IMPORTANT POINT
When a policy granting certain benefits is extended, the extension is continuous. Merely because department takes some time in notifying it does not mean that the benefit will not be available in the interregnum period.

Headnote:Section 8(5)(b) of the Central Sales Tax Act, 1956 – Industrial Policy 2004 – Concession in Central Sales Tax granted to new units till 31.3.2009 – Concession extended 31.3.2013 – Department notifying the same on 18.06.2009, with immediate effect – Department contending that notification takes effect from date of issue and hence concession not available during 01.4.2009 to 18.06.2009 – Not tenable – When the Government policy resolution extended the tax concession beyond 31.03.2009 till 31.03.2013 it cannot be denied for the period of time taken by the department to issue the – Further, the notification relates to 2004 policy and covers units established after 2004 and not prior to that – State or its departments cannot go contrary to the policy – Also the notification not introducing a new policy or concession which could be made effective from the date of notification – Department’s contention rejected. (Para 10, 12)
       (1999) 1 SCC 31; (2006) 4 SCC 57 – Relied upon
       Facts of the case:
       Whether the appellant is liable to pay Central Sales Tax (hereinafter referred to as “CST”) @ 2 per cent on the inter-State sales for the period 01.04.2009 to 17.06.2009 or @ 1 per cent in view of the Industrial Policy of the State, is the dispute arising for consideration in this case.
       As per the Industrial Policy of the State of Himachal Pradesh, the appellant had been enjoying the concessional rate in CST @ 1 per cent upto 31.03.2009.
       The period of concession was extended upto 31.03.2013 or till the CST is phased out.
       The present dispute arose on account of the Notification dated 18.06.2009 issued by the Excise and Taxation Department granting the concessional rate of the CST @ 1 per cent wherein the expression “… with immediate effect for the period ending 31.03.2013” was used.
       The High Court took the view that the expression “… with immediate effect” has to be given a plain meaning, and therefore, the appellant is not entitled to the concession which it had been enjoying upto 31.03.2009 till the Notification dated 18.06.2009 is issued by the Excise and Taxation Department.
       Finding of the Court:
       Impugned judgment is not sustainable.
       Result: Appeal allowed.

JUDGMENT :

KURIAN, J.:

Leave granted.

2. Whether the appellant is liable to pay Central Sales Tax (hereinafter referred to as “CST”) @ 2 per cent on the inter-State sales for the period 01.04.2009 to 17.06.2009 or @ 1 per cent in view of the Industrial Policy of the State, is the dispute arising for consideration in this case. It is not in dispute that as per the Industrial Policy of the State of Himachal Pradesh, the appellant had been enjoying the concessional rate in CST @ 1 per cent upto 31.03.2009. It is also not in dispute that the Cabinet had taken a policy decision to extend the period of concession upto 31.03.2013 or till the CST is phased out. Still further, it is not in dispute that the Department of Industries had, accordingly, issued a notification extending the concessions from 01.04.2009 to 31.03.2013 or till the time the CST is phased out. The dispute arose on account of the Notification dated 18.06.2009 issued by the Excise and Taxation Department granting the concessional rate of the CST @ 1 per cent wherein the expression “… with immediate effect for the period ending 31.03.2013” was used.

3. The High Court, as per the impugned judgment, took the view that the expression “… with immediate effect” has to be given a plain meaning, and therefore, the appellant is not entitled to the concession which it had been enjoying upto 31.03.2009 till the Notification dated 18.06.2009 is issued by the Excise and Taxation Department.

4. Heard Shri M.P. Devanath, learned Counsel appearing for the appellant and Shri Suryanarayana Singh, learned Additional Advocate General appearing for the respondent-State.

5. In order to appreciate the contentions advanced by the parties, it is necessary for us to refer to the background of the dispute. Industrial Policy-2004 was notified by the State of Himachal Pradesh, providing for, inter alia, at Clause 10.3 concessional rate in Central Sales Tax:

“10.3 Central Sales Tax at a concessional rate of 1% shall be leviable on the goods manufactured by new and existing industrial units (as defined under these Rules) unless provided otherwise elsewhere under these Rules, upto 31-03-2009. This incentive will not be provided to industrial unit engaged in the production of breweries, distilleries, non-fruit based wineries and bottling plants (both for country liquor and Indian made foreign Liquor).”

6. It is not in dispute that the appellant was found eligible for the said concession since it satisfied the parameters prescribed in the notification till 31.03.2009. It is seen from the Cabinet Note on extension of the incentive of concessional rate of CST @ 1 per cent beyond 31.03.2009 to industrial enterprises of the State of Himachal Pradesh prepared on 19.05.2009, the issue whether the concession should be extended beyond 31.03.2009 for some more time, was specifically addressed. To quote the relevant discussion:

“3. … The State Government has been vigorously pursuing at various levels with Government of India the case for the extension of the Special Package for our State announced in January 2013 till at least March 2013 as it expires in March 2010. In the absence of any decision or any positive indications so far, it is imperative that the State Government also at its own level considers taking such initiatives by way of which Industrial Enterprises being set up in our State could be provided some basic attraction in the form of tax incentives and a facilitating environment. Availability of such incentives in the neighbouring State such as Uttarakhand where the incentive of 1% CST is available to the industrial units till March, 2014 renders our State uncompetitive and Unattractive to industrial investors. During the year 2007-08 the Industrial Enterprises of the Ste had contributed a sum of Rs.113.47 Crores to State exchequer through 1% CST. In case the incentive of 1% CST is not restored till the time the CST is phased out by Central Government it will affect the viability of units adversely

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2015 Supreme(SC) 851

SUPREME COURT OF INDIAANIL R. DAVE, KURIAN JOSEPH, ADARSH KUMAR GOEL, JJ.Lloyd Electric and Engineering Limited – AppellantsVersusState of Himachal Pradesh and others – RespondentsCIVIL APPEAL NO. 6838 OF 2015 (Arising from S.L.P. (C) No. 26751/2013)Decided On : 03-09-2015

IMPORTANT POINTWhen a policy granting certain benefits is extended, the extension is continuous. Merely because department takes some time in notifying it does not mean that the benefit will not be available in the interregnum period.

Cases Referred (2)

SUPREME COURT OF INDIA
ANIL R. DAVE, KURIAN JOSEPH, ADARSH KUMAR GOEL, JJ.
Lloyd Electric and Engineering Limited – Appellants
Versus
State of Himachal Pradesh and others – Respondents
CIVIL APPEAL NO. 6838 OF 2015 (Arising from S.L.P. (C) No. 26751/2013)
Decided On : 03-09-2015

IMPORTANT POINT
When a policy granting certain benefits is extended, the extension is continuous. Merely because department takes some time in notifying it does not mean that the benefit will not be available in the interregnum period.