D. Raju, C.J.
1. These two writ petitions are dealt with together since they arise not only on identical issues, but are between the same parties and submissions have also been made by the learned counsel appearing on either side in common.
C.W.P.No. 51 of 1999 :
2. The above writ petition has been filed by the petitioner-company seeking for the issue of following reliefs :
(a) Issue an appropriate writ, order or direction quashing and/or setting aside the orders of the revisional authority dated February 8, 1999 for the assessment years 1995-96 and 1996-97 annexed hereto as annexure XXXII ;
(b) Issue an appropriate writ, order or direction declaring that the petitioner-company is entitled to full exemption from payment of Central sales tax as well as Himachal Pradesh general sales tax under the exemption notification dated January 30, 1996 for a period of nine years from the date of its commercial production, namely, September 26, 1995 ;
(c) Issue an appropriate writ, order or direction restraining the respondents from realizing the sales tax and purchase tax from September, 1995 till date both under the Central Sales Tax Act, 1956 and Himachal Pradesh General Sales Tax Act, 1968.
3. The case of the petitioners is that it is a public limited company incorporated under the Indian Companies Act, 1956 and it is carrying on the business of manufacture and sale of cement under the name and style of 'Ambuja Cement' in the State of Himachal Pradesh and that it is amongst one of the best managed cement companies in India and it is also claimed that it had been conferred various prestigious awards for its performance, pollution control and management including the award in the year 1991 by the Prime Minister of India, namely, 'National Award for Public Recognition of Outstanding Activity for prevention of control of pollution'.
4. The petitioners' claim to have submitted an application in the year 1989 for setting up a cement plant in Himachal Pradesh and that it was approved by the State Level Industrial Projects and Review Authority (hereinafter referred to as 'IPARA') in their letter dated February 19, 1990 filed as annexure I. Thereupon the petitioners' claim to have invested more than Rs. 500 crores in setting up the cement plant at Darlaghat, Solan District in this State and it is claimed to be the largest investment made by any private entrepreneur so far as this State is concerned. The said cement project also was stated to have had the approval of the World Bank/International Finance Corporation, Washington, who, it is claimed, also financed the project by way of term loan in addition to the project being monitored by the Industrial Development Bank of India too. All these, according to the petitioners, have brought substantial economic development in the State.
5. On March 27, 1991, the Industries Department of Himachal Pradesh Government issued an Incentive Scheme by their notification notifying the grant of certain incentives for new as well as already established units in the State in respect of deferment of payment of sales tax, electricity duty, etc., filed as annexure II. The petitioners obtained provisional sales tax registration from the Himachal Pradesh General Sales Tax Department on February 14, 1992, which, it is claimed, was extended from time to time up to June 30, 1995, before ultimately being granted with permanent registration w.e.f. August 11, 1995, the date on which the petitioner was said to have started its trial production. On July 31, 1992, the Industries Department issued another notification filed as annexure V introducing the concept of 'prestigious and pioneer industries' by amending suitably the earlier notification dated March 27, 1991, according to which 'prestigious unit' meant any new industrial unit, which goes into commercial production in the State on or after May 1, 1992 and is registered with the empowered committee appointed Under Rule 24 between May 1, 1992 and March 31, 1993, which has a fixed capital investment of at least Rs. 50 crores and employed at least 200 persons on regular basis. The empowered committee considered the issue of grant of registration certificate as prestigious unit in its meeting held on November 25, 1992 and decided to grant the same to the petitioner treating it as a 'prestigious unit'. Consequently, the Director of Industries, Himachal Pradesh, issued on January 13, 1993 the required registration certificate registering the petitioner-unit as a 'prestigious unit' vide annexure VI. Inasmuch as the production of the unit could not be commenced by January, 1995, which was one of the stipulated conditions, taking into account the substantial progress made by the petitioner-company, the Industries Department by its letter dated January 28, 1995 approved the grant of further extension initially till June 30, 1995 and thereafter up to September 30, 1995 by their letters dated January 28, 1995 and June 30, 1995, respectively, filed as annexure VII. On December 1, 1994, the Industries Department made further amendments to the notifications dated March 27, 1991 and July 31, 1992 and brought into existence the concept of 'prestigious cement unit', according to which the unit must go into commercial production after May 1, 1992 and registered with the empowered committee Under Rule 24 between May 1, 1992 and March 31, 1995. By the said amendment, it was also notified that such unit should have a fixed capital of Rs. 50 crores and employed at least 200 persons on regular basis vide annexure VIII.
6. In the light of all these, the Excise and Taxation Department issued a notification dated December 31, 1994 to grant exemption from payment of sales tax to pioneer industries, bifurcated in different categories with effect from the date of their commercial production against the periods as enumerated in the notification, vide annexure IX, which was further amended on March 27, 1995 introducing para l(a) and l(b), vide annexure X. On July 6, 1995, the Department of Industries again amended Rule 27(1) regarding the grant of incentive to prestigious cement unit notifying that sales tax exemption/deferment under both Central sales tax and Himachal Pradesh general sales tax shall be available for a period of 12, 9 and 7 years in respect of categories A, B and C blocks, respectively, to new prestigious cement units excluding from its purview the only existing cement unit, as per which the eligible cement units were those, which had come into commercial production within the State of Himachal Pradesh on or after May 1, 1992, vide annexure XII.
7. On August 11, 1995, the petitioner-company started trial production and on September 26, 1995 regular commercial production was started, which according to the petitioner, entitled the company to exemption from sales tax in terms of the notification referred to supra. A formal certificate was also said to have been issued by the Department of Industries on January 24, 1996 specifying the commencement of the commercial production on September 26, 1995 confirming at the same time about the investment of about Rs. 391 crores by the petitioner and employment of 353 persons on regular basis, vide annexure XI. The petitioner also claims to have paid the sales tax due to the department for the intervening period from August 11, 1995 to September 25, 1995. The Excise and Taxation Department appears to have issued an amendment on January 30, 1996 vide annexure XIII to the earlier notification dated December 31, 1994 and thereby introducing para 1-C which was published on February 6, 1996, whereunder the State Government had specifically given exemption to the petitioner-company from payment of sales tax subject to the fulfilment of certain conditions enumerated in the notification. The petitioner being a company classified and placed in the category of industrial block 'B' in terms of which it was shown to be eligible to avail of the concession of exemption for 108 months (9 years).
8. The petitioner also claims that since the petitioner-unit was already registered as a 'prestigious unit' on January 13, 1993 in accordance with the notification issued by the State Government on July 31, 1992 by the empowered committee in its meeting held on November 25, 1992 and inasmuch as the requirements of the 'prestigious unit' and the 'prestigious cement unit' were absolutely one and the same, the petitioner unit was mentioned and referred to in the notification dated January 30, 1996 and that a formal declaration was also made by the Industries Department on February 2, 1996 declaring the petitioner to be a 'Prestigious cement industrial unit' keeping in view the satisfaction of all the requisite eligibility criteria by the petitioner-company vide annexure XIV. It is reiterated for the petitioner that their unit fulfilled all the conditions as required Under Rule 2(rrr), as mentioned in the notification dated July 6, 1995 as well as January 30, 1996 issued by the Industries Department as also the Excise and Taxation Department of the State Government having regard to the fact that the unit has come into commercial production after March 1, 1992, that it was registered with the empowered committee as a 'prestigious unit' on January 13, 1993, that it has already made investment of more than 50 crores and had also employed more than 200 persons on regular basis. The Director of Industries has issued a certificate in form STE-III on February 15, 1996 certifying that the petitioner unit had been registered as a 'prestigious cement industrial unit' with the empowered committee vide annexure XV, pursuant to which the petitioner also made an application to the Excise and Taxation Department for the grant of exemption certificate in STE-II before the assessing authority and thereupon on June 11, 1996, the prescribed authority after due enquiry was said to have issued to the petitioner a certificate of exemption in form STE-II for the period from January 30, 1996 to March 31, 1996 and the same was said to have been extended further from time to time up to March 31, 1998, vide annexure XVI.
9. On March 14, 1997, the assessing authority was said to have made an order of assessment in respect of the petitioner for the assessment year 1995-96 and granted exemption to the petitioner w.e.f. January 30, 1996 vide the order filed as annexure XVII. Aggrieved by a portion of the order, the petitioner has filed an appeal before the Additional Excise and Taxation Commissioner/appellate authority on the ground that the exemption should have been allowed to the petitioner from the date of the commencement of the commercial production, namely, September 26, 1995 and not from January 30, 1996, the date of issuance of exemption notification. On May 27, 1997, the Sales Tax Department appears to have made an order of assessment for the year 1995-96 granting exemption to the petitioner for the payment of the sales tax w.e.f. February 6, 1996, which is the date on which the notification was actually published instead of from January 30, 1996 with reference to which it was granted earlier by an order filed as annexure XVIII. Once again, in respect of this order also, the petitioner filed an appeal before the Additional Excise and Taxation Commissioner/appellate authority challenging the same on the ground that the exemption should have been granted from the date of commencement of the commercial production, namely, September 26, 1995 and not as is sought to be given by the authorities concerned. For the assessment year 1996-97, the assessing authority appears to have passed an order dated October 24, 1997 filed as annexure XIX after considering all the relevant material on record granting exemption from the payment of sales tax.
10. While matter stood thus, it is stated for the petitioner that on March 24, 1998 when the BJP-HVC formed a coalition Government in the State of Himachal Pradesh, the Excise and Taxation Minister, who belongs to the political party HVC and the leaders of the said party started issuing number of statements against the petitioner-company by prejudging the issue and questioning the entitlement of the petitioner for exemption under the incentive scheme announced. These statements in the shape of press cuttings have been filed as annexure XX. The petitioner would contend that on account of such extraneous reasons and influence and with ulterior motives, action was initiated by the Commissioner of Sales Tax without any justification in law and in an arbitrary manner proposing to revise the orders passed by the assessing officer, in exercise of the powers conferred Under Section 31(1) of the Himachal Pradesh General Sales Tax Act, 1968 and for that purpose on April 29, 1998 issued a show cause notice to the petitioner calling upon them to show cause as to why the exemption granted cannot be revoked on the ground that the declaration of the petitioner as a prestigious cement unit within the meaning of para l(c) of the notification was not correct for the reasons set out in the said notice filed as annexure XXI proposing therein also to revoke STE-II. On May 4, 1998, the revisional authority appears to have further issued other three show cause notices being Revision Nos. II, III and IV to the petitioner both under the Central Sales Tax Act for the year 1995-96 and Himachal Pradesh General Sales Tax Act for the year 1996-97 and the Central Sales Tax Act for the year 1996-97 questioning the legality and propriety of the earlier assessment orders granting exemption on the ground that the petitioner was not a prestigious cement unit within the meaning of para 1-C of the notification dated December 31, 1994 and, therefore, was not entitled to any exemption from sales tax either under the State Act or the Central Act and that an allegation has also been made in the said show cause notice about the non-payment of tax said to be payable by the petitioner Under Section 5A of the State Act. As a sequel to the said notices issued by the revisional authority, the assessing authority also appears to have issued show cause notice proposing to withdraw the exemption accorded earlier in form STE-II for the year 1997-98 on similar grounds as were assigned by the revisional authority in its notices, calling upon the petitioner to appear before the said authority on June 18, 1998. So far as the two appeals filed by the petitioner before the Additional Commissioner (Appeals) against the assessment orders dated March 14, 1997 and May 27, 1995 for the assessment year 1995-96, the appellate authority by its order dated October 3, 1998 and October 9, 1998, respectively, dismissed the appeals upholding the assessment framed by the assessing officer that the petitioner was entitled to exemption from payment of sales tax from February 6, 1996, the date of publication of the notification only and not from the date of commencement of commercial production, namely, September 26, 1995. In the light of the replies filed to the notices issued by the revisional authority, the petitioner appears to have requested the assessing authority to adjourn the proceedings relating to the assessment year 1997-98, but on December 1, 1998, the Sales Tax Officer appears to have passed an order withdrawing the exemption earlier granted to the petitioner and directed the petitioner to pay the sales tax to the tune of Rs. 18.50 crores under the State Act as well as the Central Act. It is stated that since para 1-C of the notification dated January 30, 1996 published on February 6, 1996 prohibited by virtue of Clause 5 therein the petitioner from charging tax on the sale of cement manufactured in the new unit and any collection of the sales tax would have exposed the petitioner to penal consequences Under Section 35 of the State Act, the petitioner-company had not actually collected any sales tax at all and inspite of all these, the petitioner is being made to pay huge amount, which according to the petitioner is an illegal demand on account of the arbitrary, illegal and mala fide nature of the action said to have been initiated by the respondents against the petitioner. Against the order of the Sales Tax Officer dated December 1, 1998, the petitioner appears to have filed an appeal before the Additional Excise and Taxation Commissioner, Himachal Pradesh. The assessing authority in the meantime appears to have issued a notice dated January 4, 1999 for the assessment year 1997-98 calling upon the petitioner to pay sales tax in a sum of Rs. 18.50 crores under both the State as well as Central Acts cautioning about coercive action Under Section 14(8) of the State Act, in default thereof. Inspite of the representations made before the appellate authority, it is claimed that the petitioner was directed to make an initial deposit of Rs. 1.50 crores before the appeal filed by the petitioner could be heard on merits. The petitioner appears to have filed appeals before the Financial Commissioner against the orders passed by the appellate authority dated October 3, 1998 and October 6, 1998, which are said to be pending. Even inspite of all these, according to the petitioner, the assessing authority issued another show cause notice dated February 9, 1999 calling upon the petitioner to pay a sum of Rs. 5.50 crores excluding interest and penalty towards the liability of sales tax of the petitioner for the period from April, 1998 to December, 1998. In the meantime, the revisional authority appears to have issued four more notices being revision Nos. 7, 8, 9, 10 under the State as well as Central Act for the years 1992-93 to 1995-96 informing the petitioner that the orders passed by the assessing authority for those periods are neither legal nor proper and calling upon the petitioner to show cause as to why penalty for the assessment years from 1992-93 to 1995-96 equivalent to one and half time of the tax that would have been payable on purchase of materials should not be levied in view of the fact that the petitioner's provisional registration certificate under the Himachal Pradesh General Sales Tax Act expired on June 30, 1995 and regular registration certificate was only obtained on August 11, 1995. On February 8, 1999, the revisional authority was said to have cancelled and annulled the exemption certificate issued in form STE-II with retrospective effect and held that the petitioner was liable to pay both the Central sales tax and General sales tax under the local law in addition to its liability to pay the purchase tax Under Section 5A of the State Act on the limestone extracted by the petitioner. Apprehending that the appellate authority, which is only subordinate to the revisional authority is likely to follow the terms of the order passed by the revisional authority and the remedy of appeal would be merely an empty formality in view of the order of the revisional authority, the petitioners have come up before this Court seeking for the reliefs noticed supra.
