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TMI Blog2003 (3) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... uch later. 2.Briefly stated the facts of the case are that the respondent is engaged in the business of manufacturing cooling towers. It commenced production with effect from June, 1986. On December 3, 1986 it applied to the Director of Industries, West Bengal, for grant of registration. There is some dispute as to whether this application was for grant of registration or for the grant of provisional registration, a question on which we wish to express no opinion. It appears that the said application was not disposed of and therefore sometime after February, 1988 as contended by the appellant, the respondent applied afresh for permanent registration which was granted by order dated March 31, 1988. The question, which arises for consideration, is whether the respondent is entitled to the benefit of exemption under the aforesaid notification with effect from March 31, 1988, the date on which registration was granted. 3.The Collector by his order dated January 31, 1989 took the view that benefit of the exemption can be granted only with effect from the date on which the registration certificate was issued. He observed that the respondent had applied for provisional registration on 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intent. So considered it would appear that with a view to give some relief to small scale industries, certain exemptions were provided under the said notification. The exemption was meant to benefit an industry which qualified as a small scale industry. With a view to avoid any controversy as to their status as a small scale industry, the notification recognized the certificate issued by the Director of Industries to this effect. Once it is found by the Director of Industries that the industry qualifies as a small scale industrial unit, he is bound to issue the certificate of registration. However, no time bound procedure has been provided. It may at times take several months or years for the competent authority to issue the certificate envisaged in paragraph 4 of the notification. In such a situation can it be said that the small scale industry should be deprived of the benefit which would have accrued to it had the application for registration been disposed of immediately. In our view it would be unreasonable to deprive a small scale industry of the benefit under the notification particularly when the notification does not in terms provide that the certificate shall become effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t upon the contemporaneity of the holding of the certificate with the purchases and that it is sufficient if the dealer, subsequently, comes to hold certificate "in respect thereof". It seems possible to say that to insist upon a contemporaneity of the purchases and the certificate would also amount to qualifying the word 'holds' in the section by adding the words "at the time of the purchases." 9.In The Assessing Authority and Ors. v. Patiala Biscuits Manufacturers Pvt. Ltd. [1977 Sales Tax Cases (39) 381] this Court was called upon to interpret Rule 5 as it existed before its amendment in October, 1966. The earlier rule provided for registration of a dealer and issuance of a certificate of registration in the prescribed form. By amendment of October 10, 1966 some of the words were deleted and the following was added towards the end of Rule 5 : "…in form S.T. IV which shall be valid from the date of receipt of application for registration by the Assessing Authority or from the date of commencement of the liability to pay tax, whichever is later." 10.The submission before this Court was that as from the date of the amendment, the benefit of notification could be extended to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng other conditions. Reliance was also placed in U.O.I. v. Wood Papers Ltd. reported, in [1990 (47) E.L.T. 500]. We may apply this principle to the case in hand. No doubt, so far the authorities are concerned they must examine the claim of the respondent to be a small scale industry strictly and in accordance with the rules. However, once it is found that the industry qualifies as a small scale industry, in the matter of grant of exemption a liberal approach is permissible if it does no violence to the language of the notification. In a case of this nature it is only reasonable to take the view that the benefit of exemption will accrue to a unit found to be a small scale industrial unit from the date on which the application was made for grant of registration certificate. Such a unit should not be deprived of the benefit to which it is otherwise entitled as a small scale industrial unit merely because the authorities concerned took their own time in disposing of the application. We therefore, agree with the majority view of the Tribunal and hold that the benefit of exemption under the notification in question should be extended to the respondent with effect from the date on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter to the Tribunal to hear the parties and record a clear finding as to whether the first application made on 3rd December, 1986 was an application for registration whether provisional or permanent, and whether the second application made sometime in February/March, 1988 was an application which was supplemental in nature or in continuation of the first application made on 3rd December, 1986. If the Tribunal comes to the conclusion that the application made on the 3rd of December, 1986 was rejected, then the benefit, of exemption should be extended to the respondent only with effect from the date of the second application made sometime in February, 1988. However, if the Tribunal comes to the finding that the first application made on 3rd December, 1986 remained pending and the second application made sometime in February/March, 1988 was merely a continuation of the first application, being supplemental in nature, then the respondent would be entitled to the benefit of exemption with effect, from the date of the first application i.e. from 3rd December, 1986. The Tribunal will dispose of the appeal accordingly. 13.The bank guarantee furnished by the respondent pursuant to the jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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