TMI Blog2014 (3) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... tion should only explain or clarify - If it excepts, excludes or restricts, it is not an explanation, but a proviso, and should be considered as operative only from the date of its coming into effect - Therefore, had the notification issued by the Government, instead of removing the ambiguity in the earlier notification, introduced fresh conditions bringing substantial changes in the Notification then the notification would not have been explanatory or clarificatory. It is manifest that the intention of the Government was not only to extend the benefit of exemption under Entry 68, Clause XI of the second notification to those dealers who had obtained the certificate of registration and had been enoying exemption on a class of goods prior to 31.12.1999 but also those who have not effected any change in the product manufactured by them after 30.04.2000 - The appellant(s) did not manufacture prior to the issuance of the first notification and further obtained the registration for a different class of goods which included computer stationeries and other related products after 30.04.2000 and therefore such industry would not be entitled to claim the benefit under the Entry 68 by tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. The registration certificate was amended with effect from 20.02.2001. Consequent to amendment of the registration certificate regarding the product to be manufactured, M/s.Sharda industries by their letter dated 24.02.2001, informed the respondents about commencement of manufacture of the products as per the amended registration. 4. The goods manufactured and sold by M/s.Sharda Industries were exempted from payment of sales tax, since the said goods would fall under entry 68 of Second Schedule to the Local Act. 5. On 08.03.2001, a sale deed was executed in favour of M/s. Shiv Ganga Paper Convertors Pvt. Ltd. - appellant No. 1, wherein, the Sharda Industries conveyed and transferred their entire running business along with their immovable properties in favour of appellant No.1. Consequently, the appellant(s) requested for registration and made an application for registration as dealer under Section 11 of the Local Act, which was granted to them under the Local Act as well as the Central Act bearing No.DA/6497 and DA(CST)/5950 respectively with effect from 08.03.2001. 6. The Administration of the Union Territory of Daman and Diu in exercise of the powers conferred under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by such Small Scale Industry or Medium Scale Industry or Large Scale Industry on or after its date of registration under the Goa, Daman and Diu Sales Tax Act, 1964. Provided that - i. such Small scale Industry shall also obtain provisional registration from the district Industries Centre, Directorate of Industries, UT Administration of Daman and Diu on or before 31st December, 1999. ii. ...... iii. Such Small Scale or Medium Scale or Large Scale Industry shall possess the required land or constructed premises for the industrial Unit either on leasehold basis or on Freehold basis on or before 31st December, 1999. iv. Such Small Scale or Medium Scale or Large Scale Industry shall obtain provisional registration under Section 13 of the Goa, Daman and Diu Sales Tax Act, 1964 on or before 29th February, 2000. v. Such Small Scale or Medium Scale or Large Scale Industry shall apply to Financial institutions or Banks for Loan for setting up of such Industrial Unit if such industrial unit is funded by or to be funded by loans on or before 29th February 2000. vi. Such Small scale or Medium Scale or Large Scale Industry shall either purchase Plant and machinery or place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification also says that the exemption is of the goods manufactured, processed or assembled by a small scale industry or a medium scale industry or a large scale industry on or after its registration under the Local Act. Proviso appended to the Notification talks of the procedure that requires to be followed by a small scale industry to fall within the parameters of the Notification. It says that the small scale industry shall obtain a provisional registration from the District Industries Centre, Director of Industries, Union Territory, Administration of Daman and Diu on or before 31.12.1999. Since we are concerned with the small scale industry, we are not referring to the other conditions which are prescribed for medium scale or large scale industries. 7. The Notification further prescribes that the small scale industry shall obtain a provisional registration as prescribed under Section 13 of the Local Act on or before 29.02.2000. 8. Condition No. (vii) of the Notification provides that the small scale industry shall commence its production or before 31.12.2002. Clause (viii) of the Notification speaks of a small scale or a large scale industry, which has been established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iu on or before 31.12.1999 but did not obtain permanent registration on or before 31.12.1999 shall not effect change in constitution, ownership and share holding pattern upto 31.12.2002 or till the industry obtains registration under Section 11 of the act, failing which the industry shall not be eligible for exemption under Section 10A of the act. xx xx xx xx xx xx xx xx xx xx xx xx 2. Change in classes of Goods or product line: Any industry registered under the Act availing sales Tax exemption shall not effect changes in class of goods being manufactured as stated in Certificate of Registration (Form No. S.T. IV or S.T. V issued under Rule 5 of the Daman Diu Sales Tax Rules, 1964) after April 30, 2000. In case an industry effects any changes in classes of goods being manufactured for sale, then sale of such additional goods or classes of goods shall not be eligible for exemption and shall be taxed at applicable rates under the Act. By order and in the name of the Administrator of Daman Diu. Sd/- Deputy Secretary (Finance) 12. It is pertinent to mention here that the said Sharda Industries was set up prior to 31.12.1999 and was availing tax b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice issued by the Sales Tax Officer. That is how the assessee is before us in this appeal. 