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2016 (2) TMI 436

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..... ons stipulated in the notification. The said authority cannot travel beyond the stipulations of the notification. The language employed in the notification conveys that the grant of certificate has to be such that after expiration of the eligibility period, the amount has to be paid back within a span of 5 years but the gap cannot exceed 13 years from the date of start of deferment. In the case at hand, the claim of the assessee that the repayment schedule has to continue for a period of 13 years from 2006, for the deferment commenced only in 2006. Such an interpretation not only causes serious violence to the language employed in the notification but if it is allowed to be understood in such a manner, it shall lead to an absurd situation. That apart, the intention can be gathered from the notification that it has to relate back to the date of eligibility with a maximum limit of 13 years. It cannot be construed to mean 13 years from the date of completion of the eligibility period. The repayment schedule is 5 years from the expiry of eligibility period of deferment. The period of 5 years has to be so arranged that it does not go beyond 13 years from the date of deferment. Thu .....

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..... rsuance of the discussion, certain amendments in the policy took place, as a consequence of which a communication was made to the 1st respondent for setting up a cold rolling mill with production capacity of 1.02 million tonnes requiring investment of ₹ 1874.04 crores on the project. Regard being had to the discussion and the communication, the 1st respondent invested nearly ₹ 2000 crores on its own and the commercial production commenced from 01.08.2000. 2. When the matter stood thus, the Bihar Reorganisation Act, 2000 came into existence on 15.11.2000 as a result of which Jamshedpur became part of a newly carved out State, namely, Jharkhand. After coming into force of the new State, on 15.12.2000, the Governor of Jharkhand by notification ordered that the 1981 Act, the Central Sales Tax (Bihar) Rules, 1956 and the notifications made thereunder, etc. amongst other Acts, Rules and Regulations, shall be deemed to be in force in the entire State of Jharkhand w.e.f. 15.11.2000. On 21.12.2000, the successor State issued an exemption certificate as contemplated in earlier notification issued by the Bihar State Finance and Commercial Taxes Department exempting the new unit .....

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..... intrinsic evidence. The material produced before the Joint Commissioner was in our opinion sufficient to decide whether the product manufactured by the appellant is CRM or not and the said Joint Commissioner having given a positive finding and that finding having not been interfered with by the Commissioner, we think the High Court erred in remanding the matter for fresh inquiry. 21. It is true that normally as against an order of remand this Court hesitates to interfere since there is always another opportunity for an aggrieved party to establish its case. But in this case we should notice that the decision to establish an industrial unit was initiated by the appellant as far back as in the year 1997. Based on a promise made in the industrial policy of the State of Bihar, at every stage the appellants tried to verify and confirm whether they are entitled to the benefit of exemption or not and they were assured of that exemption. It is based on these assurances that the appellant invested a huge sum of money which according to the appellant is to the tune of ₹ 2000 crores but the State says it may be to the tune of ₹ 1400 crores. Whatever may be the figure, the f .....

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..... xpansion, modernization or diversification in such industrial units immediately before the appointed day, may be allowed to convert the facility of exemption from payment of tax under the Act into getting the facility of deferment of payment of tax for the un-expired period or percentage of value of fixed asset as determined, as might have been allowed to such dealer under that Act, by a notification published in Official Gazette by the State Government. 8. Rule 64 of the Jharkhand Value Added Tax Rules, 2006 (for short the Rules ) deals with deferment. The said rule reads as under:- 64. Deferment.-(1) (a) All such Industrial units, which were availing the benefit of deferment of tax under the provisions of the Repealed Act and notifications issued there-under, immediately before the Appointed Day, and who are continued to be so eligible on such Appointed Day under the Act, may be allowed to continue the benefit of such deferment of payment of tax, for the balance un-expired period or un-availed percentage of gross value of fixed assets, provided such Industrial units file an application in Form JVAT 121 for grant of fresh eligibility Certificate, for the balance un-exp .....

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..... arge of the circle in which such unit is registered, and thereafter the In-charge of the Circle shall issue revised eligibility certificate for the balance unexpired period or unveiled percentage of value of fixed assets, after making such enquiry as he may deem fit proper. 9. In pursuance of the statutory provision and the rules framed thereunder, the 1st respondent on April 15, 2006 submitted an application for registration under deferment of payment of tax. In the said application it has been stated thus:- With the enactment of The Jharkhand Value Added Tax Act, 2005 , effective from 01.04.2006, exemptions have been converted to the deferment of payment of tax. We expressed our strong protest for withdrawing the said exemption of Tata Steel and replaced by deferment of payment of Tax provision. We also pray you to review the provision of the said deferment of payment of tax and allow us to continue availing the existing Sales Tax exemption on purchase of raw materials and other goods for production of CR products as well as on selling the CR Products as per the Bihar Industrial Policy, 1995 and the Notification made thereunder till 31st July, 2008. In pursuan .....

