AMRIT BANASPATI COMPANY LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners have preferred this writ petition challenging the legality and validity of the orders passed by the respondents refusing to grant to the petitioner No. I certificate in terms of Section 32A (2B) (ii) of the Income Tax Act, 1961 hereinafter referred to as the Act for the assessment years 1981-82 to 1985-86.

(2.) By a judgment and order dated 4.2.1987 this Court dismissed the aforesaid writ petition in limine. Being aggrieved by the aforesaid judgment and order of this Court the petitioner moved the Supreme Court and by order dated 13.3.1989 the Supreme Court set aside the order of this Court dismissing the writ petition in limine and remitted the matter back to this Court for fresh disposal of the writ petition by the High Court with a reasoned judgment supporting the view taken by the High Court. In pursuance of the aforesaid order passed by the Supreme Court this writ petition was taken up for admission and was admitted by this Court. This writ petition is accordingly taken up for hearing and being disposed of finally.

(3.) The petitioner No. I was and is engaged in the business of manufacture of Banaspati and allied products. In 1976 the petitioner decided to diversify into manufacture and production of writing and printing paper and with this end in view, the petitioner on 24.7.1976 wrote a letter to the Director of Forest Research Institute, at Dehradun, wholly owned and financed by the Government of India, seeking technology process/ knowhow for manufacture of writing paper and craft paper from agricultural waste such as cereal straws and sabai grass and sarkanda etc. The Forest Research Institute carried out an extensive laboratory test and pilot plant runs were carried out at the expense of the petitioner by using agricultural wastes such as rice-straw, kana and kahi grass as the raw materials. Eventually a technology, process knowhow using agricultural wastes and grasses as raw materials by using one common line for cleaning, refining and bleaching of the combination of the raw materials was evolved by Forest Research Institute for the manufacture of writing and printing paper. The said technology process and knowhow was delivered to the petitioner by the Forest Research Institute under their letter dated 31.3.1978. In pursuance of the aforesaid process and knowhow supplied by the Forest Research Institute in respect of the technology the petitioner set up its paper mill at Village Sailakhurd, District Hoshiarpur and the said mill went into production in and around 10.6.1980. The Forest Research Institute issued to the petitioner a certificate on 9.10.1980 certifying that the petitioner No. I was using the said technology for manufacture of paper developed by Forest Research Institute and given to the petitioner No. 1. The petitioner thereafter filed an application in the prescribed form with the Secretary, Department of Science and Technology for grant of a certificate as provided for in Section 32A (2B) of the Income Tax Act under their letter dated 15.4.1983. Thereafter it appears that a number of correspondences were exchanged between the petitioner and the Ministry of Science and Technology, Government of India and discussions with the various authorities had taken place in respect of the grant of the said certificate. On 23.8.1984 the Income Tax Officer passed assessment order for the assessment year 1981-82 and rejected the claim of the petitioner for higher investment allowance on the ground that the petitioner failed to produce a certificate from the prescribed authority as required under Section 32A(2B)(ii) of the said Act for claiming such benefit. Finally the respondent No. 3 rejected the petitioner's application for issue of a certificate under Section 32A(2B) of the Income Tax Act as requested by them.