TMI Blog2000 (8) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... ax exemption to the tune of Rs. 855.77 lakhs for the period from May 30, 1992 to May 29, 2001. Thereafter, the petitioner applied for annual renewal as required by rule 28A(7)(a). Respondent No. 2 declined to accept the bank guarantee furnished by the petitioner on the premise that it was not in conformity with rule 28A(6)(a)(ii) of the Rules and vide notice, annexure P7, dated June 14, 1996, he called upon the petitioner to furnish bank guarantee valid for the period extending to five years after the expiry of total period of tax exemption. After about 6 months, respondent No. 2 issued notice dated December 18, 1996 informing the petitioner that application for renewal for the period from July 1, 1994 to June 30, 1995 has not been received in his office. In reply to the said notice, the petitioner sent letter, annexure P9, mentioning therein that the application for renewal of exemption certificate for the disputed period had been sent by registered AD post on May 31, 1994 along with necessary documents, such as form S.T. 71, certificate from CA regarding notional sales tax liability and fixed assets, memorandum and articles of association and balance sheet and, therefore, it cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elief to the industries and to create ground for accelerated development of the State, the Act was amended and section 13-B was inserted for conferring power upon the State Government to grant exemption to the specified class of industries from payment of tax subject to the fulfilment of the prescribed conditions. For giving effect to the object sought to be achieved by the enactment of section 13-B, the State Government, in exercise of its rulemaking power under section 64 of the Act, inserted Chapter IV-A (rule 28A) in the Rules. Extracts of sub-rules (6) and (7)(a) of rule 28A of the Rules, which have bearing on the decision of this case read as under: "Sub-rule (6) of rule 28A of the Rules: (6)(a) An eligible industrial unit which has been issued with an eligibility certificate (hereinafter referred to as the applicant unit), shall, within sixty days of its receipt make an application for the grant of exemption or entitlement certificate, as the case may be, in form S.T. 71 to the Deputy Excise and Taxation Commissioner of the District in which his unit is located. The application shall be accompanied with an attested copy of the eligibility certificate and other document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion certificate or the entitlement certificate, as the case may be, shall be renewed from year to year for which the industrial unit shall make an application to the Deputy Excise and Taxation Commissioner in-charge of the district by the 31st May in form S.T. 71. The application shall be accompanied with exemption/entitlement certificate, additional security as specified in sub-clauses (i) and (ii) of clause (a) of sub-rule (6) equal to fifteen per cent of the declared notional sales tax liability of the current year and the difference between the actual and the declared notional sales tax liability of the previous year in the case of sales tax exemption and equivalent, to the extent of estimated tax liability of the current year and difference between actual and estimated tax liability of previous year in case of tax deferment, as also other documents mentioned in the application. The Deputy Excise and Taxation Commissioner after making such enquiries as are necessary, and after satisfying himself that the applicant is a bona fide industrial unit and has not misused the exemption/entitlement certificate, shall renew the exemption/entitlement certificate within 30 days of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to protect the public revenue and if an appropriate surety bond is furnished in the prescribed form equivalent to 15 per cent of the notional sales tax liability, the respondents cannot refuse to entertain the same. He also assailed the order dated July 26, 1999 passed by respondent No. 6 by arguing that it had taken an extremely technical view of the petitioner's request to be allowed to furnish surety bond. 9.. The learned Deputy Advocate-General argued that the option given to the applicant to furnish surety bond or bank guarantee cannot be changed during the currency of the exemption period and, therefore, the cancellation of the exemption certificate by respondent No. 2 on the ground of nonfurnishing of bank guarantee in terms of rule 28A(6)(a)(ii) of the Rules was legally correct and justified and the appellate authorities have rightly declined to interfere with the order dated April 24, 1998. 10.. We have thoughtfully considered the respective submissions. In our opinion, the plain language of rule 28A(6)(a)(ii) does not admit of the interpretation placed by respondents Nos. 2, 5 and 6. A conjoint reading of rule 28A(3) and 28A(6)(a)(ii) shows that while under sub-rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng growth and development should be construed liberally. Since a provision intended for promoting economic growth has to be interpreted liberally, the restriction on it, too, has to be construed so as to advance the objective of the section and not to frustrate it. It is necessary to resort to a construction which is reasonable and purposive to make the provision meaningful." 13.. In the case of Belapur Sugar and Allied Industries Ltd. (1999) 4 SCC 103, the Supreme Court interpreted the provisions contained in the circular issued by the Government for grant of concession/exemption/rebate to the sugar industries and upheld the claim of the appellant for refund of the amount and duty which it was not bound to pay. While doing so, their Lordships held as under: "Unless there is anything to the contrary in the Act, Rules or notification, if there be two possible interpretations, it is that interpretation which subserve the object and purpose should be accepted. The objective of the notification in question is that by conferring rebate in excise duty, an incentive is given to a factory for increasing the sugar production during the lean period. One has to scrutinise the two notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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