C.W.P. No. 52 of 1999 :
11. The petitioner in this writ petition has prayed for the following reliefs :
(a) Issue an appropriate writ, order or direction quashing and/or setting aside the impugned assessment order dated December 1, 1998, issued by the assessing authority and the order dated January 8, 1999 passed by the Additional Excise and Taxation Commissioner-cum-Appellate Authority (SZ) to the petitioner for the assessment year 1997-98 ;
(b) Issue an appropriate writ, order or direction quashing and/or setting aside the orders of the revisional authority dated February 8, 1999 for the assessment years 1995-96 and 1996-97 ;
(c) Issue an appropriate writ, order or direction declaring that the petitioner-company is entitled to full exemption from payment of Central sales tax as well as Himachal Pradesh general sales tax under the exemption notification dated January 30, 1996 for a period of nine years from the date of its commercial production, namely, September 26, 1995 ;
(d) Issue an appropriate writ, order or direction restraining the respondents from realizing the sales tax and purchase tax from September, 1995 till date both under the Central Sales Tax Act, 1956 and Himachal Pradesh General Sales Tax Act, 1968.
12. The very same pleadings, averments and contentions are raised in the other writ petition--C.W.P. No. 51 of 1999.
13. Respondents Nos. 1 to 3, 6 and 4 have filed a common reply contending that Section 42 of the Himachal Pradesh General Sales Tax Act, 1968, which is claimed to be the fountain-head of sales tax incentives by way of reduction of rates or total exemption, pursuant to which notification dated January 30, 1996 was said to have been issued, which though extends all exemption in favour of persons like the petitioner manufacturing cement industry but at the same time, the word 'industry' in legal parlance means any business, trade, undertaking, manufacture or calling with a particular reference to manufacture of goods for sale, such only was envisaged Under Section 42 and, therefore, it does not admit of any 'project' may be a future industry and not actually engaged in the activity of manufacture of goods and effecting sales thereof. While contending that the notification has to be strictly construed subject to the expressed provisions contained therein as also the provisions of Section 42, under which it was issued, no concession can be notified in favour of 'prestigious cement industries' prior to the amended notification dated January 30, 1996, published on February 6, 1996. To satisfy the same as envisaged in para 1-C of the said notification, the concession was restricted or limited to the sale of cement manufactured by an industry, which satisfied the definition of 'prestigious cement industrial unit' and, therefore, to satisfy the said definition, it must first be an 'industrial unit' in existence with the further requirements relating to capital investment and employment of personnel up to a particular number. It is reiterated for these respondents that the concept of 'prestigious cement industrial unit', engrafted in the statutory rules does not envisage the registration of a mere industrial project and that as on the date of registration of an industrial unit as a 'prestigious cement industrial unit' itself, it must be shown to have satisfied the existence of essentials, which alone entitle such a unit to be registered as a 'prestigious cement industrial unit' and not otherwise, and the same has to be meticulously insisted upon in order to prevent abuse of the concession. According to these respondents, the category of 'prestigious unit' introduced from July 31, 1992 and 'prestigious cement unit' introduced from December 1, 1994 are two distinct and separate categories with their origin and incentives and the amendment introduced by the notification dated December 1, 1994, which displaced the erstwhile concept of 'prestigious unit', does not save the action taken under the earlier notification dated July 31, 1992 and, consequently, the notification dated December 1, 1994 substantially alter and virtually supersede the instructions contained in notification dated July 31, 1992 relating to 'prestigious units' and, therefore, compliance with the provisions of Rule 22.2.1 as also the provisions of the Himachal Pradesh General Sales Tax Act, 1968 and Central Sales Tax Act, 1956 became inevitable and compulsory. Further, according to these respondents, the claim of the petitioners to have been registered as 'prestigious cement industrial unit' in terms of annexure VI to the Incentive Rules is factually wrong, inasmuch as the certificate dated January 13, 1993 merely recorded the agreement of the committee, on principle, to accord prestigious status to the proposed unit of the petitioners and the same cannot be construed as a registration of a 'prestigious unit', particularly in view of the fact that no such unit within the meaning of 'prestigious unit', as defined in Clause (rrr) of the notification dated July 31, 1992, actually existed or was actually located in the State of Himachal Pradesh and commenced production after April 1, 1991 as obligated Under Rule 2.1. (q) contained in annexure II. It is also contended that with the exclusion of cement industrial units from the purview of 'prestigious units' by the amendment notification dated December 1, 1994, the certificate dated January 13, 1993 became ineffective because cement industrial units were no longer to be 'prestigious units' by virtue of exclusion of such units from the definition of 'prestigious units'. Even under the Industrial Incentive Rules, the 'industrial units' and the 'projects thereof' are not identical though before its registration by the empowered committee as a 'prestigious unit' one such in fact should exist. The petitioner, according to these respondents, was not at all an 'industrial unit' up to September 26, 1995 prior to which the proposal of the petitioner being a mere project report on papers simpliciter, the certificate dated January 13, 1993 stood rendered null and void and became incapable of being effective for the purpose of sales tax incentives notified under the provisions of the Himachal Pradesh General Sales Tax Act, 1968.
14. These respondents further contend that for obtaining a certificate in form STE-II for the years 1995-96 (February 6, 1996 to March 31, 1996), 1996-97 and 1997-98 from the assessing authority, the petitioners merely placed reliance upon the certificates issued in form STE-III dated February 15, 1996 and April 12, 1996, which in turn only based their claim on registration certificate dated February 2, 1996 and, therefore, the claim of the petitioners to be registered as 'prestigious cement industrial unit' at any time prior to February 2. 1996 is not only contrary to the facts on record, but baseless and unfounded. The petitioners, according to these respondents, were obliged not only to strictly comply with the requirements of law but they must establish that they have strictly complied with all the requirements of law to entitle them to claim for the exemption from sales tax under the local as well as Central Sales Tax Acts and the notifications issued thereunder, they being statutory notifications occupying the field to the exclusion of any executive provisions and instructions to the contrary. Adverting to para 2 of the Incentive Rules and para 1-C(2) of the exemption notification, it is contended that the petitioners committed gross violation of the provisions of law on account of claiming for the year 1995-98 concessional rate of Central sales tax without producing the certificate in form RM-II and transferring the cement on consignment basis for more than 10 crores during 1996-97. By way of illustration of further violation on the part of the petitioners, it is also contended that the petitioners contravened the terms of provisional registration certificate issued under the respective Acts incurring liability for levy of penalty in respect of purchases to the tune of Rs. 1.74 crores and odd during the period from 1992-93 to June 30, 1995, that the petitioners failed to furnish 'C' forms contravening thereby Section 8(4) of the Central Sales Tax Act for sales to the tune of Rs 3, 89,31,276, Rs. 44,79,83,948 and Rs. 81,28,16,935 for the years 1995-96, 1996-97 and 1997-98, respectively, that the petitioners also were said to have on account of production of defective 'C' forms in respect of 47 and 8 transactions, respectively, for the years 1995-96 and 1996-97, committed violation of the relevant rules under the Central Act and that the petitioners though purchased limestone and shale during 1995-96, 1996-97 and 1997-98 sent outside the State the cement and clinker manufactured without paying any tax Under Section 5-A of the Himachal Pradesh General Sales Tax Act, 1968, on the valuable consideration paid for purchasing limestone and shale, omitted to file any return in form S.T. IX under the relevant rules and consequently, the violation committed in this regard disabled and disentitled to claim any concession of exemption for sales tax. An objection is also raised by these respondents on the ground of failure on the part of the petitioners to avail the alternative remedy of revision available Under Section 31(3) of the Himachal Pradesh General Sales Tax Act, 1968 to the Financial Commissioner and it is contended that the extraordinary remedy of writ jurisdiction under Articles 226 and 227 of the Constitution of India is not available for remedying the findings of fact arrived at by the competent assessing and revisional authorities. The findings of fact said to have been recorded by the competent authorities relating to the satisfaction of eligible criteria to claim the 'prestigious cement industrial unit' or about the violation and non-compliance with the provisions of the Himachal Pradesh General Sales Tax Act, 1968 and the Central Sales Tax Act, 1956, are said to be factual findings not amenable to the jurisdiction of this Court under Articles 226 and 227 of the Constitution of India.
15. These respondents also contend that the assessing authority and revisional authority in passing the impugned orders have correctly interpreted the relevant provisions of law and relevant notifications and the petitioners' industry is squarely outside and absolutely not entitled to the concession of exemption found notified in the notification dated January 30, 1996. The exemption certificate in form STE-II is said to be mere nullity in the eye of law inasmuch as the petitioners' industry itself was registered by the empowered committee by the registration certificate dated February 2, 1996. While strongly disputing and denying the allegations of ulterior and extraneous consideration being responsible for passing of the impugned orders, it is contended that the impugned orders have been passed strictly in accordance with law and in public interest and overall interest of Government revenue. According to these respondents, since prior to September 26, 1995 there was no 'industrial unit' in existence and, therefore, even within the meaning of 'prestigious unit' as defined in Clause (2)(rrr) of the notification dated July 31, 1992, the eligibility claim of the petitioners' unit could not have been considered prior to September 26, 1995, Adverting to the terms of the certificate dated January 13, 1993, it is contended that in substance what was accorded registration certificate was of the proposed unit of the petitioners and the same cannot be construed to mean the registration of a 'prestigious unit', which existed as a fact or located in Himachal Pradesh and commenced commercial production after April 1, 1991. Adverting to the notification dated December 1, 1994, it is reiterated that the registration certificate dated January 13, 1993 stood rendered ineffective, the life of such certificate being co-terminous with the life of the parent rule under which the definition of 'prestigious unit' was introduced on July 31, 1992, which subsequently stood amended, whereby the 'units manufacturing cement' stood also excluded from the definition of 'prestigious units'. The letters dated January 28, 1995 and June 30, 1995 being merely extensions of certificate of the proposed 'prestigious unit' were said to be legally meaningless. Placing reliance upon the notification dated December 1, 1994, it is contended that the said rule requires to be strictly complied with by the petitioners and in the absence of which no registration certificate as 'prestigious cement unit' either was or could be obtained up to February 2, 1996 and it is all the more so since the petitioners did not make any application at any time for registration as 'prestigious cement unit' in compliance with the notification dated December 1, 1994, the notification dated December 1, 1994 is said to relate to pioneer industries, new small-scale industries and prestigious industry excluding cement industry and, therefore, did not enure any benefit to the petitioners in any manner. The amendment notification dated March 27, 1995, which amended the notification dated December 31, 1994 is said to be of no relevance in respect of the 'prestigious cement unit'. Relying upon the Incentive Rules and the stipulation contained therein that those Rules do not create any claim against Himachal Pradesh Government enforceable in any court of law, it is contended that the concessions of sales tax are regulated by duly enacted laws and statutory notifications issued, to occupy the field of exemption and, therefore, no rights as such can be based on the administrative/executive Incentive Rules alone. Adverting to the certificate in form STE-III, it is contended that it is nothing but a re-statement of facts as 'prestigious cement unit' with the empowered committee on February 2, 1996 instead of a registration between May 1, 1992 and March 31, 1995 as required under the statutory notification and it is further contended that the prescribed authority was not entitled to grant exemption certificate in form STE-II contrary to the registration certificate dated February 2, 1996 and, therefore, the vital mistakes committed on essential facts disentitle the petitioners to any benefit as claimed by them. Adverting to the change in the Government and the ulterior motives attributed to the authorities in respect of the action taken against the petitioners, it is contended that the order dated May 27, 1997 passed by the assessing authority for the year 1995-96, was said to have been sent to the revisional authority on May 29, 1997 and the same was said to have been scrutinised by the office for ascertaining its correctness on facts and law both under the State as well as Central Acts and that the record was examined and before issuing the revisional notices, a notice dated April 25, 1998 was said to have been issued Under Section 34 of the State Act to the petitioner for production of the listed documents and tender statements on oath, though on April 29, 1998 after hearing the petitioners' notices came to be issued pointing out the illegalities and improprieties. The principle of audi alteram partem was said to have been strictly complied with. It is also contended that the liability to pay sales tax in question is not dependent upon the actual collection of the same from the customers and, consequently, the liability subsists independent of actual collection and that the same cannot be avoided because earlier the exemption has been wrongly and illegally granted by the lower authorities, which illegality came to be set right subsequently by the competent authorities exercising powers under the respective enactments. While traversing the challenge to the jurisdiction of the revisional authority to interfere with the certificate of registration issued in forms STE-II and III, it is contended that the notification dated January 30, 1996 does not create a law over and above the statutory provisions contained in Section 31 of the Himachal Pradesh General Sales Tax Act, 1968 and the Central Sales Tax Act, 1956 and, therefore, the procedure and powers of revisional action is available under the main Act itself.