17. Shri Ritesh Aggarwal, learned counsel for the appellant(s) would submit that Notification dated 17.10.2001 takes away certain vested rights of the appellant(s) and also certain promises made by the State Government on which the appellant(s) had acted upon. The Second issue that is canvassed before us is that the Notification dated 17.10.2001 cannot impose fresh conditions with retrospective effect. 18. Per contra, Shri P.P. Malhotra, learned Additional Solicitor General appearing for the respondents ably justified the impugned judgment passed by the High Court, explaining the Scheme of the Local Act and also the purport of the Notification issued by the State Government dated 31.12.1999 and 17.10.2001. He would submit that the notification dated 17th October, 2001 clarifying the earlier notification had further clarified on two heads. Firstly, there will not be any change in the constitution, ownership and the shareholding pattern upto 31.12.2002 and secondly, there will not be any change in the class of goods manufactured by the small scale industry after 30.04.2000. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Proviso appended to the said Section is in the nature of the exemption provided in sub-Section (1) of Section 4 of the Local Act. It says that a dealer dealing exclusively in one or more classes of goods specified in the Second Schedule shall not be liable to pay any tax under the Local Act. 21. Section 10 speaks of tax free goods, Section 10A of the Act authorizes the State Government to grant exemption under certain circumstances to a class of dealers or any specified class of sale is exempt from payment of the whole or part of any tax payable under the Act. Section 11 of the Local Act speaks of the registration of the dealers which are liable to pay tax under Section 4 or Section 6 or sub-Section (6) of Section 24 of the Local Act. Section 12 speaks of voluntary registration; Section 13 of the Act speaks of provisional registration. 22. Any person who is desirous of establishing an industry, a business in Goa for the purpose of manufacturing or producing of goods of value exceeding Rs.30,000/- per year may, notwithstanding that he may not be required to register himself under Section 11 of the Local Act apply to the prescribed authority in a prescribed manner for grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions contained in a statutory provision. Depending on its language, an explanation might supply or take away something from the contents of a provision. The express prospective operation and effectuation of an explanation might, perhaps, be factor necessarily detracting from any evincement of the intent on the part of the Legislature that the explanation was intended more as a legislative- exposition or clarification of the existing law than as a change in the law as it then obtained. An explanation should only explain or clarify. If it excepts, excludes or restricts, it is not an explanation, but a proviso, and should be considered as operative only from the date of its coming into effect. Therefore, had the notification issued by the Government, instead of removing the ambiguity in the earlier notification, introduced fresh conditions bringing substantial changes in the Notification then the notification would not have been explanatory or clarificatory. 25. The next question to be considered is then whether the notification is to be given retrospective effect or prospective. The above proposition of law can be addressed by referring to the decision of this court in W.P.I.L. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the latter notification is only clarificatory, to clear the meaning of an earlier notification which are already implicit. A clarificatory amendment of this nature will have retrospective operation, and, therefore, if the principle notification was existing the amending notification also will be a part of the existing notification. 28. The meaning to be given to an 'explanation' must depend upon its terms, and no theory of its purpose can be entertained unless it is to be inferred from the language used. An explanation may be added to include something within or to exclude something from the ambit of the main notification or the connotation of some word occurring in it. An explanation, normally, should be so read as to harmonize with and clear up any ambuiguity in the main notification and should not be so construed as to widen the ambit of the notification. The explanation is therefore added to retrospectively clarify a doubtful point in law and to serve as a proviso to the main section or ex-abundant cautela to allay groundless apprehensions. 29. Therefore, after observing the original notification and the clarificatory notification, dated 17th October, 2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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