Gazetted government resolution continuing an incentive scheme was treated as a valid notification for sales tax exemption.

A Government resolution extending an earlier sales tax incentive scheme to 30 September 1979 was held to continue the exemption for a small-scale unit that began production on 22 August 1979. The earlier scheme contained no cut-off date restricting commencement of production, and the later resolution expressly carried forward the operative incentives. The objection that the resolution was not a valid notification failed because Gazette publication of a formal resolution issued in the Governor's name amounted to substantial compliance with the statutory notification requirement. Exemption provisions were also to be construed liberally in favour of the assessee.

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Issues: Whether Resolution No. 17767 dated 19 October 1979 continued the earlier incentives granted to newly set-up small-scale industrial units up to 30 September 1979 so as to entitle the unit, which commenced production on 22 August 1979, to sales tax exemption, and whether a Government resolution duly published in the Gazette could operate as a valid notification for that purpose.

Analysis: The earlier Government resolution granting incentives to registered small-scale industries provided tax relief in broad terms and contained no cut-off date restricting commencement of production. Resolution No. 17767 expressly referred to the earlier resolution and continued all incentive schemes operative till March 1979 up to 30 September 1979. On that reading, the earlier exemption scheme stood extended without importing any cut-off date. The contention that the resolution was ineffective because it was not a notification in the strict sense was rejected. Under the Bihar and Orissa General Clauses Act, 1917, a notification means a notification in the Gazette, and publication in the Gazette of a formal Government resolution issued in the name of the Governor amounted at least to substantial compliance with the statutory requirement. Exemption provisions were also required to receive a liberal construction.

Conclusion: The unit was entitled to sales tax exemption under the extended incentive scheme, and the objection based on the form of the resolution failed.

Final Conclusion: The impugned order denying exemption could not stand, and the matter required fresh assessment in light of the extended exemption scheme.

Ratio Decidendi: A Government resolution expressly continuing an earlier exemption scheme and published in the Gazette constitutes a valid notification for exemption purposes, and exemption provisions must be construed liberally in favour of the assessee.

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