MARUTI TEXTILES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The petitioner is an industrial undertaking which claims exemption from the electricity duty levied under the Bombay Electricity Duty Act, 1958 [hereinafter referred to as, `the Act']. The authorities below have rejected the claim made by the petitioner on the ground that the petitioner is not a `new industrial undertaking' as envisaged under Section 3 of the Act.

(2.) Mr. Joshi has submitted that under Section 3 of the Act, a new industrial undertaking has been exempted from payment of electricity duty. The words, `a new industrial undertaking' have been defined in Clause (ii) of Explanation 1 to sub-section 2 of Section 3 to mean, inter alia, ` an industrial undertaking which is not formed by transfer to a new business or undertaking of a building, machinery or plant previously used in the State for any industrial purpose, of such value in relation to total investments, as the State Government may, by notification in the Official Gazette, specify.' Mr. Joshi has submitted that the State Government has, in exercise of the power conferred under the above referred clause, issued a Notification on 8th July, 1992 specifying the value of such transferred building, machinery or plant at 10% of the total investments. He has submitted that in so far as the petitioner is concerned, the value of machinery and plant transferred to the petitioner's undertaking previously used in the State is less than 10% of its total investments. However, the authorities below have failed to construe the above provision correctly and have excluded the value of the investment made in the land, while calculating the value of the total investment. Mr. Joshi has submitted that the legislative intention in the above referred provision is clear and unambiguous. While determining whether a particular undertaking is a `new undertaking' or not, the value of the building, machinery and plant which has been previously used in the State is required to be calculated in relation to the total investments. The words, `total investments' used in the said provision have not been defined in the Act. The said words, therefore, should be given the meaning that they carry in the commercial parlance. If such a meaning is given, the words `total investments' should also include the investment made in the land. If petitioner's investment in the land were included, the value of the machinery and plant previously used in the State and transferred in the petitioner undertaking is less than 10 per cent of the total investments which should entitle the petitioner the exemption from the levy of the electricity duty. He has further submitted that the object of granting such exemption is to attract the industries to the State. The provisions of the Act, therefore, should be construed in a manner which is conducive to the object underlying the said provision. Even otherwise, it being a taxing statute, the meaning which is more beneficial to the assessee is required to be accepted. In either case, the petitioner would be entitled to the exemption from the levy of electricity duty.

(3.) In answer to the petition, Mrs. Shah has submitted that the definition of the words, `a new industrial undertaking' is exhaustive and no unit other than the one which falls within the said definition can be said to be a new industrial undertaking. The intention of the Government is to consider the value of the building, machinery and plant alone and the value of the investment made in the land cannot be considered while determining the value of the investment in the building, machinery or plant previously used in relation to total investments.