IMPORTANT POINTS
In Taxing statutes there is no room for intendment. Regard must be had to the clear meaning of the words.
Where literal construction creates an anomaly, absurdity and discrimination, statute should be liberally construed even slightly straining the language so as to avoid the meaningless anomaly.

Headnote:(a) Interpretation of statutes – Taxing statutes – No room for intendment – Regard must be had to the clear meaning of the words – However, where literal construction creates an anomaly, absurdity and discrimination, statute should be liberally construed even slightly straining the language so as to avoid the meaningless anomaly. (Para 20, 24)
       (1969) 2 SCR 252; (1987) 3 SCC 279; (2001) 3 SCC 359 – Relied upon
       (1975) 1 All ER 16; (1991) 4 SCC 560; (1986) 3 SCC 91; (1981) 4 SCC 173; (1964) 54 ITR 692 : 1963 AC 557 (HL) – Referred
       (b) Jharkhand Value Added Tax Act, 2005 – Section 95(3)(ii) – Notification S.O. No. 480, dated 22-12-1995 – Para 5(1) – Repayment of deferred tax amount – Within 5 years after the completion of eligibility period of deferment – Eligibility period – “From the date of start of deferment” – 1st respondent granted exemption from 2000, availing it till 2006 – Converted to deferment of tax – Total eligibility period remains the same, 8 years – Repayment within 5 years from completion of eligibility period – Total period not to exceed 13 years – Instantly eligibility period ending in 2008 – Repayment of deferred tax must be completed by 31.08.2013. (Para 27)
       1994 Supp. (2) SCC 259; (2004) 7 SCC 242 – Referred
       Facts of the case:
       M/s. Tata Steel Limited, the 1st respondent herein, had established a manufacturing unit for production of HRP, rounds, structural and other iron and steel products in Dhanbad situated in erstwhile Bihar. The State of Bihar had on 22.12.1995 formulated an industrial policy for tax exemption and/or deferment to such industrial units which started production between 01.09.1995 and 31.08.2000. The major incentive under the policy, apart from others, included eight years sales tax exemption on sale and purchase of material from the date of commencement of production.
       The 1st respondent invested nearly Rs. 2000 crores on its own and the commercial production commenced from 01.08.2000.
       The policy was pursued even after creation of State of Jharkhand in terms of the Bihar Reorganisation Act, 2000.
       On 21.12.2000, the successor State issued an exemption certificate as contemplated in earlier notification issued by the Bihar State.
       The Joint Commissioner of Commercial Taxes, Jharkhand issued certificate of exemption to 1st respondent. This was upheld by Supreme Court.
       The State of Jharkhand withdrew notification nos. 478 and 479 dated 22.01.1995 and SO nos. 57 and 58 dated 02.03.2000 with immediate effect, as a result of which the facility of exemption from payment of sales tax on the purchase of raw materials and also facility of exemption of sales tax on its finished products was withdrawn.
       1st respondent moved the High Court challenging the constitutional validity of Section 95(3)(ii) and Section 96(3) of the JVAT Act. It also challenged the withdrawal of the notification and asserted that the company was entitled to get the benefit of exemption that had already been granted and that there was no justification for withdrawal of the same.
       These writ petitions have been allowed.
       Finding of the Court:
       Respondent’s eligibility expires in 2008. It should repay the deferred tax by 31.08.2013.
       Result: Appeals disposed of.

JUDGMENT :

Dipak Misra, J.

M/s. Tata Steel Limited, the 1st respondent herein, had established a manufacturing unit for production of HRP, rounds, structural and other iron and steel products in Dhanbad situated in erstwhile Bihar. The State of Bihar had on 22.12.1995 formulated an industrial policy for tax exemption and/or deferment to such industrial units which started production between 01.09.1995 and 31.08.2000.

The said policy was issued in exercise of power conferred by Section 23A of the Bihar Finance Act, 1981 (for short, “the 1981 Act”) and the purpose of framing the policy was industrial growth of the State. The policy stipulated that such industrial units should have the registration certificate indicating that the unit was eligible to have the benefits of the policy. The policy was issued with a view to create an atmosphere conducive for growth of industries and optimum utilisation of the natural resources available in the designated/stipulated area. As is evident, by the said policy, the Government intended to attract investors from various parts of the country to invest in the identified areas. The major incentive under the policy, apart from others, included eight years sales tax exemption on sale and purchase of material from the date of commencement of production as stipulated in the policy. Keeping in view the purpose incorporated in the policy, exemption notification under the 1981 Act was issued. The appellant expressed its willingness to install a cold rolling mill in Jamshedpur by investing Rs. 2000 crores. After a final decision was taken upon due deliberation, the 1st respondent sought a confirmation from the State of Bihar to assure the commitment to grant sales tax exemption as stated in the policy as an incentive. Number of meetings took place between the authorities of the State of Bihar and the 1st respondent and in pursuance of the discussion, certain amendments in the policy took place, as a consequence of which a communication was made to the 1st respondent for setting up a cold rolling mill with production capacity of 1.02 million tonnes requiring investment of Rs. 1874.04 crores on the project. Regard being had to the discussion and the communication, the 1st respondent invested nearly Rs. 2000 crores on its own and the commercial production commenced from 01.08.2000.

2. When the matter stood thus, the Bihar Reorganisation Act, 2000 came into existence on 15.11.2000 as a result of which Jamshedpur became part of a newly carved out State, namely, Jharkhand. After coming into force of the new State, on 15.12.2000, the Governor of Jharkhand by notification ordered that the 1981 Act, the Central Sales Tax (Bihar) Rules, 1956 and the notifications made thereunder, etc. amongst other Acts, Rules and Regulations, shall be deemed to be in force in the entire State of Jharkhand w.e.f. 15.11.2000. On 21.12.2000, the successor State issued an exemption certificate as contemplated in earlier notification issued by the Bihar State Finance and Commercial Taxes Department exempting the new units which also included the unit established by the 1st respondent, from the purchase tax as well as the sales tax on purchase and sales made in regard to the cold rolling mill. Be it stated that the said certificate was issued after holding proper enquiry by the concerned Joint Commissioner. After due enquiry, he had opined that though the raw materials for the manufacture of CR product is HR product, the CR product is totally different, both in its metallurgical components and the end-use, and the two products were commercially recognised as different products. Hence, the cold-rolled products manufactured by the new unit being different from the hot-rolled product manufactured by the old unit, the appellants were entitled to exemption of sales tax as provided under the industrial policy. On that score, he had approved issuance of the certificate. However, the Commissioner of Commercial Taxes, Jharkhand initiated a suo mot

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2016 Supreme(SC) 149

SUPREME COURT OF INDIADipak Misra, N.V. Ramana, JJ.State of Jharkhand & Ors. – AppellantsVersusTata Steel Ltd. & Ors. – RespondentsCivil Appeal No. 4285 of 2007Decided on : 12-02-2016

Cases Referred (10)

SUPREME COURT OF INDIA
Dipak Misra, N.V. Ramana, JJ.
State of Jharkhand & Ors. – Appellants
Versus
Tata Steel Ltd. & Ors. – Respondents
Civil Appeal No. 4285 of 2007
Decided on : 12-02-2016