TMI Blog2003 (12) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Sales Tax Act. It was a partnership firm and the registration No. 60/01/2791 of 17-9-1999 was granted to them for their business of manufacturing articles by the Director of Industries. The registration under the said Act was bearing No. DA/5806, dated 1-12-1999 and was effective from 13-10-1999 and it was for the purpose of manufacture of the items like corrugated board and boxes, kraft paper rolls, starch, glue, stitching wire, waste paper, ink, plastic twine and sutli. Similarly, the registration under the Central Sales Tax Act was bearing No. DA/CST 5264. However, Sharda Industries informed the respondents under their letter dated 18-3-2000 that they had not yet commenced production as they had decided not to carry out the manufacturing activity in relation to the products for which the registration was obtained. Thereafter, the registration was amended by Sharda Industries with effect from 20-2-2001 for inclusion of items like computer stationery, computer consumables, note books, exercise books, registers, files plain or printed, printed forms/paper, stationery, addin/telex/fax rolls, carbon black coated/sized/slitted paper sheets/rolls, copier paper/duplicating paper, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned Notifications seeking to deny the exemption retrospectively with effect from 1-5-2000 are therefore bad in law in as much as that the respondents have no power to withdraw the exemption notifications retrospectively. He also submitted that the exemption goes with the business and the business of Sharda Industries having been acquired and succeeded by the petitioners, the benefits which Sharda Industries were availing in terms of the provisions of law in force at the time when Sharda industries were carrying on with their business, the same cannot be denied to the petitioners. He further submitted that the exemption available under entry No. 68 refers to all the products manufactured by the industries described under the said provision and not in relation to specific or specified products of such industries. Reliance is sought to be placed in the decisions in the matters of Mohinder Singh Gill and another vs. The Chief Election Commissioner, New Delhi and others, reported in AIR 1978 SC 851, Tata Engineering and Locomotive Company Ltd. and another vs. State of Maharashtra and others, reported in (1992) 86 STC 180, State of Bihar and others vs. Krishna Kusar Kabra and another, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry No. 68 was under section 10 and therefore it was in relation to the products manufactured in terms of registration and by the industries to which the said Notification was applicable. Reliance is placed in the decisions in the matters of Commissioner of Income-Tax vs. Podar Cement Pvt. Ltd. and others, reported in 1997 Vol. 226 I.T.R. 625, Commissioner of Income-Tax, Bombay City VI, Bombay vs. Hico Products Pvt. Ltd., Bombay, reported in 1991 Mh.L.J. 213, Tata Engineering and Locomotive Company Limited and another vs. State of Maharashtra and others, reported in 1998 109 S.T.C. 567, Union of India vs. Aflon Engineering Corporation, reported in (2001) 10 SCC 677, Arvind Industries and others vs. State of Gujarat and others, reported in (1995) 99 STC 333 and M/s Punjab Traders and others vs. State of Punjab and others, reported in AIR 1990 SC 2300. 5. Upon hearing the learned Advocates and on perusal of the records and taking into consideration the facts and circumstances of the case, the following questions arise for consideration :- (i) Whether the exemption benefits under the second Notification of December were available only to those products for which the registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule, the goods manufactured, processed or assembled in the Union Territory of Daman and Diu by any Small Scale Industry which was set up on or after the date of coming into force of the said provision and which had not gone into production and had not effected any sale of goods manufactured, processed or assembled by it on any date prior to the date of coming into force of the said provision, at the point of sale made by such Small Scale Industry for a period of 15 years from the date of first sale of the goods manufactured, processed or assembled, effected by such Small Scale Industry on or after the date of its registration under the said Act, were exempted from the payment of tax under the said Act. The entry No. 68 specifically referred to any goods manufactured, processed or assembled by a Small Scale Industry set up in the Union Territory of Daman and Diu. The entry did not relate to any specific type of industry as such but refers to all the industries which were set up during the period specified under the said entry. At the same time, the entry did not restrict to any specified product manufactured by such industry or industries. In other words, the entry related t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by him in any other form. This will include power to amend the certificate pursuant to the application filed by the dealer for amendment in relation to the class or classes of goods. The sub-section (7) of section 11 provides that when any business in respect of which a certificate has been granted to a dealer has been discontinued or transferred, or a dealer has ceased to be liable to pay tax under section 4 of the said Act, the Commissioner shall cancel the registration. The section 12 relate to voluntary registration of dealers and section 14 pertains to special registration, with which we are not concerned in the matter. 