16. Adverting to the writ petition earlier filed in C.W.P. No. 382 of 1995 and the reply said to have been made therein by the State, and that till the payment of royalty is made the extracted minerals remain the property of the State and as such liable to sales tax under the Himachal Pradesh General Sales Tax Act, 1968, it is contended for these respondents in this proceedings that the revisional authority has not diverged from this position and the net result of the same would be that the minerals are sold to the petitioners for valuable consideration in the shape of royalty involving a transaction of sale by the Government and purchase by the petitioners. The payment of royalty or dead rent is said not to detract from being called valuable consideration for the transfer of property in limestone or shale. Relying upon Section 5-A of the Himachal Pradesh General Sales Tax Act, it is contended that the petitioner being a dealer liable to pay the tax under the Act and having purchased limestone and shale during 1996-97 of the value of Rs. 21,63,41,738 the petitioners became liable to pay tax on the purchases, they having manufactured cement and clinker out of the goods purchased and disposed of the manufactured goods worth Rs. 88,21,56,299 otherwise than by way of sale in the inter-State trade and commerce. Adverting to C.W.P. No. 382 of 1995, it is contended that there had been no violation of the orders of this Court granting stay, particularly, in view of the fact that there had been no determination of the purchase tax Under Section 5-A and the revisional authority had remitted the proceeding to the assessing authority before whom it is said to be pending still. These respondents also reiterate that every registered dealer is obliged to furnish 'C' forms relating to the transactions and non-submission of 'C' forms strikes at the root of the concession of exemption in view of the stipulation contained in para 1-C(2)(v) of the notification dated January 30, 1996.
17. Respondents Nos. 4, 5 and 7 have also filed a separate reply contending that the Incentive Rules do not confer any rights enforceable in any court of law, that the registration certificate dated February 2, 1996 itself belies the claim of sales tax exemption of the petitioners. These respondents admit the claim of the petitioners that their unit commenced commercial production on September 26, 1995 and made an investment of Rs. 391 crores and provided employment to 353 persons at the time of coming into commercial production, at the same time denying that the petitioners' unit is entitled to sales tax exemption from the date of commencement of production inasmuch as by virtue of notifications dated December 1, 1994 and July 6, 1995, there is no specific stipulations in these notifications that the period of sales tax exemption shall be from the date of commercial production. It is also stated that though the petitioners' unit was registered initially as a 'prestigious unit' subject to certain conditions as intimated to them by letter dated January 13, 1993 in terms of notification dated July 31, 1992, but the grant of status as 'prestigious cement unit' was decided by the empowered committee only in its meeting held on January 23, 1996 communicated vide their letter dated February 2, 1996 and that at any rate the concept of 'prestigious unit' and 'prestigious cement unit' are two different types of units. While adverting to the notification dated December 1, 1994, it is contended that in order to be eligible for the grant of status of 'prestigious cement unit', the unit concerned should be registered with the empowered committee between the period May 1, 1992 and March 31, 1995.
18. The petitioners have filed separate rejoinders to the different replies filed on behalf of the respondents reiterating the stand taken in the main writ petition and asserting their entitlement to the exemption as also their right to enforce them in the court of law. The petitioners specifically assert that their unit was not a mere 'project' or a 'future industry' when it was registered. According to the petitioners, the notification dated January 30, 1996 merely stipulates that the unit should go into commercial production after May 1, 1992, without fixing any outer-limit in respect of starting commercial production and that in any event the said notification also dealt with and covered the proposed industries also. In the teeth of the registration certificate dated January 13, 1993, it is contended that on fulfilling the conditions stipulated therein, the petitioners would get the benefit of exemption notification and that the registration would relate to the prior date and the petitioners also contend that if the stand now taken for the respondents have to be countenanced the very object underlying Section 42 of the Himachal Pradesh General Sales Tax Act would stand defeated and it would run counter to the intent and spirit of the said section. It is also contended that the concept of registration of a 'project' is not foreign to the Himachal Pradesh General Sales Tax Act in view of the provisions contained in Section 10 of the Act, which recognised the said concept and provided for registration of the 'unit' even where there is an intention to establish a business--manufacturing or industrial unit. According to the petitioners, the intention to establish is apparent firstly by IPARA registration, thereafter by getting the unit registered both under the Himachal Pradesh General Sales Tax Act and Central Sales Tax Act on February 14, 1992 and taking further steps in this regard, and that the petitioners became registered dealer under both the Acts from February 14, 1992 and complied with the requirements of the notifications. Reliance is also placed on Clause (xix) of the notification dated September 25, 1992, which defines 'unit' as an 'industrial unit', which is registered as a dealer under the Act and by virtue of registration of the petitioners as a dealer under the Act on February 14, 1992, automatically it became an 'industrial unit'. Strong reliance is also placed for the petitioners on the fact that the Government has specifically ordered exemption in favour of the petitioners and another named industry to assert that they have acquired a legal right and the same is binding on the sales tax authorities who cannot challenge the legality specially when all the requirements in the exemption certificate have been complied with. Adverting to the stand taken for the respondents about the so-called distinction between 'prestigious unit' and 'prestigious cement unit', it is said to be a mere red herring since the ingredients to be satisfied for both the concepts are same and identical. It is also contended for the petitioners that the decision taken by the empowered committee cannot be questioned by the respondents when the same was accepted by the concerned parties including the respondents. It is contended, therefore, that by their conduct the respondents are estopped from pleading to the contrary and that in any event the rule of fairness also disentitles the respondents, who are public bodies and precludes the Government departments from reopening such matters, which were taken to be settled due to its actions. As long as the Incentive Rules and exemption certificates are in force, according to the petitioners, they cannot be denied the benefit of the same on flimsy and arbitrary grounds and these notifications and Incentive Rules cannot be treated as mere 'ropes of sand'. Reliance is placed on the principle of 'promissory estoppel' and the doctrine of 'legitimate expectation' as entitling the petitioners to the benefit of the exemption and precluding the respondents from denying such rights or depriving the petitioners of their legitimate rights. These writ petitions are said to be maintainable since they involve proper interpretation of the exemption scheme as also statutory notification according exemption and that the decisions of this Court as also the apex Court justify the petitioners' having recourse to this Court for the reliefs. It is also asserted for the petitioners that the claim of the respondents that the petitioners must be registered as a 'prestigious cement unit' with the empowered committee is fallacious and belied by the terms of the notification dated January 30, 1996 as per which what was required is only registration with the empowered committee and not registration as 'prestigious cement unit' since the notification dated January 30, 1996 relates to the period between May 1, 1992 and November 30, 1994 when no concept of 'prestigious cement unit' really existed. According to the petitioners, in the teeth of the certificates by the empowered committee, the petitioners were eligible for incentives and exemptions on the basis of their application dated September 26, 1995 and the factum of registration with the empowered committee on January 13, 1993, which was never disputed by any of the members of the empowered committee, the respondents are not entitled to, at this stage, approbate and reprobate by going behind the various decisions of the empowered committee. The petitioners also pointed out that the stand now taken in the reply filed by the respondents is contrary to the very action taken by the respondents themselves as would be apparent from the minutes of the first and sixth meeting of the empowered committee held on November 25, 1992 and January 23, 1996. It is also contended that the certificate dated February 2, 1996 is only a formal declaration of the decision already taken by the empowered committee on January 23, 1996 and as a matter of fact respondents Nos. 2, 3 and 4 being members of the empowered committee, which dealt with the claim of exemption made by the petitioners, they were estopped from either going behind the same or taking a different stand at this stage. The claim of exemption, which was earlier promised by the State Government is being denied on unsustainable grounds as mentioned in the impugned orders of the assessing and revisional authorities and, that, therefore, there are no merits, whatsoever, in the objection taken in the replies to the claim of the petitioners.
19. As for the alleged violation said to have been committed by the petitioners, which, according to the respondents, disentitled the petitioners to the benefit of exemption, it is contended for the petitioners that the alleged violations are merely surmises and that the submissions of defective 'C' forms and non-submission of 'C' forms cannot be held to be a violation and if at all it may go only to deprive and deny the petitioners or any dealer of the benefit of concessional rates, that the claim of respondents in the present writ petitions is directly contrary to the specific stand taken in C.W.P. No. 382 of 1995 wherein it has been contended for the respondents that the petitioner is amenable to sales tax and not purchase tax and as long as the dispute in respect of this is pending in this Court, the same cannot be relied upon as a ground to condemn the petitioners and consequently, no violation of Section 5-A can be attributed to the petitioners. It is also contended that the remedy available before the Financial Commissioner is neither an effective alternative remedy nor the appeal to the Commissioner could be of any avail in the teeth of the hierarchy of officers acting against the petitioners. The writ petition is said to involve substantial questions of different laws, and that the same having been admitted cannot be insisted upon to be dismissed at this stage. In other respects, also the rejoinders filed have meticulously traversed every one objections raised by the respondents on merits of the contentions raised by the petitioners in their writ petitions and reiterated the stand in support of their claim and assertion of their right of exemption from sales tax claimed and earlier accorded to them.
20. Shri Shanti Bhushan, learned Senior Counsel spearheaded the challenge to the impugned action and proceedings of the respondents, followed by Dr. A.M. Singhvi, Senior Advocate, Dr. A.M. Singhvi, Senior Advocate and Mr. Bharatji Aggarwal, Senior Advocate, whereas Shri Rajiv Nayyar, learned Senior Advocate defended the action and impugned orders passed by the respondents.
21, Shri Shanti Bhushan, learned Senior Counsel contended that the respondents have not properly appreciated the principles, purport, purpose and object underlying the scheme devised to grant various incentives to attract entrepreneurs to locate industries in the backward areas to augment industrialisation not only to improve the economy of the State but also provide more employment opportunities in the State and the venture undertaken by the respondents as also the stand taken in these proceedings are ill-founded and fallacious. The scheme according to the learned Senior Counsel envisages three stages, viz. (a) registration as prestigious unit, (b) grant of the status as such on fulfilling the eligibility criteria and (c) the accord/availing of the entitlement of exemption and other incentives and that the petitioner-unit satisfied all these criteria meticulously and only on being convinced of the fulfilment of the criteria the various authorities granted the required registration, conferment of status and exemptions from time to time at the appropriate stage and no illegality or infirmity vitiated those orders/certificates, to warrant their revocation/cancellation and setting aside the same to deprive the petitioners of the benefit of the incentives. The learned Senior Counsel also emphasised the need not to mix registration certificate and eligibility certificate together, and that before registration there need be no existence of an operational industry, functional in all respects. The registration certificate dated January 13, 1993 was said to have been validly issued by according approval of the project as such, and the same not having been questioned or challenged by any one and instead having been extended twice by the competent authority, became unassailable. While contending that the condition stipulated in the exemption notification is merely that a new cement industrial unit should be registered by the empowered committee between May 1, 1992 and March 31, 1995, and not that it should be registered as either a prestigious unit or a prestigious cement unit, the learned Senior Counsel also reiterated that the criteria, procedure, etc., being the same the registration of a unit as a prestigious unit automatically rendered the registration to be a registration as the prestigious cement unit without undertaking an unnecessary and futile exercise of getting a registration once over again as prestigious cement unit and became entitled to claim the benefit of exemption as prestigious cement unit. Attacking the stand taken for the respondents that the petitioners have not complied with the provisions of the Sales Tax Acts and committed violation in not paying the purchase tax on the minerals acquired by them, the learned Senior Counsel contended that there was no statutory liability cast upon the petitioners to pay any purchase tax as alleged and that the exploitation of minerals under mining leases granted in their favour and the payment of royalty for the minerals excavated cannot be said to constitute, in law, any sale/purchase of the minerals to attract any liability to pay sales tax under the General Sales Tax Act. Such a reason could not have been, accordingly urged even in the teeth of the pendency of C.W.P. No. 382 of 1995 and the grant of interim orders in C.M.P. No. 752 of 1995, which are still in force and binding on the authorities. As for the alleged violation of the provisions of the Central Sales Tax Act in not filing or filing defective and incomplete C forms, it is contended for the petitioners that in a case where there is total exemption, the necessity for filing C forms did not arise and that in any event, if at all the alleged lapse may result in denying the assessee only the concessional rate of taxation for the items of sales concerned and the same cannot be dubbed as any violation or contravention of the provisions of the sales tax law concerned to disentitle the petitioners for the exemption granted under the notification. It has been urged finally that something unusual which does not meet the eye has happened in this case to victimise the petitioners and that the respondents seem to have proceeded in the matter with a prejudged mind and predetermination to disentitle the petitioners of the benefits of the exemption--to which they are legitimately entitled, particularly when the respondents could not even this date either allege or substantiate that the petitioners do not satisfy the criteria relating to the capital investment or the employment on permanent basis of the required number of labour. Argued the learned Senior Counsel further that the respondents are not only estopped from going behind and taking different and conflicting stands that the revisional authority is not entitled to either go into the legality or correctness of the registration and that the exemption granted to the petitioners by the State Government cannot be denied to them by the action or any proceedings or orders passed by the revisional or other authorities inferior in hierarchy and subordinate to the State Government.
