STATE OF MADHYA PRADESH Vs. G S DALL AND FLOUR MILLS:MOHD ISMAIL:STATE OF MADHYA PRADESH:STATE OF MADHYA PRADESH:STATE OF MADHYA PRADESH:STATE OF MADHYA PRADESH:STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE civil appeals and Special Leave Petition No. 12054 of 1987 are by the State of Madhya Pradesh (M.P.). THE respondents in these two matters and the petitioners in the other five special leave petitions are certain concerns in M.P. assessable to sales tax (hereinafter compendiously referred to as 'the assessees'). All these matters can be con155 veniently disposed of by a common judgment as they raise a common issue.

(2.) THE assessees' claim for exemption from sales tax for certain periods in question was accepted by the High court in the case of G.S. Dall and Flour Mills[1987 20 STL 206 (MP)] and, following it, in the case of Mohd. Ismail (a case where the exemption sought for was originally granted but subsequently revoked). However, subsequently, a full bench of the High court, in the case of Jagadamba Industries, disapproved the view taken by the Division bench in the G.S. Dall and Flour Mills case and, following the full bench, the writ petitions filed by certain other assessees were dismissed by the High court. THE State is aggrieved by the judgment in the first two cases and the assessees by the High court's decision in the other cases. Hence these appeals and special leave petitions.

(3.) IT is not in dispute that the assessees before us fulfil the qualifications mentioned in the notification. However, when they approached the Director of Industries for the certificate of exemption envisaged under column (3 of the notification, it was denied to them on the ground that the industries run by them are "traditional industries" which were not eligible for exemption. The assessees went to court contending that this was totally unjustified. They said, the concept of "traditional industries" was one unspecified in the notification. The authorities had no jurisdic160 tion to travel outside the terms of the notification and import extraneous considerations to deny the assessees an exemption they were entitled to under the notification. IT is this contention that was accepted in the G.S. Dall and Flour Mills case. The State had relied on the provisions of the M.P. (Deferment of Payment of Tax) Rules, 1983, notified on September 1, 1983 (in particular, Rule 13 thereof) and on certain instructions that had been issued by the government on 12/01/1983 pertaining to the "grant of certificate of eligibility to new industrial units claiming exemption from/deferment of payment of sales tax". The High court took the view that these rules and instructions had no relevance to the claim for exemption put forward under the notification of 23/10/1981 and that, in any event, the executive instructions could not override the provisions of the statutory notification. This judgment was delivered on 7/10/1986 by Sohani, C.J. and Faizanuddin, J.