10. The section 13 relates to provisional registration and sub-section (1) thereof provides that any person who intends to establish a business in the Union Territory of Daman and Diu for the purpose of manufacturing or producing goods of a value exceeding ₹ 10,000/- per year, may, notwithstanding that he is not required to register himself under section 11, apply in the prescribed manner to the prescribed authority for provisional registration under the said Act. The sub-section (2) thereof provides that if the said authority, after making such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to inform the prescribed authority under section 23(c) and to get the certificate amended under section 13(4) read with section 11(4) of the said Act, failing which the registration can be cancelled by the Commissioner under section 11(7) and (8) of the said Act. 12. The sub-section (4) of section 24 provides that where a. dealer, liable to pay tax under the said Act, transfers or otherwise disposes of his business in whole or in part, or effects any change in the ownership thereof, in consequence of which he is succeeded in the business or part thereof by any other person, the dealer and the person succeeding shall jointly and severally be liable to pay the tax, including any penalty, due from the dealer under the said Act, upto the time of such transfer, disposal or change, whether such tax, including any penalty, has been assessed before such transfer, disposal or change but has remained unpaid, or is assessed thereafter. The section 24(6) provides that where a dealer, liable to pay tax under this Act, is succeeded in the business by any person in the manner described in clause (a) of sub-section (1) or in sub-section (4), then such person shall be liable to pay tax on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior to the issuance of the first Notification of December and prior to the deletion of the entry No. 68 from the Second Schedule of the said Act. Therefore it cannot be disputed that Sharda Industries were entitled to claim benefit under the entry No. 68 in relation to the said goods even after issuance of the first Notification of December in view of the provisions contained in Clauses VII, VIII and IX of the second Notification of December. It is equally true that the petitioners are the successors of Sharda Industries consequent to transfer of the industrial establishment of Sharda Industries in favour of the petitioners under conveyance dated 8-3-2001 and therefore the petitioners stepped in the shoes of Shards Industries for all purposes, including the liability, if any, under the said Act as well as for the benefits available under the said Act. 16. The contention of the respondents, however, is that the impugned Notifications are merely clarificatory in nature and the same seek to clarify that the assurance given under Clause DC of the second Notification of December would be available to those industries who had not effected any change upto 30-4-2000 in the class of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and those which were enjoying the same prior to 31-12-1999 were allowed to continue to enjoy the same for the balance period of exemption in relation to those goods, the production of which had commenced by such industries prior to April, 2000 provided that the goods so manufactured were in terms of the registration certificate obtained prior to 31-12-1999. In other words, the impugned Notifications merely sought to clarify that the exemption would be available only in relation to the products which were manufactured by the industries which were availing such exemption prior to 31-12-1999 provided that there had been no change in production of such goods even after 30-4-2000. 20. It is true that by virtue of the first Notification of December, the exemption entry No. 68 stood deleted from the Second Schedule of the said Act. The effect of deletion being that the exemption which was available under the said entry could not be claimed w.e.f. 1-1-2000, but for Clause IX of the second Notification of December. It is pertinent to note that the second Notification of December was issued in terms of sub-section (1) of section 10A of the said Act. The sub-section (1) of section 10A empo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablishment was purchased by the petitioners on 8-3-2001. Though Sharda Industries commenced production with effect from 24-2-2001, the registration regarding class of goods to be manufactured by Sharda Industries was amended with effect from 20-2-2001. In other words, there was no production of goods prior to 31-12-1999 of even 30-4-2000 by Sharda Industries and the products which were manufactured by Sharda Industries from 24-2-2001, were pursuant to the amended registration. Being so, even Sharda Industries were not entitled to claim any benefit under the entry No. 68 read with Clause IX of the second notification of December in relation to the product manufactured in terms of amended registration certificate. Undisputedly the products manufactured by the petitioners are not in terms of unamended registration certificate issued to Sharda Industries, but are in terms of amended certificate of registration issued on 20-2-2001. In other words, the petitioners would also be not entitled to avail the benefit of exemption under the said provision's of law. 22. The decisions in the matters of Krishna Kumar Kabra, Shri Krishna Enterprises, The Vemmiganur Spinning Mills Limited, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that very first instance restrict the ambit of the exemption notification to a particular variety of goods. After all, no manufacturer has a right to claim exemption. It is a relief which is granted by the Government in case where it thinks appropriate and proper. Exemptions could be granted subject to certain conditions. They may even be granted, as in this particular case, to a small variety of items which would otherwise fall under Tariff Item 15-A. If the explanation could have been inserted in 1971 when the exemption was first promulgated there is, in our opinion, no legal impediment in the Government issuing a notification which has the effect of amending an earlier notification and thereby restricting the operation of the exemption notification. Under the General Clauses Act when power is given to the Government to issue notification there is inherent in the same power to amend the same. This is precisely what has happened in the present case. 25. In Arvind Industries, it was held that the Government is entitled to grant exemption to industries having regard to the industrial policy of the Government, and the Government is equally free to modify its industrial policy and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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