22. Shri Nayyar, learned Senior Counsel contended for the respondents that the impugned action as also the orders passed after giving the petitioners due opportunity to show cause against the same are not only quite in accordance with law but also well within the powers of the revisional and appellate as well as the assessing authorities and that the challenge made thereto do not merit our acceptance. According to the learned Senior Counsel for the respondents, the Industries Department as well as the empowered committee wholly misconstrued the relevant notifications in question and erroneously granted registration to merely a project on paper, which is merely a blue print only, even in the absence of proper proof of investment of capital and the engagement of the required number of labour force and whatever may be the justification or need for postponing and extending the time for commencing production/ commercial production, there is no justification to link the factum of commercial production with the compliance required to be made in the matter of capital investment, etc. It was further contended that at any rate the registration certificate dated January 13, 1993 grants only prestigious status and not the status of prestigious cement unit and in the absence of the petitioners making appropriate application for which purpose the amended rules in 1994 gave four months, there is no scope for claiming to have obtained that status and if at all it is only on and from the grant of the registration certificate to the petitioners, as a prestigious cement unit, on the application made for the purpose by the petitioners, on February 2, 1996, the petitioners could claim for such status and the said date being beyond the outer-limit prescribed in the eligibility criteria--the respondents particularly the revisional authority rightly held the petitioners to be not entitled to avail of the exemption and incentives and consequently the orders demanding the payment of tax with interest and penalty are quite in order and unassailable. In this connection, it has also been argued for the respondents that the registration certificate dated January 13, 1993 outlived its utility and purpose after the notification dated December 1, 1994, which excluded cement units from the definition of prestigious units and in the absence of any registration obtained as prestigious cement unit by making due application under the amended rules, before March 31, 1995 the petitioners cannot claim legitimately to satisfy the eligibility norms to avail of the incentives in question. It is also contended for the petitioners that the competent authorities must have enquired into the matter and specifically found out about the satisfaction of the criteria relating to investment and employment of labour before the issue of the certificate and inasmuch as no such enquiry and satisfaction seems to have been made or recorded in the case on hand, the revisional authority was well within its powers in revoking/ cancelling the certificate for non-compliance with a mandatory requirement of Rule 22 which, it is stated to be, a condition precedent for the very grant of the certificate. The mere mechanical grant of the certificate simply on the basis of the registration certificate rendered it a nullity and void and there could not have been any valid extension/renewal of what was initially a nullity or a void one. While emphasising the fact that the amended rules issued in 1994 did not specifically deem the certificate earlier granted for prestigious unit to be one either under the amended rules or equivalent to the one required to be obtained under the notification dated December 1, 1994 as prestigious cement unit, the certificate obtained on February 2, 1996 is said not to ensure to the benefit of the petitioner to obtain/avail of the incentives under the notification in question, and, therefore, their own failure to apply and obtain registration after December 1, 1994 as prestigious cement unit disentitled them to claim any exemption or avail of any incentives. On the above premise, it is contended that neither the petitioners can be held entitled to the benefits of the statutory notifications issued under the General Sales Tax and Central Sales Tax Acts, nor could they claim any legally enforceable rights under the non-statutory notifications issued by the Industries Department providing for incentives which itself according to the respondents make it clear that they do not create any claim against the Himachal Pradesh Government, enforceable in any court of law. It is also urged for the respondents that to avail of exemption under the notification dated January 30, 1996, the petitioners are obliged to satisfy the conditions subject to which only the exemption has been allowed and it cannot be claimed to be an untrammelled and unrestricted one. Compliance with the requirement and satisfaction of the definition in Rule 2(rrrr) is said to be essential and necessary and the need to obtain or be accorded with the registration or status as prestigious cement unit cannot be considered to be a mere empty formality. To claim an exemption, it was submitted that one must show that the claim is strictly within the four corners of the notification and otherwise the claim has to fail. While adverting to the allegation about contravention of the provisions of the Sales Tax Acts--State and Central, in the matter of non-payment of purchase tax and the non-production of proper and valid C forms, the learned Senior Counsel for the respondents reiterated the correctness of the stand taken by the revisional authority and the respondents, which according to the learned Senior Counsel are fully supported by the ratio of the decisions relied upon by the revisional authority, by inviting our attention also to those decisions. The petitioners also were said to have committed a serious lapse in not exercising its option to avail of either of the deferment or exemption incentive within 90 days, i.e., before November 10, 1995, the date of commencement of production being August 11, 1995 and that, therefore, the option said to have been exercised on December 19, 1995 is stated to be not in conformity with the requirements of the notification dated July 6, 1995. The date of commencement of production and not the date of commence-ment of commercial production is said to be relevant for calculating the period of 90 days for exercising the option. For the respondents, it was also submitted that the files have been submitted as early as on May 29, 1997 for the consideration of the Commissioner and that the course of action adopted thereafter was just and in the normal course and nothing untoward has happened in these cases. The plea of failure to avail of the other alternative remedies as disentitling the petitioner to invoke the extraordinary jurisdiction under Article 226 of the Constitution of India was also urged. It was also contended that the satisfaction as well as the compliance or non-compliance with the requirements were said to depend upon factual issues and that since those factual issues came to be decided after giving due opportunity to the petitioners on an appreciation of the materials on record the same is said to be not capable of being challenged in these proceedings and the writ petitions are, therefore, liable to be dismissed. Placing reliance upon an unreported decision of this Court in C.W.P. No. 220 of 1999 dated July 7, 1999, it was contended that the petitioners had no enforceable rights in law and the writ petitions are liable to be dismissed.
23. (a) It is necessary and desirable to advert to the rules relating to the grant of incentives to industrial units/establishments and the various developments and revisions in the same from time to time as also the statutory exemptions granted therefor, before actually considering the contentions raised on behalf of both the parties in these proceedings. The industries department of the Government, in supersession of the earlier orders in force issued by the notification dated March 27, 1991 what is called, the Revised Rules regarding grant of incentives to industrial units in Himachal Pradesh, 1991, hereinafter called 'the 1991 Rules', with effect from April 1, 1991, which is also said to be the appointed day for the purpose of those Rules. As for the eligibility Rule 1.2, provided that new industrial units and new small-scale service establishments, as defined in the Rules, shall be eligible for grant of incentives and that existing units will be eligible for grant of all new incentives under the Rules, subject to the condition that they shall continue to be governed by the Revised Rules regarding grant of incentives to new and already established industrial units in Himachal Pradesh, 1984, in respect of all incentives covered under those Rules. It was also specified, that since all incentives under those Rules are provided under the discretionary powers of the State Government, they do not create any claim against Himachal Pradesh, Government enforceable in any court of law. Rule 2-1(q) defined 'new industrial unit' to mean an industrial unit located within the Himachal Pradesh which commences production on or after April 1, 1991 (the appointed day) and include also existing unit which is eligible to get fresh registration as per the guidelines provided by the Development Commissioner, Small-Scale Industries, Government of India, from time to time but shall not include any industrial unit, small or medium or large, when it is formed only as a result of re-establishment, mere change of ownership, changes in the constitution, re-constitution of revival of an existing unit. Among several incentives, power concessions and sales tax incentives, are a few to be noticed. So far as sales tax incentives with which we are concerned, Rule 11.1, provided for sales tax deferment scheme, stipulating that except for industries notified in annexure II to the Rules or as notified from time to time by the State Government a new industrial unit, which is 'registered as a dealer under the Himachal Pradesh General Sales Tax Act, 1968/Central Sales Tax Act, 1956', and comply with its provisions was rendered eligible to the various types of sales tax incentives, but only on the sale of the goods manufactured by such units. Under the said sales tax deferment scheme, a unit is entitled to collect sales tax at normal rates against sales effected during the period of concession entitlement (for A, B and C categories of industrial blocks for 9, 7 and 6 years, respectively) and deposit the same by way of repayment of the amount collected for the year ending I from the date of production onwards from the years IV onwards, respectively for successive years. The rules carried a limit also in this regard, which may not be necessary to be noticed now. Rule 11.4 provided that industrial units manufacturing items listed in annexure IV, which included 'cement' will be charged at the rate of 1 per cent Central sales tax initially for a period of one year from the appointed date provided that they do not transfer goods outside the State of Himachal Pradesh either on consignment basis or on branch transfer basis.
(b) By a notification dated July 31, 1992, the Government in the Industries Department issued amendments to the 1991 Rules, hereinafter referred to as 'The Revised Amendment Rules, 1992', which among other things introduced the concept of 'prestigious unit' by defining the same in Rule 2(rrr) to mean any new industrial unit, which goes into commercial production in the State on or after May 1, 1992, and is registered with the empowered committee in para 1 of Rule 24 between May 1, 1992 and March 31, 1993 and that such unit shall have a fixed capital investment of at least Rs. 50 crores and shall employ at least 200 persons on regular basis. As part of the amendments not only Rule 22 was amended but Rules 22 to 25 were newly added and erstwhile Rule 22 was renumbered as Rule 26. New Rule 22.1, stipulated the eligibility criteria for the grant of prestigious unit status, according to which any unit in order to be eligible for being classified as such and avail of incentives and facilities will be subject to the condition that the unit concerned shall have (a) fixed capital investment of Rs. 50 crores or more, (i) either based on local raw materials or (ii) carry out value addition of 50 per cent or more or (iii) they undertake to export outside the country 50 per cent or more of its production or (iv) in the opinion of the empowered committee, as defined in the Rules, deserves to be considered as prestigious unit, (b) that the unit shall employ at least 200 workers on permanent basis and the unit shall follow the provisions for recruitment laid down under the employment policy of the State Government and comply with Rule 24.3, and (c) any unit coming into commercial production in the State on or after May 1, 1992 and registered with the empowered committee as per the prescribed procedure laid down in Rule 22.3, between May 1, 1992 and March 31, 1993 and meeting the eligibility criteria laid down under the said rule will be given prestigious status under the scheme. It has been made clear that existing units in the State having investment of more than 50 crores of rupees will not be counted for grant of prestigious status under the scheme and in respect of such unit if they go for expansion/diversification and if such expansion/diversification itself meets the eligibility criteria of prestigious unit as laid down, such unit will also be considered for availing of the incentives only for the expanded capacity. Prestigious units, which are registered as a dealer under the Himachal Pradesh General Sales Tax Act, 1968/Central Sales Tax Act, 1956 and comply with its provisions can avail of Sales Tax incentive only on the sales of the goods manufactured by these units--in the form of either sales tax exemption/deferment (both Central sales tax + General sales tax) if they are located in the State subject to the condition that in cases of categories of industrial blocks A, B and C, the exemption/deferment will be for 12, 9 and 7 years, respectively, and that the prestigious unit concerned shall have to opt for either sales tax exemption or sales tax deferment within 90 days from the date of commencement of production and such option exercised will be final and the same is also to be governed for administration of the incentive as per Rules 11.2, 11.3 and 11.4 of the Rules. Rule 22.2.3 also provided incentive by way of power tariff freeze, as per which any enhancement of power tariff of such industrial units--A, B and C for 6, 4 and 3 years, respectively and that the amount if any paid as a result of increase after the date of commercial production, but entitled to the benefit of power tariff freeze, will be also reimbursed through the Department of Industries. Rule 24 provided for the procedure for setting up of prestigious/pioneer units and functions of the empowered committee. Rule 24.2 to 24.4, on which much arguments turned requires to be extracted and they are as follows :
'24.2. The eligibility for registration before the empowered committee, as defined in these Rules and its functions will be as per the following parameters/ guideline :
(1) Evaluate the eligibility of the applicant-unit as per the eligibility criterion laid down for the grant of prestigious/pioneer status as the case may be.
(2) Evaluate on merits and as per the criterion laid down the application of eligible units already accorded IPARA approval by the Government or who hold separate valid licence or registration or modification in the existing licence or registration or letter of intent as may be required but have not gone into commercial production.
(3) Evaluate such proposal received from units holding valid licences where industrial licence is required under compulsory license scheme.
(4) Recommend and finalise the grant of eligibility certificate to prestigious/pioneer units.
24.3. Director of Industries while issuing an eligibility certificate to pioneer/prestigious unit will also issue a certificate certifying the numbers of people employed and that such people have been recruited from the bona fide residents of Himachal Pradesh. Provided that while issuing such certificate, if it is found that a particular category of skilled/unskilled persons is not available from employment exchanges/Central employment cell at a particular point of time, a no objection certificate for recruitment for a specific period of time shall be issued by Director of Industries, in consultation with the Labour Commissioner, Himachal Pradesh.
24.4. The applications in the prescribed forms for setting up of prestigious unit/pioneer units will be made to the Director of Industries, who will then put these up for the consideration of the Industrial Project Approval and Review Authority. After Industrial Project Approval and Review Authority clearance the same application will be considered by the empowered committee. The decision of the empowered committee will be final.
The empowered committee, while according approval for registration, will specify the date by which the unit shall commence commercial production. This will be done on the basis of the proposed detailed implementation schedule submitted along with the application form. Provided that the empowered committee in certain cases where it deems fit and depending upon the merits of each case extend the duration by a reasonable time where at least 80 per cent of the project execution work has already been completed.'
