GUPTA BRICK WORKS Vs. COMMERCIAL TAXES TRIBUNAL

JUDGEMENT

(1.) The true import and impact of the two notifications issued under Section 4(3)(b) of the Bihar Sales Tax Act, 1959 for exempting the newly set up small-scale industries from the incidence of general and special sales tax is the primal question necessitating this reference to the Full Bench. Equally at issue is the correctness of the observations in the earlier Division Bench judgment in Kailash Roller Flour Mills v. Assistant Commissioner of Commercial Taxes [1981] 48 STC 297.

(2.) The facts are not in dispute and lie within a narrow compass. The State of Bihar in order to extend incentives for the setting up of small-scale industries within it issued Notification No. A. STGL-E-1013/69/9924 F.T. dated the 19th September, 1969 granting exemption from the levy of general sales tax as well as special sales tax on the sales of finished products by the newly set up small-scale industries for a period of five years from the date they started production. This notification was given retrospective effect from the 19th June, 1969 and was to remain in force till the 31st March, 1974. A similar Notification No. B. STGL-E-1023/73 S.O. 351 dated the 14th March, 1974 was then issued which was to remain in force from the 1st April, 1974 to the 31st March, 1979. It is the admitted position that M/s. Gupta Brick Works, the petitioner, is an industrial unit which started production on the 1st January, 1971. However, it was not till five and a half years later that it was got registered as a small-scale industry by the Industries Department of the State Government on the 2nd July, 1976. It would appear that in this long interregnum the petitioner-firm did avoid the finalisation of its liability for general and special sales tax payable. The claim raised on its behalf is that it is retrospectively entitled to the benefit of the notification with effect from the 5th January, 1971 when it commenced production irrespective of the date of its registration much later.

(3.) The claim of the petitioner was rejected by the Commercial Taxes Tribunal, Bihar (vide annexure 6 dated 23rd March, 1980), which, following its earlier decision in Gayatri Mills v. State of Bihar in Revision Case No. 173 of 1975 dated the 4th September, 1976 held that the claim of exemption has to be calculated from the date of its registration as a small-scale industrial unit. The petitioner then moved the Tribunal for referring three questions of law to the High Court which was also rejected. However, the petitioner-assessee then moved the High Court under Section 33(2) which directed the Tribunal to refer the following questions of law and state a case which has been duly complied with :