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IN THE HIGH COURT OF GAUHATI
R.S. Garg, C.J. and Ranjan Gogoi, J.
Deepak Kumar Poddar
Vs.
State of Assam and Ors.
Writ Appeal No. 176 of 2007
Decided On: 18.05.2010
Assam Industries Scheme, 1997 - Section 9 - General Sales Tax Act, 1993 – Acquittal – Evidence – Taxes - As exemption from sales tax is regulated by provisions of Section 9(4) of Act which contemplates framing of appropriate schemes by State Government Assam Industries Scheme was accordingly framed. Section 9(4) of Act and Clause (III) of Scheme which are in following terms, will be required to be specifically noticed and therefore – Held, Word production has not been defined in Assam Act court will, therefore have to understand meaning of said word by reference to its everyday/common use and by its dictionary meaning- There can be no dispute that production denotes bringing something into life or existence by human effort - Such human effort naturally has to be on something already existing though it is not impossible to visualize production of goods also from non-existent goods mining of minerals - If something already exists what would come to life or existence therefore logically has to be something different something new - Position has been succinctly explained by apex court in Commissioner of Income Tax and by observing that word production has a wider connotation than word manufacture - While every manufacture can be characterized as production every production need not amount to manufacture - Word production or produce when used in juxtaposition with word manufacture takes in bringing into existence new goods by a process which may or may not amount to manufacture - It also takes in all by-products, intermediate products and residual products which emerge in course of manufacture of goods - Appeal dismissed
Ranjan Gogoi, J.
1. Aggrieved by the rejection of his writ petition, the appellant who is the sole proprietor of M/s. Tirupati Food Products, has instituted the present proceedings.
2. The brief facts that will be required to be noticed for the purposes of the present adjudication may be stated at the outset:
The petitioner claims to be engaged in the business of manufacture and sale of packaged pure mustard oil in a registered small-scale industrial unit located at Pancharatna Road, Goalpara in the State of Assam. The aforesaid unit of the petitioner which went into commercial production in the year 2003, it is stated, was set up pursuant to the Assam Industries (Sales Tax Concession) Scheme, 1997 which was framed in exercise of powers under Section 9(4) of the Assam General Sales Tax Act, 1993 (hereinafter referred to as, "the Act"). It is the pleaded case of the petitioner that in the Industrial Policy Resolution announced by the Government of Assam in the year 1997, amongst others, individual industrial units established after April 1, 1997 were promised sales tax exemption on the sale of finished products as well as on the purchase of raw materials. Such exemption was to be granted for a period of seven years from the date of commencement of commercial production.
3. As exemption from sales tax is regulated by the provisions of Section 9(4) of the Act which contemplates the framing of appropriate schemes by the State Government, the Assam Industries (Sales Tax Concession) Scheme, 1997 was accordingly framed. Section 9(4) of the Act and Clause (III) of the Scheme, which are in the following terms, will be required to be specifically noticed and, therefore, the said provisions are being reproduced herein-below:
9. (4) The State Government may, from time to time by notification in the Official Gazette, frame one or more schemes for the grant of relief to any class of industries within the State or within any specified part of the State on or after such date as may be specified in such scheme and producing such goods as may be specified therein by way of full or partial exemption of any tax payable under this Act on the raw materials or other input purchased by them within the State or on the manufactured goods sold by them within the State or in the course of inter-State trade or commerce for such period or periods as may be specified or by way of deferment of the tax payable by them under this Act for such period as may be specified and subject to such other restrictions and conditions as may be provided in such scheme or schemes
Clause III
The scheme shall apply to the industrial units situated in Assam, which are considered eligible for sales tax exemption on purchase of raw materials within the State of Assam and also on the sales of the finished products, manufactured in such eligible units in the State of Assam and in the course of inter-State trade and commerce, with reference to the 1997 Incentive Scheme' formulated in pursuant to the 'Industrial Policy of Assam, 1997'.
4. According to the petitioner, being eligible, the Directorate of Industries, Government of Assam, granted an eligibility certificate to the petitioner on February 12, 2004 certifying the petitioner's unit to be eligible for sales tax exemption on the finished products manufactured in the said unit as well as on the raw materials used. In the said eligibility certificate, which was valid from May 18, 2003 to May 17, 2010, it was specifically mentioned that the raw materials on which the petitioner would be entitled to exemption are "mustard seeds" and "raw mustard oil" and the finished product as mustard oil. However, the District Level Committee in a meeting held on April 9, 2004 took the decision that the process of filtration of raw mustard oil and, thereafter, packing the filtered mustard oil in plastic pouches, which was being undertaken in the unit of the petitioner, does not amount to manufacture/processing as there is no physical change of th
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