(c) By a further amendment under notification dated December 1, 1994, the Industries Department of the State, the Revised (Amendment II) Rules regarding grant of incentives to industrial units in Himachal Pradesh, 1994, hereinafter called 'Amendment II Rules, 1994', came to be issued, introducing the concept of 'prestigious cement unit', in Clause (rrrr) of Rule 2(1), defining it to mean any new industrial unit, which goes into commercial production in the State on or after May 1, 1992 and is registered with the empowered committee appointed in para 1 of Rule 24, between May 1, 1992 and March 31, 1995 making it obligatory that it shall have a fixed capital investment of at least 50 crores of rupees and employ at least 200 persons on regular basis. The proviso to the same also enabled the existing cement units which go in for expansion/diversification and which itself meets the eligibility criteria to avail of the incentives only for the limited extent of expanded capacity. Rule 27 has been introduced providing for sales tax incentive to prestigious cement units by stipulating that they shall be eligible for sales tax deferment for a period of 12, 9 and 7 years in categories A, B and C blocks, respectively, and that the repayment of the amount of the sales tax shall commence from the fourth year and shall be repaid in one instalment on the due date. Exemption from payment of electricity duty by these prestigious cement units set up in the State also granted for 12, 9 and 7 years in respect of A, B and C industrial blocks, respectively. Since a separate classification of prestigious cement units came to be introduced and annexure IV was also amended, Rule 2(1)(rrr) was also so amended to exclude from out of the definition of prestigious unit, the units manufacturing cement.
(d) A further more amendment to the 1991 Rules came to be issued known as the Revised (Amendment III) Rules regarding grant of incentives to industrial units in Himachal Pradesh, 1995, hereinafter called 'the Amendment III Rules, 1995' amending Rule 27 in respect of incentives to prestigious cement unit, by substituting Rule 27(1) with a new rule, which reads as follows :
'27.1. Sales tax incentives.Sales tax exemption/deferment (both CST and GST) shall be available for a period of 12, 9 and 7 years in categories A, B and C blocks, respectively, to new prestigious cement units, excluding existing cement units which have gone/are going in for expansion and where the expansion itself meets the criterion laid down for prestigious cement units. In case of expansion, of existing cement units eligible for grant of prestigious status of the incentive of sales tax on the expanded capacity as provided above, i.e., exemption/deferment of CST-GST for a period of 12, 9 and 7 years in categories A, B and C blocks, respectively, will be available only if the level and amount of sales tax per annum being paid/paid on the date of commencement of production of the expanded unit by the old unit is maintained and paid every year during the period of eligibility of incentive on expanded capacity.
Now prestigious cement units shall have to opt for either sales tax exemption or deferment within 90 days from the date of commencement of production. Option once exercised shall be final. A prestigious cement unit opting sales tax deferment scheme will be governed by Rule 11.2,11.3, for the purpose of administration of units incentive.'
Rule 27(3) was also added providing for freezing of enhancement of power tariff of prestigious cement units located in A, B and C categories of industrial blocks, for 6, 4 and 3 years period with effect from the date of commencement of commercial production with a formula for calculating the increase in power tariff to be reimbursed.
(e) It is necessary at this stage to advert, for the sake of completeness of the record, to the statutory notifications issued by the State Government both under the Himachal Pradesh General Sales Tax Act, 1968 and the Central Sales Tax Act, 1956, also.
(i) The exemption notification issued under the Himachal Pradesh General Sales Tax Act, 1968 is as follows :
'Sale of goods manufactured by certain industries--Exemption-- Amendment (Himachal Pradesh).
Notification No. EXN-C(9)2/90-IV dated the 30th January, 1996.
In exercise of the powers conferred by Sub-section (1) of Section 42 of the Himachal Pradesh General Sales Tax Act, 1968 (Act No. 24 of 1968), the Governor of Himachal Pradesh is pleased to make the following further amendments in this Department's Notification No. EXN-C(9)2/90 dated December 31, 1994, published in the Rajpatra, Himachal Pradesh (Extraordinary) on December 31, 1994, as amended from time to time (hereinafter called the 'said notification') with immediate effect.
AMENDMENT.1. After the existing para 1-B of the said notification the following new para '1-C' shall be inserted, namely :
'1-C. (1) The Governor of Himachal Pradesh in exercise of the powers conferred by Sub-section (1) of Section 42 of the Himachal Pradesh General Sales Tax Act, 1968 (Act No. 24 of 1968) is pleased to order exemption from tax, subject to their being eligible as per the terms of this para to the following other industries from the payment of tax leviable on the sale of cement manufactured by such 'other industries' as specified in the Table given below and subject to the conditions specified below in sub-para (2) :
Serial number
Name of theindustry
Category of industrial block in which located
Total time-limit within which concession of exemption will be available
1
2
3
4
1.
M/s. Gujrat Ambuja Cements Ltd., Village Suli, P.O. Darlaghat, Tehsil Arki,District Solan (H.P.).'B'
One hundredeight months (9 years).2.
M/s. The Associated Cement Companies Ltd. P.O. Barmana, District Bilaspur (H.P.).
'B'
One hundredeight months (9 years).
(2) The concession of exemption from payment of tax under this Act, shall be admissible to 'other industries' only if
(i) it is a prestigious cement industrial unit ;
(ii) it has been registered as a dealer under the Himachal Pradesh General Sales Tax Act, 1968, for manufacture of cement for sale in the 'new cement industrial unit' ;
(iii) it has obtained a certificate in form S.T.E.-III from the Director of Industries, Himachal Pradesh and has furnished the same to the prescribed authority for the grant of exemption certificate in form S.T.E.-III ;
(iv) it has been granted an exemption certificate in form S.T.E.-II by the prescribed authority ;
(v) it (registered dealer) complies with the provisions of (a) the Himachal Pradesh General Sales Tax Act, 1968, (b) the Central Sales Tax Act, 1956, and (c) the Rules, notifications and orders made and issued under these Acts ;
(vi) the exemption certificate continues to remain operative and it has not been withdrawn or cancelled by the prescribed authority or is not annulled or quashed in any appellate, revisional or other proceedings :
Provided that the exemption contained in sub-para (1) to The Associated Cement Companies Limited, Barmana, District Bilaspur (Himachal Pradesh) shall be granted by the prescribed authority only if, in addition to the preceding conditions,--
(a) the payment of tax under the Himachal Pradesh General Sales Tax Act, 1968, and the Central Sales Tax Act, 1956, in respect of the old component of the The Associated Cement Companies Limited, Barmana, District Bilaspur (Himachal Pradesh) is actually made even during each financial year of the period of exemption in respect of the new component of this unit, established as a result of expansions on the quantity respectively of 5,51,664 metric tonnes and 3,71,028 metric tonnes sold during the year 1991-92 ; and
(b) the level of manufacture of 9,22,692 metric tonnes of cement in the old component of Associated Companies Limited, Barmana, District Bilaspur {Himachal Pradesh) is also maintained unchanged throughout each financial year during the period of exemption in respect of the new component of this unit established as a result of expansion.
(3) Notwithstanding anything contained in sub-paras (1) and (2), no exemption shall be granted by the prescribed authority to such other industry
(i) if it is found that the evasion of tax under the Himachal Pradesh General Sales Tax Act, 1968 or the Central Sales Tax Act, 1956 has been committed by the entrepreneur (registered dealer) ;
(ii) in respect of the sale of finished cement, which has been procured or acquired by it for the sale in Himachal Pradesh ; and
(iii) in respect of the sale of cement which has not been included and duly returned in the return filed Under Section 12(3) of the Himachal Pradesh General Sales Tax Act, 1968.
(4) The provisions contained in paras 5, 7, 8, 9, 11, 12, 13 and 14 of the Himachal Pradesh General Sales Tax (Deferred Payment of Tax) Scheme, 1992 notified vide Government Notification No. 1-12/73-E & T-III dated September 25, 1992 (See [1993] 90 STC 16, published in Rajpatra, Himachal Pradesh (Extraordinary) on October 1, 1992 shall apply mutatis mutandis in relation to (i) mode of availing of benefit of exemption and issue of exemption certificate, (ii) renewal of exemption certificate, (iii) cancellation of exemption certificate in form STE-II, (iv) filing of returns, assessment, etc., (v) registers to be maintained, (vi) condonation of delay, (vii) other powers of the prescribed authority, and (viii) overriding effect of this notification.
(5) The exemption is subject to the further condition that the entrepreneur (registered dealer) shall not charge sales tax on the sale of cement manufactured in the new cement industrial unit during the period of exemption.
Explanation.For the purpose of para 1-C of this notification,
(a) 'other industries' means 'prestigious cement industrial units' ;
(b) 'prestigious cement industrial unit' means a new cement industrial unit which has fixed capital investment of not less than rupees fifty crores, comes into production after the 1st day of May, 1992, is registered by the empowered committee between the 1st day of May, 1992 and the 31st day of March, 1995 and employs on permanent basis not more than two hundred persons ; and
(i) is based on local raw material, or
(ii) carries out value addition of fifty percentum or more, in its manufactured products, or
(iii) undertakes an export commitment of 50 per cent or more of its production, or
(iv) is declared to be prestigious cement unit by the empowered committee headed by the Secretary (Industries) to the Government of Himachal Pradesh ;
and also includes an existing industrial unit which fulfils the above criteria for 'prestigious cement unit' exclusively by virtue of the component of 'expansion' or 'diversification' or 'modernisation' as the case may be ;
(c) the expressions 'diversification', 'expansion', 'modernisation', 'empowered committee' and 'prescribed authority' shall have the same meanings assigned to them in Clauses (iii), (v), (iv) and (xv) respectively of sub-para (1) of para 2 of the Himachal Pradesh General Sales Tax (Deferred Payment of Tax) Scheme, 1992 (See [1993] 90 STC 16).
(d) 'fixed capital investment' means capital investment made of land, building, machinery and plant as verified by the prescribed authority ; and
(e) forms 'STE-I', 'STE-II' and 'STE-III' mean the forms as appended to this notification ; and
(f) unless there is anything repugnant in the subject or context, all words and expressions used herein shall have the meaning assigned to them under the Himachal Pradesh General Sales Tax Act, 1968.'
(ii) The exemption notification issued under the Central Sales Tax Act, 1956 is as follows :
'Inter-State sale of cement by Gujrat Ambuja Limited--Exemption (Himachal Pradesh)
Notification No. EXN C(9)2 /90-lV dated the 30th January, 1996.
Whereas the Governor of Himachal Pradesh is satisfied that it is necessary in public interest so to do ;
Now, therefore, in exercise of the powers conferred by Clause (a) of Sub-section (5) of Section 8 of the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), the Governor of Himachal Pradesh is pleased to direct that no tax under this Act shall be payable by Gujrat Ambuja Limited, Daralaghat, District Solan and new eligible component of Associated Cement Corporation Ltd., Barmana, District Bilaspur in respect of the sale of cement manufactured and sold by them in the course of inter-State trade or commerce, subject to all the terms and conditions as specified in para 1-C of notification No. EXN-C(9)2/90-IV, dated 30th January, 1996 issued Under Section 42 of the Himachal Pradesh General Sales Tax Act, 1968 (Act No. 24 of 1968) with immediate effect.'
24. The plea on behalf of the respondents based upon the decision reported in (H.B. Gandhi, Excise and Taxation Officer-cum-Assessing Authority v. Gopinath & Sons) regarding the failure to exhaust the statutory remedies provided under the Act, constituting an impediment for invoking the writ jurisdiction may be considered, first. The stand taken for the respondents, in this regard is that Under Section 31(3) of the Himachal Pradesh General Sales Tax Act, 1968 the petitioners had the statutory remedy of making an application to the Financial Commissioner against the orders of the revisional authority and this has not been invoked. It is not that every remedy that is provided and not availed of can be said to be an impediment for invoking jurisdiction of this Court under Article 226 of the Constitution of India. The rule of exhaustion of statutory remedies has been always considered to be not only a rule of policy, convenience and discretion than a rule of law, but the alternative must be shown to be an effective and efficacious one. So far as the case on hand is concerned not only substantial questions of law of great importance are involved for determination but the very allegation of the petitioners is that it is at the behest of the Minister incharge of Taxation and Excise such suo motu revisional proceedings have been initiated and that it is not as though the alternative remedy is to approach a judicial or independent Tribunal but only to the Financial Commissioner of the Government. The impugned orders, apart from being said to be illegal and without jurisdiction involve imposition of an illegal levy of substantial sum and, therefore, cannot be considered to be such a disentitling factor to dissuade this Court from exercising its jurisdiction under Article 226 of the Constitution of India. The decision in H.B. Gandhi, Excise and Taxation Officer-cum-Assessing Authority v. Gopinath & Sons was on the peculiar facts and nature of seriously disputed questions of fact involved therein and cannot be said to be the last word on the issue. So far as the cases on hand are concerned, apart from the inefficacy of the remedy Under Section 31(3) on the facts of the case, the cases also do not involve any complicated questions of fact needing any elaborate investigation but merely interpretation of the statutory provisions, notifications and the Rules of the Government providing for incentives. Hence, we overrule this objection also for the reason that it would not be in the interests of justice to non-suit the petitioners at this stage, on this ground.
