STATE OF GUJARAT Vs. MARUTI TEXTILES

JUDGEMENT

(1.) <DJG>BANKIM.N.MEHTA, J.</DJG> Appellant-State and the authorities under the Bombay Electricity Duty Act, 1958 (for short, "the Act"), have preferred this appeal from judgment dated 28.8.2001 of learned single Judge of this Court in SCA No.2630 of 2001, whereby petition of the respondent herein was allowed and the orders impugned therein were set aside. The respondent had established their industry in Gujarat in the year 1996 and applied for exemption from payment of electricity duty as a small scale unit.

(2.) Under the provisions of section 3 of the Act, a new industrial undertaking was exempt from payment of duty and such industrial undertaking is defined, inter alia, as an undertaking which is not formed by transfer to a new business or undertaking of building, machinery or plant previously used in the State for any industrial purpose, of such value in relation to total investment, as the State Government may, by notification in the Official Gazette, specify. The State Government had issued notification dated 08.07.1992 in exercise of the aforesaid power and specified that:

(3.) After adverting to the scheme of the Act and legislative intent in enacting the provisions of sub-section (2) of section 3 of the Act, learned single Judge took the view that the words "total investment" should include the investment made in the land as well. It was argued before us by learned A.G.P. that the language of notification dated 08.07.1992 was clear and when only the value of building, machinery or plant previously used in the State for calculating 10% of the total investment were to be considered, the same yardstick ought to be applied for calculating the total investment and the component of cost of land must be excluded for arriving at the amount of total investment of which 10% could be the building, machinery or plant previously used. No rational basis could be provided for such submission. It was, however, submitted that if the cost of land, which is always substantially high, were to be included in the total investment, the purpose of granting exemption to new industrial undertaking would be defeated as the purpose of granting exemption to new investment in building, plant and machinery was to attract investors to invest in new productive investments. It was again argued that while the cost of land was excluded from the value of previously used building, machinery or plant for arriving at the total figures of old investment, value of the land should also be excluded in calculation of total investment.