SHREYANS SPINNING MILLS Vs. STATE OF PUNJAB

JUDGEMENT

(1.) Was the petitioner entitled to exemption from payment of purchase tax/sales tax to the tune of Rs. 8 crores or Rs. 6 crores under the industrial policy announced by the Government ? This is the short question that arises for consideration in this writ petition. A few facts may be noticed : The petitioner is engaged in the manufacture of yarn. It had started commercial production on March 30, 1991. It claimed exemption from payment of purchase tax/sales tax in pursuance of the industrial policy and the incentive code issued by the State Government on March 30, 1989. The request was accepted. On December 6, 1991, an eligibility certificate was issued in favour of the petitioner by the General Manager, District Industries Centre, Ludhiana. It was certified that the petitioner "is eligible to take sales tax/purchase tax (exemption) for 10 years from March 30, 1991 to March 30, 2001 - up to 8 crores of rupees". Even a letter to this effect was sent by the General Manager to the Assistant Commissioner, Excise and Taxation Department in January, 1992. On April 21, 1995, the Excise and Taxation Commissioner issued an exemption certificate under the provisions of the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991, certifying that the petitioner shall be entitled to exemption to the extent of Rs. 6 crores during the period from March 1991 to March 2001. A copy of this certificate is at annexure P4. The petitioner submitted various representations. However, its request for extension of exemption from Rs. 6 crores to Rs. 8 crores was not accepted.

(2.) The petitioner approached this Court through Civil Writ Petition No. 10325 of 1997. It was noticed by the Bench that the policy provided for exemption to the extent of Rs. 6 crores while under the Code, the limit was fixed at for Rs. 8 crores. There was "some confusion in view of the two notifications bearing No. 4/15/89-41BIII/2919 and 4/15/89-41BIII/2929 dated 30th March, 1989". The Bench directed that "in view of the conflict between two notifications" the petitioner may make "a comprehensive representation to the Secretary, Industries, Punjab within a period of two weeks from today and on the receipt of such a representation the Secretary, Industries, Punjab will take a decision thereon by passing a speaking order and after hearing the petitioner as well as the representative of Excise and Taxation Department, Punjab". A copy of the order dated January 8, 1998 has been produced as annexure P10.

(3.) In pursuance of the directions given by the Bench, the petitioner submitted a representation. It was considered and rejected by the Secretary vide his order dated May 5, 1998. A copy of this order is at annexure P12 with the writ petition. The petitioner complains that the order is not in conformity with the rules. Thus, the petitioner claims that the order be quashed and exemption of Rs. 8 crores be granted.