25. Equally untenable is the objection taken for the respondents that the questions decided and calling for decision are mere questions of fact and, therefore, such questions of fact cannot be re-appreciated and re-determined in proceedings under Article 226 of the Constitution of India. No doubt proceedings of judicial review under Article 226 cannot be converted, as if into an appeal, but where the issue involved is jurisdictional going into the root of the jurisdiction asserted and claimed to be exercised or where it has become necessary, as a matter of law of the relevance of the factors and to see whether such findings of vital and basic facts have been arrived at taking into account irrelevant factors or by ignoring and neglecting relevant factors and that the conclusions arrived at are so manifestly, arbitrary and unreasonable that no reasonable person or authority entrusted with the power to decide could have reasonably or justly and legally could have come to such a conclusion, it should be no anathema for the courts to undertake a review of such a situation or develop an aversion to go into such questions. All the more so, as in this case where there are no seriously disputed or complicated questions of facts and it is not as though they cannot be gone into or be adjudicated in the absence gathering such new facts which would in turn require either evidence to be taken or any investigation into facts have to be undertaken. The cases before us concern merely an interpretation of the statutory notifications as well as the incentive policy declared by the State Government.
26. It is necessary to advert to also the plea of political bias or mala fides and legal malice, strongly projected both in the petitions and also at the time of the preliminary hearing of the writ petitions, when it came up for orders regarding admission. But, at the time of final hearing, Shri Shanti Bhushan, learned Senior Counsel for the petitioners, while stating that it would be sufficient for the petitioners to rest their case squarely on the legal issues alone, and that it was not absolutely necessary to go into the issue relating to political bias or mala fides at length, and further indicated that the facts on record would themselves go to show that something unusual, which does not meet the eye seem to have happened and he would rest content with that stand, for the present. In view of this, the learned Senior Counsel for the respondents also, except pointing out that the order passed on May 27, 1997 was sent with the files to the Commissioner on May 29, 1997 itself has not chosen to deal with these aspects further. Therefore, it has become unnecessary for this Court to go into the question of political bias or mala fides on account of change in the political arena, and such influence operating as a vitiating factor and refrain from expressing any view on the said issue.
27. The learned Senior Counsel for the respondents while placing strong reliance upon the stipulation in Rule 1.2(b) of the Revised 1991 Rules, and an unreported decision of ours rendered on July 7, 1999 in C.W.P. No. 220 of 1999, contended that the rules made by the Industry Department of the Government being mere rules made in exercise of discretionary powers of the State Government, they did not create any claim against the Himachal Pradesh Government enforceable in any court of law. We are afraid, we can countenance such a plea and the unreported decision in C.W.P. No. 220 of 1999 cannot be pressed into service by the respondents, to that extent. The said decision of ours was rendered while rejecting a case at the stage of admission, having regard and relevance to the nature and manner of submissions made in that case basing their claim only on the decision reported in : [1979]118ITR326(SC) (Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh) and the principles of promissory estoppel, and, therefore, it was held therein that there cannot be any estoppel against a statute to defeat the claim by the State of a tax liability. In the light of the submissions now made and the materials brought to our notice, the matter is obliged to be decided objectively and not felt bound by certain observations made in that case in the context of the submissions made alone for the petitioner, therein. In : AIR1999SC303 (State of Bihar v. Suprabhat Steel Ltd.) it has been held that the industrial incentive policy issued by the State Government is binding upon the Government to such extent that even a statutory notification issued to further the policy has to be in conformity with the incentives declared and announced. It is also well-settled that where a new industry shows that it was established on the expectation that it would enjoy the exemption, Government cannot resile from the representation made which has been acted upon by a person to his/ its detriment with the hope of enjoying the benefits announced, and the principle of promissory estoppel, except in the excepted category of eases and situations, would operate to prevent the authorities from going behind their representation and promises and if they propose to do so, even non-statutory guidelines/policy issued by the State can be enforced against the State if (a) the person concerned shows that he has been led to take an action on the basis of the representation and (b) that he satisfied the eligibility criteria laid down for availing the exemption. Therefore, whatever may be the rights/justification for the respondent-State to contend that the petitioners have not satisfied the eligibility criteria and, therefore, not entitled to the exemption claimed, it is not given to the respondents to take the extreme and unreasonable stand that the policy/guidelines, proclaimed by them are not enforceable or that they do not create any rights enforceable in any court of law.
28. The next issue which we consider it appropriate to go into, before undertaking the question as to whether the petitioner fulfilled the necessary eligibility criteria to claim the exemption and whether they were initially accorded the status and recognised to be eligible properly and legally, the general issue as to the nature of interpretation and manner or method of construction that should be adopted and applied in understanding and exploring the scope and purport of the Government orders and the strictness or liberality with which they need be construed, serious arguments having been addressed on this aspect also, by placing reliance upon certain decisions of the apex Court also and it is worth noticing them at this stage itself.
29. In : [1966]2SCR457 (State of Punjab v. Jullundur Vegetables Syndicate), it was held that in interpreting a fiscal statute, the court cannot proceed to make good the deficiencies, if there be any, in the statute and not only it shall interpret the statute as it stands but in case of doubt in a manner favourable to the tax-payer. It was so held also in : [1961]41ITR425(SC) (C.A. Abraham v. Income-tax Officer). But in : AIR1996SC524 (State Level Committee v. Morgard-shammar India Ltd.), & distinction is drawn in the matter of construction of provision granting exemption and in such cases it has been held, observing that it has been repeatedly held by the apex Court that a provision providing for an exemption or an exception has to be construed strictly. Yet another innovation came to be made by their Lordships of the apex Court to meet a different exigencies of situation arising in some of the decisions and particularly the one reported in : [1999]1SCR871 (Commissioner of Sales Tax v. Industrial Coal Enterprises), It was held therein as follows :
'11. In Commissioner of Income-tax, Amritsar v. Strawboard . : [1989]177ITR431(SC) this Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd., Bombay v. Commissioner of Income-tax, Bombay City-III, Bombay : [1992]196ITR188(SC) , it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it, by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision.'
30. All these would go to show that there should always be a reasonable attempt by the courts to analyse the intention or objects underlying a legislation/notification or a policy declaration and guidelines and as far as possible adopt a construction, which would favour the fulfilment of those objects, wherever possible, without doing violence to the scheme underlying or the language employed therein and not be unduly rigid or too technical to undermine or defeat the very purpose of the scheme or public interest, involved in the same.
31. The grievances of the petitioners, which emanate out of the impugned action, in the shape of orders passed by the revisional authority, as also the consequential and related orders passed on the basis of the reasoning of the revisional authority is based upon the reasons and ultimate findings recorded on the following vital issues, assumed for adjudication by the authorities, particularly the revisional authority in this regard : (a) The petitioner-industry is not a prestigious cement industrial unit within the meaning of para 1-C of the statutory notification issued Under Section 42 of the Himachal Pradesh General Sales Tax Act, 1968 and the notification correspondingly issued Under Section 8(5)(a) of the Central Sales Tax Act, 1956, since it does not, according to the respondents, fulfil the eligibility criteria prescribed therefor, and such status came to be recognised and conferred by the competent authority erroneously rendering it liable to be annulled ; (b) that in so far as the petitioner, who was liable to pay purchase tax Under Section 5A of the Act on the limestone and shale said to have been purchased by them from the State, they have violated the provisions of the Himachal Pradesh General Sales Tax Act and thereby rendered themselves disentitled to the concessions, having regard to the specific stipulation contained in the exemption notifications, subject to which only the exemption was allowed ; (c) by committing lapse/irregularity in not furnishing valid and proper C forms as was stated to have been enjoined on them the petitioner was said to have contravened the provisions of the Central Sales Tax Act, 1956 and thereby violated the specific conditions subject to which only the exemption was granted and thereby rendered themselves ineligible for claiming and being granted the exemption under the notifications in question ; (d) that the grant of certificate in form STE-II was also vitiated due to procedural improprieties in not passing separate orders for Himachal Pradesh General Sales Tax Act and Central Sales Tax Act and also due to the omission said to have been committed by the competent authority in not holding due and proper enquiry, said to be obligatory for a quasi-judicial authority, as also alleged failure to positively determine about the entitlement of the petitioner for the certificate in form STE-II being granted in their favour. Detailed submissions on merits made by the counsel appearing on either side were in elaboration of these grounds assigned for the respondents, in support of their action. For the sake of easy and effective consideration, it would be convenient if (b) and (c) above are taken up together as it would be also to take up (a) and (d) together.
32. So far as the alleged violation of the Himachal Pradesh General Sales Tax Act, 1968 and the Central Sales Tax Act, 1956 and the Rules as well as notifications issued thereunder are concerned, the alleged violation on account of failure to pay the purchase tax said to be due from the petitioner to the State Under Section 5A of the Himachal Pradesh General Sales Tax Act may be taken up for consideration, in the first instance. The common condition, the alleged violation of which is relied upon, for disabling the petitioner from being granted the exemption, contained in the notification dated January 30, 1996 so far as it is relevant for our purpose reads as follows :
'1-C. (2) The concession of exemption from payment of tax under this Act, shall be admissible to 'other industries' only if.............
(v) it (registered dealer) complies with the provisions of (a) the Himachal Pradesh General Sales Tax Act, 1968, (b) the Central Sales Tax Act, 1956, and (c) the rules, notifications and orders made and issued under these Acts ;..............
(3) Notwithstanding anything contained in sub-paras (1) and (2), no exemption shall be granted by the prescribed authority to such other industry
(i) if it is found that the evasion of tax under the Himachal Pradesh General Sales Tax Act, 1968 or the Central Sales Tax Act, 1956, has been committed by the entrepreneur (registered dealer).'
33. The stand taken for the petitioner is that there is no purchase or sale of the minerals, involved in exploitation of mineral under a mining lease granted under form K under the provisions of the Mines and Minerals (Regulating and Development) Act, 1957 and the rules made thereunder and consequently no liability is attracted against the petitioner in this regard which it could be said to have violated so as to be indicted for the contravention of the conditions noticed, supra or of non-compliance with the provisions of the General Sales Tax Act, Rules and notifications, either. In this connection, the revisional authority as also the learned Senior Counsel for the respondents, at the time of arguments placed strong reliance upon the decision of the apex Court reported in : [1977]2SCR149 (State of Madhya Pradesh v. Orient Paper Mills Ltd.). It was also contended for the respondents that this decision was also approved and followed by the Supreme Court in the decision reported in [1996] 103 STC 477 (Cooch Behar Contractors' Association v. State of West Bengal).
34. Equally, strong reliance has been placed for the petitioners on the decisions reported in : [1985]3SCR26 (State of Orissa v. Titaghur Paper Mills Co. Ltd.) and [1985] 58 STC 223 (Associated Cement Company Ltd. v. Government of Andhra Pradesh), a Division Bench judgment of the Andhra Pradesh High Court, and (Raja Bahadur Kamakshya Narain Singh v. Commissioner of Income-tax, Bihar and Orissa). The Privy Council had an occasion to deal with the nature and character of royalty for the purposes of the Income-tax Act, 1922 in (Raja Bahadur Kamakshya Narain Singh v. Commissioner of Income-tax, Bihar and Orissa). Adverting to mining rent or royalties, it was observed that those are periodical payments to be made by the lessee under his covenants in consideration of the benefits which he is granted by the lessor and having regard to the multifarious rights and benefits conferred therefor, it would be fallacious to envisage royalty to be a mere price of the actual tons of coal, though tonnage royalty is payable when coal/coke is gotten and despatched. It was also noticed therein that as preliminary and ancillary to that culminating act, liberties are also granted to the lessee to enter on the land and form railways, roads, search, to dig and sink pits, to erect engines and machinery, etc., and consequently royalty was held in substance to be a rent only, it being a compensation which the occupier pays the landlord for that species of occupation which the contract between them allows. In Associated Cement Company Ltd. v. Government of Andhra Pradesh [1985] 58 STC 223, Jeevan Reddy, J., as the learned Judge then was, speaking for a Division Bench of the Andhra Pradesh High Court, exhaustively analysed this issue, with particular reference to an identical lease for the very same kind of material in respect of a dispute raised by another cement company, reviewing the catena of case law on the subject including the decision reported in : [1977]2SCR149 (State of Madhya Pradesh v. Orient Paper Mills), and placing reliance on the decision reported in : [1979]3SCR18 (Shri Shri Tarakeshwar Sio Thakur Jiu v. Bar Dass Dey and Company), after exhaustively adverting to the varieties of rights given under the lease for mining and exploitation and appropriation of the minerals excavated, it was held that the lease granted does not cease to be a lease of immovable property or for that matter can be ever said to have become a mere licence and that at any rate the right to enjoy immovable property would include the right to remove the minerals from the land leased. Finally, it was held that the leases of the nature in question are leases of immovable property and not either 'licences' or 'agreements to sell', the mineral concerned, the excavation of mineral being only a form of enjoyment of immovable property/leased out and consequently, there is no element of sale or purchase involved in the same so as to attract Section 6A of the Andhra Pradesh General Sales Tax Act, 1957. Not only, we are in respectful agreement with the exposition made and conclusions arrived at by the learned Judge, but the said view gains strong support and approval by the principles laid down by the Bench consisting of three of their Lordships of the apex Court in the decision reported in : [1985]3SCR26 (State of Orissa v. Titaghur Paper Mills Co. Ltd.), even in dealing with a case of forest contract almost akin to the one considered in State of Madhya Pradesh v. Orient Paper Mills Co. Ltd. : [1977]2SCR149 . After specifically adverting to the decision reported in : [1977]2SCR149 (State of Madhya Pradesh v. Orient Paper Mills Co. Ltd.) and several other decisions on the subject the larger Bench, disapproved the ruling in State of Madhya Pradesh v. Orient Paper Mills Co. Ltd. : [1977]2SCR149 by observing, 'we are unable to agree with the interpretation placed by the court on the document in the Orient Paper Mills' case : [1977]2SCR149 . We find that in that case this Court as also the High Court adopted a wrong approach in construing the said document' (vide para 117 of the report). In further being also strongly critical of the decision reported in : [1977]2SCR149 (State of Madhya Pradesh v. Orient Paper Mills Co. Ltd.), it was held that 'the authorities discussed above show that the case of Firm Chhotabhai Jethabhai Patel & Co. v. State of Madhya Pradesh : [1953]4SCR476 is not good law and has been overruled by the decisions of larger Benches of this Court. They equally show that the case of State of Madhya Pradesh v. Orient Paper Mills Co. Ltd. : [1977]2SCR149 is also not good law and that this decision was given per incuriam and laid down principles of interpretation which are wrong in law and cannot be assented to'. The judgment in Cooch Behar Contractors' Association v. State of West Bengal : (1996)10SCC380 apart from the fact that the subsequent judgment of a larger Bench holding the decision in Orient Paper Mills case : [1977]2SCR149 to be not good law was not brought to their Lordships' notice, was rendered in totally a different context as to whether such amount paid by way of royalty paid for acquisition of materials used in the execution of a works contract would constitute price of materials used in the works contract after the constitutional amendment permitting levy of sales tax, in respect of sale of goods involved in the execution of works contracts. Therefore, the amount of royalty paid in the case cannot be considered to be the sale price nor could the rights secured under or the contract of lease in form 'K' could be said to constitute any agreement of sale/purchase of goods so as to attract liability Under Section 5A of the Himachal Pradesh General Sales Tax Act.
