industrial unit. As the grant of eligibility certificate is considered year-wise the Assistant Commissioner of Commercial Taxes took up the issue of eligibility certificate for the period from January 28, 1985 to December 31, 1985 and by his order dated November 28, 1986 rejected the application on certain grounds. It is this order which is under challenge in the present writ application. 5.. The application for eligibility certificate was rejected by the Assistant Commissioner mainly on three grounds. Firstly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (ii) appended to rule 3(66a) the new industrial unit is required to be registered with the Cottage and Small Scale Industries Department of the Government of West Bengal, but in this case the unit was not registered during the period from October 25, 1984 to June 2, 1986. According to him, therefore, the unit did not fulfil this specific requirement during the period January 28, 1985 to December 31, 1985 for which the issuance of eligibility certificate is being presently considered. It is also contended that the coverage of items as well as location of the factory are also different in the permanent certificate from that in the provisional certificate and the items sold during the relevant period are also different from the items endorsed in the provisional certificate. 8.. Mr. A.K. Roy Chowdhury, learned advocate for the applicant, contended that the permanent certificate was issued in continuation of the provisional certificate. He referred in this connection to a letter dated April 29, 1987, from the General Manager, District Industries Centre, South 24-Parganas (annexed to the supplementary affidavit) which states that the provisional certificate was renewed up to April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Tribunal. 11.. Mr. Majumdar, however, contended that it was not possible to take a liberal view with regard to compliance with the provisions of the rules for exemption, as the guiding principle laid down by the Supreme Court is to ensure strict compliance with such exemption provisions. He drew support in this connection from the decisions of the Supreme Court in Mangalore Chemicals Fertilizers Limited v. Deputy Commissioner of Commercial Taxes [1991] 83 STC 234 and Union of India v. Wood Papers Ltd. [1991] 83 STC 251. Strict compliance is insisted on to avoid a burden on the other sections of the people. It was only while interpreting an exemption clause that a liberal construction can be imparted to the language thereof. It is an accepted principle that a machinery provision, which enables the assessee to avail himself of a concession or benefit conferred by a substantive provision in the statute, should be liberally construed. The object is to effectuate the scheme of exemption, as a machinery provision in a taxing statute has the object of effectuating liability or implementing the charging provision. A wide and liberal interpretation will necessarily imply looking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration as an S.S.I. unit is issued, clearly shows that registration pre-supposes existence of a factory in a particular location for specific item or items of manufacture. There can be no registration without these essential elements. In other words, the location of the factory and the item of manufacture are an integral part of such registration, which gives, as it were, a "local habitation and a name" to the newly set up unit. The unit cannot have an identity without these material particulars. We are, therefore, unable to accept the contention of Mr. Roy Chowdhury that there will be sufficient compliance with the rules, if there is registration and the item or items of manufacture are not at all relevant or necessary. 16.. In the circumstances, the first ground for rejection of eligibility certificate is considered to be valid. 17.. We shall now consider the second ground, viz., non-maintenance of separate accounts and relevant records to prove that sales claimed exempt were of goods manufactured in the unit. The applicant claims that manufacturing in the factory started at the end of the month of December, 1984 and up to the third week of December, 1984 work was being execu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be given an unduly wide meaning; it is relatable to goods manufactured for sale, for which exemption is claimed. If an industry is doing job work, there is no question of any production and sale of goods. Here we are concerned with manufacture or production of goods for sale, for which separate accounts have not been kept inasmuch as the earlier activity and the later activity of manufacture have got mixed up and have not been separated with effect from a cut-off date. 20.. Another case referred to by Mr. Roy Chowdhury is an unreported decision of the Calcutta High Court in Asphalt (India) Pvt. Ltd. in Civil Order No. 18810(W) of 1984. This does not appear to be relevant. There the question was whether certain goods were manufactured or resold and on this issue depended whether there was mixing up of two activities, viz., manufacture and resale. The court observed that this was a question of fact to be decided by the sales tax authorities on the basis of proof and remanded the matter. Here the dispute is of a different nature. 21.. For reasons already discussed, we are unable to accept the contentions of the applicant and hold that this ground of rejection of the eligibilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of the period of tax holiday should start from January 1, 1985, which the applicant claims as the date of first sale of manufactured goods. While disposing of the grant of eligibility certificate for the subsequent period the Assistant Commissioner shall also consider the question whether the disputed machines mentioned in paragraph 22 are component parts of the parent machines, vouchers for which had already been produced before him. An opportunity for hearing the applicant in this regard may also be given. 26.. As the period of tax holiday, for which the applicant may be eligible, elapsed long time back, it is necessary that the matter be disposed of within a reasonable time frame. The Assistant Commissioner is, therefore, directed to dispose of the question of issue of eligibility certificate for the period from June 3, 1986 to December 31, 1986, within a period of three months after an application is made in this regard. The renewal for the period January 1, 1987 to December 31, 1987, if it arises, may be disposed of within a period of two months after an application is made therefor in proper time. 27.. Interim orders with regard to assessments for the four ..... X X X X Extracts X X X X X X X X Extracts X X X X
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