HINDUSTAN REPROGRAPHICS LIMITED Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) The writ petition arises in the following circumstances : The petitioner-company is a registered dealer under the Uttar Pradesh as well as the Central Sales Tax Acts. It has invested about rupees five crores and established a unit in the district of Dehradun for manufacture of photo-copier, microfilm, reader-cum-printer, etc. It is registered as a medium scale industry. The petitioner's unit having been established in the district of Dehradun with capital investment exceeding three lacs rupees was entitled to exemption from payment of tax for a period of five years from the date of starting production under column 3(b) at serial No. 3 of Government notification dated 27th August, 1984. Accordingly on the application of the petitioner for grant of eligibility certificate under Section 4-A of the U.P. Sales Tax Act (hereinafter referred to as "the Act"), the Director of Industries, respondent No. 2, by order dated 9th December, 1984 granted to the petitioner the eligibility certificate (annexure 1) for a period of five years with effect from 14th January, 1983, the date of starting production. Next came Government notification, dated 29th January, 1985, superseding the earlier notification, dated 27th August, 1984 and it, inter alia, provided that for units with capital investment exceeding three lacs rupees and the date of production whereof falls on or after 1st October, 1982 but not later than 11th January, 1990, the period of exemption in the district of Dehradun shall be seven years which shall be reckoned from the date of first sale, if such sale takes place not later than six months from the date of starting production, or in other cases, from the date following the expiration of six months from the date of starting production subject to the condition that the said industrial unit has not discontinued production of such goods for a period exceeding six months at a stretch in any assessment year. A similar notification under Sub-section (5) of Section 8 of the Central Sales Tax Act, 1956, was also issued by the Government on 29th January, 1985 extending the period of exemption from five years to seven years in respect of units in the district of Dehradun, the date of starting production whereof falls on or after 1st October, 1982, but not later than 31st March, 1990, with capital investment exceeding three lacs rupees. Thereafter, another notification was issued by the Government on 26th December, 1985 superseding the notification, dated 29th January, 1985 and it also, inter alia, provided that the period of exemption for units in the district of Dehradun with capital investment exceeding three lacs rupees and the date of starting production whereof falls on or after 1st October, 1982 but not later than 3lst March, 1990, shall be seven years. A similar notification was issued on 26th December, 1985 under the Central Sales Tax Act superseding the notification, dated 29th January, 1985 and it also, inter alia, provided that in respect of units in the district of Dehradun with capital investment exceeding three lacs rupees and the date of starting production whereof falls on or after 1st October, 1982 but not later than 31st March, 1990, the period of exemption shall be seven years. On 17th June, 1987 the petitioner applied for exemption for a period of seven years on the strength of notifications, dated 29th January, 1985 and 26th December, 1985 and respondent No. 2 by his order, dated 17th June, 1987, extended the period of exemption from five years to seven years with effect from 14th January, 1983, the date of starting production (annexure 6). However, by order dated 23rd May, 1988 (annexure 8), respondent No. 2 reduced the period of exemption from seven years to five years on the ground that by virtue of clarifications received under Government letters, dated 17th March, 1988 and 23rd March, 1988 the defined date of production of the petitioner's unit being prior to 29th January, 1985, the petitioner was entitled to exemption only for a period of five years under the Government notification, dated 27th August, 1984. It is this order, dated 23rd May, 1988, which is challenged in this writ petition.

(2.) In the counter filed on behalf of respondent No. 2, it is not disputed that the petitioner's unit is a "new unit" as defined under Section 4-A of the Act and that the date of starting production was 14th January, 1983. It is explained that though it was provided in the notification, dated 29th January, 1985, that units in the district of Dehradun with capital investment of more than three lacs rupees, would be entitled to exemption for a period of seven years if their date of starting production falls between 1st October, 1982 and 31st March, 1990, the Government later on clarified that units whose date of production fell prior to 29th January, 1985 shall be given exemption only for a period of five years from the defined date of production under Government notification, dated 27th August, 1984. Photostat copies of the Government letters, dated 17th March, 1988 and 23rd March, 1988, have been filed. The relevant Government instructions contained in these two letters are that units whose defined date of production fell after 1st October, 1982 but prior to 29th January, 1985, would be entitled to exemption under notification, dated 27th August, 1984 and units whose denned date of production fell between 29th January, 1985 and 25th December, 1985 would be entitled to exemption contained in the notification dated 29th January, 1985 and lastly units whose defined date of production fell after 26th December, 1985, would be entitled to exemption according to notification, dated 26th December, 1985.

(3.) The question which arises for consideration is whether the period of exemption of seven years granted to the petitioner under notifications dated 29th January, 1985 and 26th December, 1985, could be modified by the Government as per Government instructions contained in letters dated 17th March, 1988 and 23rd March, 1988. Sri Bharatji Agrawal, learned counsel appearing for the petitioner, vehemently urged that notifications dated 29th January, 1985 and 26th December, 1985, were statutory notifications and, therefore, they could not be modified by administrative instructions issued by the Government in the letters dated 17th March, 1988 and 23rd March, 1988. Sri P.C. Srivastava, learned Standing Counsel, appearing for the respondents, on the other hand, submitted that the instructions contained in Government letters dated 17th March, 1988 and 23rd March, 1988, were nothing more than clarification of the actual position.