35. So far as the alleged violation of the provisions of the Central Sales Tax Act, 1956 is concerned, the same is based upon either on account of non-filing or valid or defective and irregular filing of C forms for the period during which the tax liability was not disputed for purchase of goods, which required the issue of such C forms, as the case may be. The sheet-anchor of the basis of action in this regard, besides other decided cases, is the decision reported in : AIR1996SC3178 (State of Rajasthan v. Sarvotam Vegetables Products) rendered by the apex Court. Reliance was also placed for the respondents at the time of hearing on the decision reported in : [1997]3SCR184 (Shri Digvijay Cement Co. v. State of Rajasthan). These decisions, according to the petitioners, will have no relevance or application to the case like the one under our consideration, which is a case of total exemption and not merely a case for levy of concessional/reduced rate of taxation. As rightly contended for the petitioners, the decision in State of Rajasthan v. Sarvotam Vegetables Products : AIR1996SC3178 , dealt with case involving notifications under which they did not do away with the levy altogether but merely reduced the rate of tax from 4 per cent to 1 1/2 per cent or 2 1/2 per cent, as the case may be. This is made clear in more than one place in the judgment itself and the observations contained therein regarding the obligation/necessity to file C forms, to avail of the concessional rate of taxation cannot be taken to be a universal rule casting an obligation to file C forms, de hors the nature/extent of exemption and the facts and circumstances of the case, concerned. Even the decision reported in : [1997]3SCR184 ; AIR 1997 SC 2609 (Shri Digvijay Cement Co. v. State of Rajasthan) deals with a case of reduction of rate of tax only and not a case of either total exemption or case of total exemption under a notification being made conditional upon the filing of C forms ; since for the provisions of the Central Sales Tax Act and the Rules made thereunder, the question of filing C forms is envisaged only in order to avail of concessional or reduced rate of taxation. The reason which weighed with their Lordships of the apex Court is that where the notifications reduce or merely further reduced the rate of tax subject to certain conditions, they do not do away with the levy altogether and consequently one must first satisfy the condition in Section 8(4) to become eligible for the concessional rate in Section 8(1) of the Central Sales Tax Act, and that it is only thereafter he can claim the benefit of the notifications. The revisional authority has chosen to quote out of context the observations found made, with reference to the peculiar facts and circumstances of the case and the points projected in the said decision. Relying upon the decision reported in [1993] 90 STC 128 (Bimetal Bearings Ltd. v. State of Tamil Nadu) rendered by a Division Bench of the Madras High Court, it was also contended that even if C forms have been filed, as in the present case, including in one form more than one transaction exceeding the monetary limit, the defect alleged cannot be held to be so fundamental in respect of any essential feature going to the root of the matter, so as to affect the legality and validity of the C forms. In any event, as urged for the petitioners, such forms are permitted to be filed not only before the finalisation of the assessment and even at the appellate and revisional stages also and the same cannot be the ground for once and for all rejecting the claims or condemning the petitioners for non-compliance with/violation of the provisions of the Act, Rules and notifications. Case law are innumerable where the courts, including the apex Court, have held that even at the appellate stage the assessee may be allowed to file C forms or file rectified and proper forms if those filed were found to be defective in any manner or for any reason. Further, Shri Shanthi Bhushan, learned Senior Counsel is also right in contending that in a case where the availing of concession is dependent upon filing of C form, the non-filing of C form or the filing of defective C forms may only render the assessee liable to pay at the full rate of taxation without the benefit of concessional rate in their favour, and the filing of C forms being optional and a mere condition to avail of the concessional rate contemplated in the statutory provision as such, the lapse, if any, cannot be considered to operate as a penal or forfeiture clause. Being an optional benefit available, non-availing of the same or non-compliance of such provision, in any event, cannot be held to be non-compliance with the provisions of the Act, Rules and notifications, envisaged in the notification dated January 30, 1996. Placing such interpretation would amount to being not merely perfidious, but vitiated by perversity of approach also.
36. Consequently, we are of the view that the conclusions arrived at by the revisional authority that the petitioners were guilty of non-compliance with the provisions of the respective Sales Tax Acts, rules and notifications and, therefore, rendered themselves liable to be not only revoked/annulled of the exemption granted but become also disentitled to the continuance of the privilege of exemption and continuous holding of the certificate in form STE-II, granted in their favour, cannot be sustained in law and the same are hereby set aside.
37. Finally, the grounds urged and noticed as (a) and (d) supra, in support of the action of the revisional authority and the orders passed by it may be taken up for consideration. These grounds, in our view, turn upon the construction to be placed upon, as contended even for the respondents by their learned Senior Counsel of about six notifications issued from time to time, two of them statutory and the four non-statutory, issued in exercise of the discretionary and executive/administrative powers of the State Government. The relevant notifications have been adverted to by noticing the summary and contents thereof and extracting them also, wherever found necessary, in the earlier part of this judgment. The sum and substance of the reasoning of the respondents, particularly the revisional authority is that the petitioners, not having satisfied the eligibility criteria stipulated cannot be accorded the status of the prestigious cement industry within the meaning of the relevant notifications and that, therefore, the exemption allowed to avail of the incentives by the grant of such a status and the certificate in form STE-II, in recognition thereof is liable to be set aside and has been rightly set aside too, and, therefore, there are no merits in the challenge directed against the orders of the revisional authority in these cases. That the petitioners have not satisfied the essential fact that it is a 'prestigious cement industrial unit', has been found by the revisional authority on the basis that the requirements of para 1-C of the notification dated January 30, 1996 remained unfulfilled for the principal reason that the registration accorded to the petitioners, as such, and obtained by them was only in the meeting held on January 23, 1996 and the certificate of registration dated February 2, 1996, issued thereon, and consequently it cannot claim to have been registered with the empowered committee between May 1, 1992 and March 31, 1995 which is crucial for availing of the concession and, therefore, the petitioner-company is not one envisaged in para 1-C of the notification dated January 30, 1996 to avail of the concession of exemption in the absence of requisite mark of identity of registration between those dates. In traversing the claim based upon the registration certificate dated January 13, 1993 and strongly relied upon for the petitioners, the stand taken for the respondents is that such registration on January 13, 1993, was only that of a mere proposal or project on paper and not only the same did not satisfy the requirement/eligibility criteria as on that date but even the said registration as only 'prestigious unit' ceased to have any validity/use/purpose with the notification dated December 1, 1994 by which cement industry was specifically excluded from being treated as 'prestigious unit', and so long as it was either not got extended or re-validated and renewed under the notification dated December 1, 1994 as such or not registered as 'prestigious cement industrial unit', the same could not enure for the purpose of the petitioners, for availing of the concession of exemption from payment of sales tax. It was also urged for the respondents that, the option envisaged to be exercised under the notification dated July 6, 1995 within 90 days was from August 11, 1995, the date of commencement of production and which, therefore, though ought to have been made on or before November 10, 1995, but not having been done so and having been made only December 19, 1995, the petitioners would not be entitled to the benefit of exemption from payment of sales tax. The orders passed granting the certificate in form STE also was said to suffer serious infirmity and stood vitiated for the reason not only that there were no separate orders passed for the two different Acts--Himachal Pradesh General Sales Tax Act and Central Sales Tax Act but also for the reason that the required and proper enquiry has not been conducted by the competent authority to find out positively the satisfaction/compliance with the required eligibility criteria, as envisaged in the procedure stipulated for dealing with a claim/application made in form STE-I and that the mechanical orders passed and the consequent issue of certificate in form STE-II stood vitiated, calling for interference in the hands of the revisional authority and that therefore the revisional authority whose powers are said to be co-extensive with those of the original/competent authority was stated to be well within its rights, power and competence to go into the questions in the manner and as was expected of the original authority and set aside the certificate in form STE II, for the reasons and grounds specifically found and rendered by the revisional authority.
38. Both the learned Senior Counsel appearing on either side, invited our attention extensively and elaborately to the relevant notifications as well as the impugned orders to substantiate their respective stand. We have carefully considered the submissions in this regard keeping in view the elaborations made of their submissions with particular reference and emphasis made by them on the purport, import as also the language used in the notifications and the objects and aims of the notifications and the objects of the scheme underlying the various notifications, noticed supra. A compendious consideration of the above notifications leaves no doubt in assuming that they were meant to grant incentives, i.e., attract new industries and entrepreneurs to this State and promote the economic growth, encourage industrialisation and thereby also provide more employment opportunities in the economically and industrially backward State of Himachal Pradesh and solve the acute unemployment problems rampant in the State. No doubt, the person or dealer claiming incentives, concession and exemption from the levy of tax under any notification issued therefor, as part of scheme of providing incentives to the entrepreneurs setting up new industries, must strictly conform to the conditions stipulated and satisfy the requirements meticulously. But, that does not mean that the authorities concerned must or should adopt a hostile attitude by indulging the hair-splitting devices of interpretation, perverse reading and irrational understanding as well, in the application and enforcement of the norms and conditions with preconceived notions and vindictiveness in a manner unbecoming of the authorities concerned with quasi-judicial powers coupled with a duty to exercise them reasonably, objectively and fairly as well as justly. The manner of consideration adopted by the revisional authority, as disclosed from even a cursory reading of the orders passed and under challenge in these proceedings betrays irrationality and also exhibits an unjustifiable perversity guided by illusions, inventions and surmises, in all respects and vitiated also on account of misreading and misinterpreting of the relevant notifications, orders and the principles laid down by the courts. A conscious refusal to see reason and committed approach to fix the petitioners has, in our view, made the revisional authority go astray and such infirmities are writ large on the face of the orders, be it that it may be for augmenting the revenue of the State.
39. (a) By an order of the Director of Industries dated February 19, 1990, the petitioner was informed that the State Level Industrial Projects Approval and Review Authority (IPARA) has decided to approve the project of the petitioner for the establishment of a new undertaking (the one in question) subject to the conditions specified therein, obligating them to take steps effectively within the validity period which had been also stated to be valid for 12 months from the date of issue. The Revised Rules regarding grant of incentives to Industrial units in Himachal Pradesh, 1991 w.e.f. April 1, 1991 came to be issued by the notification dated March 27, 1991. The next notification, by way of amendment to the above Rules came to be issued on July 31, 1992 and by then Sections 42 and 42A of the General Sales Tax Act came to provide powers appropriate to formulate such schemes. Whether reference was made specifically thereto or not, it is well-settled that when statutory power is shown to exist and notifications satisfying its requirements come to be issued, such as those issued on July 31, 1992, December 1, 1994 and July 6, 1995, the notifications will have to be traced to the proper source of power and it may not be justified for the respondents to take extreme stands about the non-enforceability of those provisions in any court of law. The notifications issued in the Industries Department also must be traced and are referable to the powers available Under Sections 42 and 42A, as much as the notifications issued on January 30, 1996, and all these notifications have to read properly and harmoniously, as aimed towards the achievement of the same target. Notifications dated December 31, 1994, March 27, 1995 and January 30, 1996, at any rate are indisputably notifications issued invoking specifically the power Under Section 42 of the Himachal Pradesh General Sales Tax Act.
