BAKUL OIL INDUSTRIES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) In this appeal by certificate under Article 133(1)(c) of the Constitution two questions fall for consideration viz;

(2.) In order to achieve dispersal of industries to rural areas and to provide fillip to accelerate development of industries the Government of Gujarat ('Government' in short) issued a Notification on 29-4-1970 in exercise of its powers under Section 49(2) of the Act exempting wholly or partly from payment of sales tax or purchase tax, as the case may be, certain specified classes of sales and purchases described in the entries at Serial Nos. 1 to 52 in the Schedule. The said Notification was subsequently amended by another Notification dated 11-11-1970 and a new entry, entry No. 53, was added in the Schedule below entry at Serial No. 52. The new entry consisted of two parts, one part giving exemption from purchase tax and the other, from sales tax. The Notification provided that subject to the conditions specified therein a manufacturer who establishes a new industry would be given exemption of "the whole of purchase tax under Section 15 of the Act" in respect of "purchase of raw materials, processing materials, machinery or packing materials from a person who is not a registered dealer". It was similarly provided that subject to the conditions prescribed in the Notification a manufacturer who establishes a new industry would be given exemption of the whole of sales tax leviable under the Act in respect of "sales of raw materials, processing materials by a registered dealer". One of the conditions imposed was that the new industry should have been commissioned on or after 1-4-1970 in areas beyond 24 kilometers from the Municipal limits of the cities of Ahmedabad and Baroda and 16 kilometers from the Municipal limits of Surat, Bhavnagar, Rajkot and Jamnagar and that the manufacturer should obtain an eligibility certificate from the Industries commissioner, Gujarat State certifying the fulfilment of these conditions. The Notification provided that a certified manufacturer "shall be entitled to the exemption for a period of five years from the date of commissioning of the industry as certified by the Industries commissioner in the eligibility certificate". There was an Explanation in the Notification to define what a "new industry" means and it was in the following terms:-

(3.) The appellants had set up a plant for decorticating and crushing cotton and groundnut seeds for manufacture of oil at a place called Kadi beyond 24 kilometers from Ahmedabad and commissioned the plant on May 17, 1970. On the strength of the location of the oil mill at a place more than 24 kilometers from the Municipal limits of Ahmedabad and the commissioning of the plant on May 17, 1970, the appellant applied to the Industries commissioner for an "eligibility certificate" for claiming exemption from payment of sales tax as per the Notification dated November 11, 1970. The Industries commissioner rejected the application giving certain reasons therefor. The appellants thereupon filed Special Civil Application No. 562 of 1971 under Article 226 of the Constitution for an order directing the Industries commissioner to grant them an eligibility certificate in terms of the Notification.