STATE OF BIHAR Vs. STEEL CITY BEVERAGES LIMITED

JUDGEMENT

(1.) A short question arises for consideration in this appeal is whether investment made by Steel City Beverages Limited, (respondent No. 1 herein and hereafter referred to as "the Company"), in bottles and crates can be said to be investment in "Plant" so as to amount to "Fixed Capital Investment" under the Bihar Sales Tax Supplementary (Deferment of Tax) Rules, 1990 (hereinafter referred to as "the Deferment Rules")

(2.) The Company is engaged in the business of manufacturing soft-drinks and beverages. It is a registered dealer under the Bihar Finance Act, 1981. It filed a writ petition being Civil Writ Jurisdiction Case No. 1118 of 1992, through its Director-respondent No. 2 in Patna High Court for a direction to the State Government and its officers, appellants herein, to accord permission under Rule 42 (7) of the Bihar Sales Tax Rules, 1983 and exempt it from using Form No. XXVIII-B. While the petition was pending before the High Court, it made an application under the Deferment Rules to the competent authority for grant of an eligibility certificate which would enable it to claim benefit of deferment of payment of sales-tax scheme declared under the Deferment Rules. It was stated in the application that under the Resolution of the State Government dated 6-9-1989 and the Deferment Rules, it was qualified to seek the benefit of deferment. The High Court by its order dated 13-7-1992 directed the Deputy Commissioner of Commercial Taxes, respondent No. 4, to place that application before the District Level Committee for Singhbhum District for its consideration. The District Level Committee decided on 9-1-1995 that the Company was entitled to the benefit of deferment of payment of sales-tax to the extent of 90% of its fixed capital investment in fixed-capital assets. However, it rejected the Company's claim that investment in bottles, crates, electrification and tools was an investment in "Plant" and, therefore, it was also a "fixed capital investment". The Company, therefore, amended the writ petition and challenged that part of the decision of the District Level Committee which was against it.

(3.) The High Court after considering that under the Deferment Rules "fixed capital investment" means investment in land, building, plant and machinery and that they do not define the word "Plant", observed that it was required to be construed according to its dictionary meaning or as understood in common parlance and not in its technical sense. It then held that the word "Plant" would include whatever apparatus is used by a businessman for carrying on his business; not his stock in trade which he buys or makes for sales, but all goods and chattels fixed or movable which he keeps for employment in his business and which have some degree of durability. Considering the nature of business of the Company, namely, manufacturing soft drinks and beverage, the High Court held that bottles and crates employed by it for its business are also 'Plant' and, therefore, the Company is entitled to get the benefit of deferment on the investment made in them. The High Court quashed the decision of the District Level Committee which was under challenge and directed the State and its officers to grant the benefit of deferment after taking into account the investment made in bottles and crates also. The claim in relation to electrification and tools was not pressed before the High Court. Aggrieved by the decision of the High Court, the State has filed this appeal.