2005 Supreme(SC) 526

2005(3) Supreme 199
Supreme Court of India
(From Jharkhand High Court)
B.P. Singh & S.B. Sinha, JJ.
M/s. Tata Iron and Steel Co. Ltd. —Appellant
versus
State of Jharkhand & Ors. —Respondents
Civil Appeal No. 1912 of 2004
With
Civil Appeal No. 2269 of 2005
(@ SLP (C) No. 15419 of 2004)
Decided on 30-3-2005
Counsel for the Parties :
For the Appellant in C.A.No. : 1912/2004 : Gaurav Banerjee, Sr. Advocate, Saurav Agrawal and M.K. Dua, Advocates.
For the Appellant in C.A.No. 2269/2005 : Punit Dutt Tyagi and S.B. Dixit, Advocates.
For the Respondents : Sunil Gupta, Sr. Advocate, Gopal Prasad, Pratap Kalra and Vivek Vishnoi, Advocates.

Important point
Eligibility clause in relation to exemption notification must be given a strict meaning.

Headnote:(i) Central Sales Tax Act, 1956—Section 14—Bihar Finance Act, 1981—Sections 22, 23 and 13(1)(b)—Exemption notifications Nos. 478, 479 dated 22.12.1995—Notifications bearing Nos. 65, 66 and 67 dated 12.1.2002 issued by State of Jharkhand pursuant to Jharkhand Industrial Policy, 2001—Appellant, an existing company is a producer of saleable steel and other alloy products having a production ­capacity of 17.4 lakh tons—It is producing steel through its Hot Rolled Mill —It is registered as a dealer both ­under the Central Act and the Bihar Finance Act—It was granted an industrial ­licence for expansion of its existing ­industrial unit located at Jamshedpur for production of steel to the extent of 21 lakh tons per annum—Government of Bihar issued an Industrial Policy in year 1995 granting exemption to dealers in terms of Section 7(3)(b) of the 1981 Act in respect of tax on purchase or sale of certain goods manufactured by new/expanded/diversified/modernized units—Appellant undertook diversification of its product by establishing a cold rolling mill—Grant of exemption in respect of its cold rolled product granted was withdrawn by the Commissioner of Commercial tax in exercise of its suo motu power of revision—Exemption claimed for existing industrial unit—Whether appellant assessee is entitled to the exemption as claimed—(No)—Both Hot Rolled Mill and the Cold Rolled Mill are existing units—One of them having received the benefits under a different policy, appellants are not entitled to any further relief in terms of notifications dated 12.1.2002.

       Held : The Appellant started its cold rolled mill in terms of a fresh industrial ­licence. It was granted a new industrial licence by the Ministry of Industry of the Central Government on or about 9.11.1998 for manufacture of cold rolled/galvanized/coated/corrugated/painted/varnished steel sheets/strips/coils in the integrated steel plant for a proposed capacity of 1200000.00 ton. It, in view of the judgment of this Court, as referred to hereinbefore, became entitled to the benefit of set off and/or adjustment from the tax paid on purchase of raw materials in terms of Bihar Industrial Policy which was in force for 5 years from September 1, 1995. The Government of Jharkhand has declared its Industrial Policy on or about 25.8.2001, the effective date therefor being 15th November, 2000. The said Policy was put in force from 15th November, 2000. The Appellant’s cold rolled mill as also hot rolled mill, thus, are existing units within the meaning of the Jharkhand State Policy, in terms whereof if a benefit is granted under one policy, no other benefit would be available. (Paras 28 and 29)

       The Industrial Policy of State of Jharkhand is a multi-faceted one. As many as 20 strategies have been laid down therein. Emphasis therein has been laid on the infrastructure inter alia having regard to the United Nations Development Programme Co-operation Framework for India Report. The mining and mineral base industries are in the forefront of the identification of thrust areas. With that in view, under the heading “Commercial Tax Reforms”, clause 28.1 seeks to grant tax benefits both to new industrial units as also existing units. Even ­under its notifications dated 12th January, 2002 issued under the provisions of the Bihar Finance Act, facilities of set off both in relation to inter-State and intra-State sale are to be given to new industrial units as also existing units. Thus, despite the fact that the Appellant, as a juristic person is an assessee or a dealer within the meaning of the 1981 Act; and, thus, was required not only to get itself registered as such but also file one single return in respect whereof there may be one order of assessment; but the same, in our opinion, does not prevent an assessee from claiming separate tax exemptions and/or other tax benefits both in respect of its new industrial units as also its existing units. The Industrial Policy permits the same. (Para 30)

       The notification dated 12th January, 2002, although extends the tax benefits both to the new units as also the existing units, but thereby it does not contemplate that grant of benefit should be extended to separate existing units although they may be producing same but technically different products. The manufactured item is saleable steel. Quality of manufactured steel from CRM and HRM may have difference but as on the date of coming into force of the Jharkhand Industrial Policy as also the notifications issued under the 1981 Act both CRM and HRM were existing units, each one of them cannot get the benefit thereof. (Paras 38)

       We, however, are not oblivious that the doctrine of promissory estoppel would be applicable where a representation has been made by the State in exercise of its power to exempt or abolish a commodity as taxable commodity. Such promise, however, must be made by the persons who have the power to implement the representation. The Appellant furthermore had also understood the legal position in the same manner as would appear from its letter dated 11th February, 2002 wherein it was contended that it is an existing industry prior to 15th November, 2000. (Paras 55 and 56)

       We, therefore, conclude that as both Hot Rolled Mill and the Cold Rolled Mill are existing units, and one of them having received the benefits under a different policy, the Appellants are not entitled to any further relief in terms of the notifications dated 12th January, 2002. (Para 57)

       (ii) Interpretation of Statutes—Fiscal Statute—Exemption notification—Principle that in the event a provision of fiscal statute is obscure such construction which favours the assessee may be adopted—It would have no application to construction of an exemption notification—It is for the assessee to show that he comes within the purview of exemption. (Para 43)