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..... S.Os. 57 and 58 both dated 2nd March, 2000, in accordance with the provisions of Section 95(3) of the VAT Act. The aforesaid order is the subject matter of assail in this civil appeal by special leave. 11. We have heard Mr. Ajit Kumar Sinha, learned senior counsel for the appellants and Mr. Dushyant A. Dave, learned senior counsel for the 1st respondent. 12. At the very outset, it is necessary to state that the 1st respondent had enjoyed the benefit of exemption from payment of sales tax on cold rolling mills products w.e.f. 01.08.2000 to 31.03.2006. Initially, the exemption was granted from 01.08.2000 to 31.07.2008. It is not in dispute that the 1st respondent had applied for conversion from exemption of tax to deferment of tax for the remaining period i.e. 01.04.2006 to 31.07.2008. The High Court, as is manifest, while quashing the notification nos. 201 and 202 had directed the State to grant deferment of tax to the 1st respondent under Section 95(3) (ii) of the JVAT Act. It is pertinent to mention here as exemption was claimed and not granted, the 1st respondent had preferred an appeal by special leave but the same has already been disposed of. It has been fairly st .....

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..... e prescribed period, the assessee is obligated to pay the interest for the delayed period. 16. The aforesaid being the fulcrum of cavil, we are obliged to refer to the relevant paragraphs of SO No. 480 dated 22.12.1995. They read as follows:- S.O. No. 480, dated 22-12-1995:- In exercise of powers conferred by Section 23A of the Bihar Finance Act, 1981(Bihar Act No. 5 of 1981) Part I, the Governor of Bihar on being satisfied that it is necessary to do so in the interest of industrial growth, is pleased to permit those new units which started production between 01-09-1995 to 31-08-2000 and which have the registration certificate issued from the prescribed authority and been given eligibility certificate for this purpose, are allowed to defer the payable sales tax on the sale of manufactured finished goods for a prescribed period under the following terms and conditions: x x x x x 5. Repayment of deferred tax amount by industrial units:- Repayment of deferred tax amount by industrial units:- (1) The repayment of deferred tax amount shall have to be done after the completion of eligibility period of deferment or the prescribed percentage limit of fixed c .....

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..... rpose, he has placed reliance on the authority in Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise Customs, Surat and Two ors. (1969) 2 SCR 252. 19. We have already reproduced the relevant paragraphs of the notification. Regard being had to the language employed therein, we have to appreciate what has been laid down in Hansraj Gordhandas (supra). The passage from which Mr. Dave, learned senior counsel has drawn inspiration reads as follows:- It was contended on behalf of the respondent that the object of granting exemption was to encourage the formation of cooperative societies which not only produced cotton fabrics but which also consisted of members, not only owning but having actually operated not more than four power-looms during the three years immediately preceding their having joined the society. The policy was that instead of each such member operating his looms on his own, he should combine with others by forming a society which, through the cooperative effort should produce cloth. The intention was that the goods produced for which exemption could be claimed must be goods produced on its own behalf by the society. We are unable to accept th .....

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..... y particular rule . 22. The said passage has been referred with approval by the Court in Utkal Contractors and Joinery Pvt. Ltd. and others v. State of Orissa and others (1987) 3 SCC 279. 23. In M/s Doypack Systems Pvt. Ltd. v. Union of India others (1988) 2 SCC 299 a two-Judge Bench while emphasising on the concept of interpretation opined thus:- 58. The words in the statute must, prima facie, be given their ordinary meanings. Where the grammatical construction is clear and manifest and without doubt, that construction ought to prevail unless there are some strong and obvious reasons to the contrary. Nothing has been shown to warrant that literal construction should not be given effect to. See Chandavarkar S.R. Rao v. Ashalata (1986) 4 SCC 447, 476 approving 44 Halsbury s Laws of England, 4th Edn., para 856 at page 552, Nokes v. Doncaster Amalgamated Collieries Limited 1940 AC 1014, 1022 . It must be emphasised that interpretation must be in consonance with the Directive Principles of State Policy in Article 39 (b) and (c) of the Constitution. 59. It has to be reiterated that the object of interpretation of a statute is to discover the intention of th .....

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..... sion, where the purpose is apparent to the judicial eye some violence to language is permissible. 26. Sabharwal, J. (as His Lordship then was) has observed thus:- It is well-recognised rule of construction that a statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. It was held that construction suggested on behalf of the Revenue would lead to a wholly unreasonable result which could never have been intended by the legislature. It was said that the literalness in the interpretation of Section 52(2) must be eschewed and the court should try to arrive at an interpretation which avoids the absurdity and the mischief and makes the provision rational, sensible, unless of course, the hands of the court are tied and it cannot find any escape from the tyranny of literal interpretation. It is said that it is now well-settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the legislature, the court may modify the language used by the legislature or even do some violence to it, so as to achieve the obvio .....

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..... The period remains intact, that is, 8 years. The repayment has to be done in equal six monthly instalments and that period is 5 years. The repayment commences after completion of eligibility period of deferment or the prescribed percentage limit of fixed capital investment, whichever is earlier. The prescribed authority can grant an eligibility certificate but he has to keep in view the terms and conditions stipulated in the notification. The said authority cannot travel beyond the stipulations of the notification. The language employed in the notification conveys that the grant of certificate has to be such that after expiration of the eligibility period, the amount has to be paid back within a span of 5 years but the gap cannot exceed 13 years from the date of start of deferment. The postulate enshrined therein has to be appositely appreciated. It does not flow from the notification that if a benefit is granted for 8 years or for a lesser period, the assessee cannot claim that the repayment has to be completed within 13 years from the date of grant. In the case at hand, the claim of the assessee that the repayment schedule has to continue for a period of 13 years from 2006, for .....

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