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TMI Blog1998 (11) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax. It appears that the petitioners filed an application for grant of eligibility certificate under the provisions of rules on the ground that in view of the resolution of the State Government in the Department of Industry, dated September 6, 1989, the industry of the petitioners qualifies for the benefit of the deferment scheme of the sales tax. On July 13, 1992, on the basis of this submission, this court directed respondent No. 4 to place the application before the District Level Committee for its disposal. The District Level Committee was directed to dispose of the said application within two months. Pursuant to that order, the District Level Committee disposed of the application of the petitioners by its order dated January 9, 1995, holding that the industry of the petitioners is entitled for deferred payment at 90 per cent. on the investment in fixed assets. However, the Committee rejected the claim of the petitioners for deferred payment on the investment made by the petitioners by way of bottles and crates, electrification and tools on the ground that those are not plant and machinery. By filing an amendment petition, the petitioners challenged the said order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act and, as such, those decisions are not applicable to the facts and circumstances of this case. However, he has not drawn our attention to any decision either of the High Court or of the Supreme Court to substantiate his argument. Having regard to the respective contentions, the only question which arises for consideration is as to whether an assessee-company which manufactures and sells soft drinks, can claim deferred payment in respect of bottles and crates used by it and the company is entitled for the same, as the bottles and crates must be deemed to be plant for the purpose of the Acts and Rules. In Webster's New Twentieth Century Dictionary, the word "plant" has been defined as the tools, machinery, fixtures, buildings, grounds, etc., of a factory or business; the apparatus or equipment for a certain mechanical operation or process. Similarly, according to the Shorter Oxford English Dictionary (Third Edition), the meaning of the word "plant" has been given as the fixtures, implements, machinery and apparatus used in carrying on any industrial process. Plant in its ordinary sense includes whatever apparatus is used by a businessman for carrying on his business; not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential amenities or conveniences which are normally provided in any good hotel in the present times and, as such, they constitute "plant" within the meaning of the Act. In the premises of the aforesaid authoritative pronouncement, in my considered opinion, having regard to the business of the petitioners of manufacturing soft drinks, it must be held that bottles and crates are plant for which the petitioners are entitled for grant of deferment payment in respect of bottles and crates. I have already indicated that no counter-affidavit in reply to the amendment petition has been filed by the respondents. But pursuant to our order dated December 1, 1995, written notes of submissions were filed by the parties. In their written notes the respondents annexing some circulars have contended that the District Level Committee has rightly rejected the claim of the petitioners for grant of exemption for deferment of sales tax in respect of investment made towards bottles and crates and in view of the industrial policy issued from time to time as also the circulars and notifications issued by the Government in exercise of powers conferred by the Industries (Development Regulation) Act, 1951, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein and hereafter referred to as "the company"), in bottles and crates can be said to be investment in "plant" so as to amount to "fixed capital investment" under the Bihar Sales Tax Supplementary (Deferment of Tax) Rules, 1990 (hereinafter referred to as "the Deferment Rules"). The company is engaged in the business of manufacturing soft drinks and beverages. It is a registered dealer under the Bihar Finance Act, 1981. It filed a writ petition being Civil Writ jurisdiction Case No. 1118 of 1992, through its director-respondent No. 2 in the Patna High Court for a direction to the State Government and its officers, the appellants herein, to accord permission under rule 42(7) of the Bihar Sales Tax Rules, 1983, and exempt it from using Form No. XXVIII-B. While the petition was pending before the High Court, it made an application under the Deferment Rules to the competent authority for grant of an eligibility certificate which would enable it to claim benefit of deferment of payment of sales tax scheme declared under the Deferment Rules. It was stated in the application that under the resolution of the State Government dated September 6, 1989, and the Deferment Rules, it was qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a thing is of durable nature and fixed like land, building or machinery, it cannot be said to be "plant" and, therefore, bottles and crates have been wrongly held as "plant". He also submitted that all the decisions relied upon by the High Court were under the Income-tax Act, 1961, which defines the word "plant" very widely and, therefore, they were really not relevant for the correct interpretation of the word "plant" as used in rule 2(v) of the Deferment Rules. On the other hand, learned counsel for the respondents supported the decision of the High Court on the grounds given by the High Court in its judgment. Therefore, what we have to consider is whether under the "Deferment Rules", "plant" would include bottles and crates employed by an industrial unit manufacturing soft drinks and beverages for carrying on its business. The word "plant" has a very wide meaning and a variety of articles, objects or things have been held to be plant. Dictionaries have defined plant as land, building, fixtures, machinery, implements and tools, and apparatus used in carrying on a mechanical operation or an industrial process. This court in CIT v. Taj Mahal Hotel [1971] 82 ITR 44 and Scientific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovide for deferred payment of sales tax in respect of sale of goods manufactured by new industrial units and existing industrial units under expansion. The deferment is limited to 90 per cent. of the fixed capital investment in fixed capital assets at the time of grant of eligibility in the case of new industrial units and 90 per cent. of the additional fixed capital investment in the case of an existing industrial unit undertaking expansion. For claiming the benefit of deferred payment, an eligible unit has to apply for a certificate of eligibility. The District Level Committee or the State Level Committee, as the case may be, adjudges the eligibility of the industrial unit. An application for grant of an eligibility certificate made by a small-scale industrial unit is required to be considered by the District Level Committee of the district in which the industrial unit is situated. The District Level Committee, after considering the report prepared by the District Industries Centre or the Director of Industries and any other relevant information, decides whether and to what extent the industrial unit is entitled to the benefit of deferment. The extent of benefit is partly made d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notifications of the Government of India in the Ministry of Industry (Department of Industrial Development), dated April 2, 1991, and January 1, 1993, issued under section 11-B of the Industries (Development and Regulation) Act, 1951. Notification No. 232, dated April 2, 1991, while stating what has to be included under fixed assets while ascertaining whether a small-scale industrial unit's investment has exceeded the limit of Rs. 60 lakhs, has clarified that the cost of storage tanks which store raw material or finished products is to be excluded. The 1993 notification has amended the notification of April 2, 1991, and clarified by adding Note No. 2 that in calculating the value of plant and machinery, the cost of storage tanks which store raw materials/finished products only and which are not linked with the manufacturing process shall be excluded. On May 8, 1995, the Government of India again issued a circular, after having received representations from the industry seeking clarification whether bottles and crates are to be taken into account for determining the SSI status of the units engaged in manufacture of soft drinks/concentrates, clarifying that investment in bottles and ..... 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