(b) The incentive Rules envisaged the constitution and functions of the empowered committee (vide Rule 24) and according to which such committee would be headed by (i) the Secretary (Industries), (ii) Managing Director, HPFC, (iii) Managing Director, HPSIDC, (iv) Chief Engineer (Commercial), HPSEB, (v) Member-Secretary of the Pollution Control Board, (vi) Excise and Taxation Commissioner, (vii) Chief Inspector of Factories, (viii) Manager, Industrial Development Bank of India at Shimla and (ix) Director of Industries as Member-Secretary--as the constituent members of the committee. It is this committee, which accorded registration to the petitioners and granted 'prestigious status' also subject to the conditions stipulated therein and the certificate issued by the Director of Industries who happens to be the member-secretary of the empowered committee, pursuant to the decision of the said committee envisaged the issue of the eligibility certificate for the availment of incentives as prestigious unit, after the unit goes into production and fulfil the conditions stipulated in the registration certificate, as also all other conditions/ criteria, as provided for in the Revised Rules, 1991, as amended from time to time. The proceedings dated January 28, 1995 and June 30, 1995, extended the validity of the approval by the IPARA and the time for commencement of production/registration certificate for prestigious unit for the periods up to June 30, 1995 and September 30, 1995-, respectively, and indisputably trial production was made on August 11, 1995 when permanent registration under the Sales Tax Act came to be also accorded and regular commercial production came to be commenced from September 26, 1995 and this fact was also certified by a certificate dated January 24, 1996 issued to that extent by the Director of Industries, Himachal Pradesh, in the following terms :
'No. Ind. Dev. F(34) IPARA-268/89-I
GOVERNMENT OF HIMACHAL PRADESH INDUSTRIES DEPARTMENT,
Dated Shimla-171001 the 24th January, 1996.
Certificate of commencement of commercial production.
This is to certify that Gujarat Ambuja Cements Ltd., having its industrial undertaking (unit Himachal) at village Suli, Tehsil Arki, District Solan, Himachal Pradesh, whose proposal was the manufacture of all types of cement was approved by IPARA vide No. Ind. Dev. F(34) IPARA-268/89 dated August 19, 1990 for a capacity of 8 lakh tonnes per annum of cement, have commenced commercial production with effect from 26th September, 1995. This is also to certify that the installed capacity at Darlaghat is 10 lakh tonnes per annum of clinker and 6 lakh tonnes per annum of cement grinding as on date. The company has so far made fixed capital investment in this industrial undertaking, viz., land Rs. 6.5 crores, building Rs. 66.5 crores, plant and machinery Rs. 306 crores and other fixed assets Rs. 12.00 crores, totalling Rs. 391 crores and employed 353 persons.
It is further certified that the company shall manufacture cement to the extent of a minimum of 75 per cent of the installed capacity or approved capacity of 8 lakh tonnes of cement manufacturing whichever is higher, at Darlaghat and the company is permitted to export/transport the remaining clinker, including surplus clinker by way of excess capacity utilisation, outside Himachal Pradesh vide IPARA approval accorded vide No. Ind. Dev. F(34) IPARA-89-I dated December 12, 1994.
Sd/-
Director of Industries, Himachal Pradesh.
No. Ind. Dev. F(34) IPARA-268/89-I dated January 24, 1996.'
It may also be pointed out at this stage that provisional sales tax registration was accorded to the petitioners under the Central Sales Tax Act on and w.e.f. February 14, 1992 and the same was said to be valid 'until cancellation', and the same was being renewed by extensions till June 30, 1995 and further extension was sought for up to December 31, 1995 by paying the required fee, by means of a challan evidencing such payment and making an application for that purpose on June 17, 1995. The fact that no specific orders were passed either rejecting the application or cancelling the certificate of provisional registration initially granted will, in our view, give them continued status as such till permanent registration was granted under the Himachal Pradesh General Sales Tax Act, w.e.f. August 11, 1995.
(c) While that be the position, it becomes relevant to consider the claim of the respondents as to whether the petitioners could not be said to have conformed to or satisfied and complied with the eligibility criteria as also the consequences of the declaration granted by the Industries Department through the Director of Industries, Himachal Pradesh, who happened to be also the Member-Secretary of the empowered committee in carrying out the decisions of the committee.
40. From the reasons assigned by the revisional authority to come to the conclusion that the petitioners do not satisfy the eligibility criteria, as could be seen by going through the orders passed by the said authority, it is not for the reason that there was no investment of the required amount of capital or that there was no employment of the stipulated number of persons on regular basis or that it has not commenced production after May 1, 1992 that the petitioners were considered not to satisfy the criterion but merely for the reason that the registration was not accorded between May 1, 1992 and March 31, 1995 and instead it was only on February 2, 1996 it was so granted. The satisfaction of the eligibility criteria on a particular date that should really matter to give the status and not the formal certification on a particular date, particularly when it is not so provided in the scheme that it only from the date of certificate as such, the status could be claimed or acquired. It is in order to substantiate such queer logic of reasoning, in the reply filed by them by way of counter to the writ petition and also at the time of hearing, a plea was raised that the registration accorded on January 13, 1993, if at all was of a project/blue print on paper and unless the registration as shown to be of a fulfledged unit functional in all respects, satisfying the criteria, even on the date of according registration by the empowered committee, it is no registration in the eye of law for the purpose of fulfilling the norm of having got to have been registered between May 1, 1992 and March 31, 1995. The scheme of incentives introduced with changes and modifications, from time to time, from March 27, 1991 and till July 6, 1995 and the notifications dated January 30, 1996 issued under the Himachal Pradesh General Sales Tax Act and Central Sales Tax Act have to be harmoniously and reasonably construed keeping in view the purpose underlying the scheme to make it a real and effective as well as workable one, and not to be construed in the manner of 'shylocks demand for justice'. The manner of construction sought to be now made by the revisional authority and the one sought to be projected would not and could not have been the method of implementation envisaged is best demonstrated by the contemporaneous method of enforcement of the provisions of the scheme by the concerned authorities entrusted with the implementation of the same, of which the Excise and Taxation Commissioner is also one, and that he seems to have also been a party to the various proceedings passed from time to time, before suddenly allowing his department to make a somersault in the matter, by taking an 'U' turn. It is in such circumstances, we find that the submissions of Shri Shanti Bhushan, learned Senior Counsel seem to be not only reasonable when it is contended that the registration envisaged is not either as 'prestigious unit' or 'prestigious cement industrial unit', and that the same should not be mixed or confused with (a) registration, (b) grant/accord of status and (c) certification of entitlement to avail of the incentives/exemption, but also conform really to the phased manner in which the claimant has to satisfy the eligibility criteria, from time to time, before he could really and ultimately avail of the benefit of the incentives/exemptions under the scheme. If only the industry is to be functional in all respects even at the time of registration, which is a preliminary stage and in exercise of its discretion the Government deny even registration--the whole industry will be ruined, and therefore, the registration and eligibility certificates are to be treated as distinct and separate, with different purposes altogether, and should not be mixed together. Rule 24.4, second part, itself will also belie the plea of the respondents, in this regard.
41. The competence, power and authority to declare initially an Industry to be either 'prestigious unit' or 'prestigious cement industrial unit', lies exclusively with the empowered committee of officers only and not of any particular department, be it of the Industry Department or Excise and Taxation Department, or any one or other of the officers of those departments. As a matter of fact, such declaration has been deliberately and consciously accorded, status of finality in the Rules (vide Rule 24.4) and Rule 22 which later became Rule 26 and thereafter as Rule 28 specifically further stipulated that if there is any dispute/doubt in interpreting and implementing them--the same shall be referred to the decision of the Financial Commissioner/Secretary of the Industry Department only making his decision also to be final and, therefore, no authority or officer of the Excise and Taxation Department, be it even the revisional authority could arrogate to themselves such jurisdiction to decide as to whether even at the initial stage the industry/dealer concerned has to be accorded or acquired such status. Since, the exemption in the case on hand by way of incentive is of the levy of sales tax, and it is the Excise and Taxation Laws a department which has to administer the taxation matters, the notification dated January 30, 1996 confers power upon the authorities of the Excise and Taxation Department to oversee, even after the grant of the required status as such by the empowered committee, whether it continued to satisfy the requirements and eligibility criteria, as long and so long as the exemption is sought to be availed of, so that an industrial unit, which though satisfied initially the norms, but by ceasing to continue to conform the same and thereby having lost or forfeited the right to enjoy-or avail of the incentives does not avail of the same even after it ceased to be eligible also. Consequently, the revisional authority was not empowered to and had no authority, in our view, to review/ reconsider the decision taken and the status accorded by the empowered committee, to find it to be incorrect or annul the same or even come to a different or contra conclusion. Having regard to the finality given to the decision of the empowered committee, it is very much binding upon the other departments and any of the individual officers of any one or more of the other departments and any one feeling or entertaining any dispute or doubt has the only option to invoke the provisions contained in Rule 28 as amended and for the said reason also, there is no jurisdiction or authority in the revisional authority to assume such jurisdiction under the pretext of enforcing the terms of the notification dated January 30, 1996. This conclusion of ours would also gain support from the position that even the Commissioner of Excise and Taxation himself is a party to the decision of the empowered committee as one of its members and in the teeth of the combined decision of such high ranking officers of the State Government, a delegate and an officer inferior in rank to the Commissioner or the other authorities could not be assumed to have been accorded such powers to scuttle and undermine the decision of the empowered committee, either directly or indirectly. The significant fact that by name specifically the petitioner was indicated to be the beneficiary of the exemption in the notification itself cannot be overlooked and it would also go to show that the consequences of or the efficacy of such notification cannot be whittled down by an authority subordinate to the State Government, taking either a contra view or stand. Consequently, the conclusion arrived at by the revisional authority, in this regard, is liable to be and is hereby set aside. The claim made for the respondents that with the amendment of the incentive Rules on December 1, 1994, the registration certificate, if any, granted on January 13, 1993 ceased to have effect either for the reason that it has not been deemed to have been one issued by the Rules as amended or got extended or re-validated under the amended Rules has no merit whatsoever. Apart from the fact that there is nothing repugnant or contradictory in the Rules, as amended on December 1, 1994 for the continued validity and enforceability of the registration certificate dated January 13, 1993, a fair and proper reading of the Rules, particularly, Rule 1.2 would itself go to show that the very purpose and object of the Rules though amended from time to time is to allow industrial units to avail of all new incentives also as long as such units continued to enjoy the status earlier accorded to them. It should all the more be so, when no additional or further criteria has been stipulated to be satisfied. Likewise, the plea on behalf of the respondents that the petitioners having committed a lapse in not opting for and exercising option within 90 days as provided under the amended Rules themselves are ineligible to claim benefit of exemption, has no merit of acceptance. This plea proceeds on the supposition that 90 days period has to be computed from the date of trial production. In our view, the date of commencement of production has to be computed from the date of commencement of effective and real production for commercial purposes and not a token or trial production for the purpose of testing.
42. The further reason assigned by the revisional authority that the competent authority has not passed two separate orders under the two different enactments, State as well as Central law, and that there was no proper or thorough enquiry before according the certificate in form STE II, are nothing but self serving reasons invented ingeniously to interfere with the orders. Such procedural lapses/irregularities, even if true could have been rectified by issuing a direction to streamline and straighten the record by passing at least by then two separate orders and to keep for the purposes of record. The fact that power is given to enquire into the matter to ensure that the criteria is satisfied and fulfilled at all time, is not to review the certificate granted by the empowered committee but to see whether by any subsequent act or conduct the dealer concerned became disentitled to be either granted the certificate in form STE II or for its continuance in force. That this reason is not a genuine or bona fide one but invented for the occasion will be amply made clear from the omission on the part of the revisional authority from going into the said question itself and recording a finding either way in this regard instead of using such an invented or supposed lapse or reason merely to set aside the certificate and expose and saddle them with liability to pay tax and penalty as well interest, even when it is a fact on record that there is no dispute over the position that such person, who was permitted to avail of the incentive is prohibited from collecting sales tax on their sales and the petitioners, have not also passed on the sales tax liability by making any such collection. Though passing of sales tax paid by a dealer is not a sine qua non for the valid levy of sales tax, inasmuch as the dealer in this case could not and as a matter of fact did not collect sales tax by passing on their liability to purchasers, as a sequel to the exemption granted, it is unreasonable for the respondents to adopt such a strange procedure to victimise them for having abided by and acted in the scheme, in this regard.
43. So long as the petitioners satisfied the eligibility criteria prescribed in the revised Incentive Rules, as amended from time to time, he would be entitled to the benefits and incentives extended under the Rules and the statutory notification is not a must or an essential pre-requisite for the petitioners to assert/enforce such rights. The statutory notifications issued under the relevant taxing enactments only go to ratify and accord statutory recognition also to what was originally planned and proclaimed as a policy decision and guidelines. Viewed thus, the petitioners would, in our view, be entitled to the benefit of the incentives from the date of commencement of commercial production on September 26, 1995. As held in State of Bihar v. Suprabhat Steel Ltd. : AIR1999SC303 , it would not be permissible for even the State Government to override or negate the incentives and benefits which any industrial unit would be otherwise entitled to under the incentive policy, proclaimed by the Government itself.
44. For all the reasons stated above, we have no hesitation for setting aside the impugned orders of the revisional authority, challenged in these writ petitions as also the orders impugned in C.W.P. No. 52 of 1999 based on identical reasons and the writ petitions, shall stand allowed, as prayed for. But it is made clear that the continued eligibility of the petitioners to avail of the incentives will depend upon the continued satisfactory compliance with and conforming to the other terms and conditions of the notification dated January 30, 1996. As and when, there is any violation in this regard, it will be always open to the State and the competent authorities to take appropriate action, in this regard in accordance with law. The petitioners, if made any deposit to satisfy the conditional order of stay granted in their favour, during the pendency of the writ petitions, they will be entitled to refund and restitution of the same in terms of the very conditional order passed by this Court on March 3, 1999 and the same shall also be deemed to be and read as part and parcel of this order, so far as the relief of refund/restitution ordered is concerned. No costs.