Sales tax exemption period begins with commercial production, not provisional certification, to preserve the intended industrial incentive.

A sales tax exemption for small-scale industry is construed purposively to give a real incentive from the point when the unit begins commercial production. A provisional certificate serves preliminary set-up and financing purposes and does not mark the operational stage for exemption purposes. Because starting the exemption period from the provisional certificate would reduce the promised benefit and defeat the policy objective, the exemption runs from commencement of commercial production unless the statutory language clearly states otherwise.

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Issues: Whether the period of exemption from sales tax under the exemption notification runs from the date of issue of the provisional certificate or from the date of commencement of commercial production.

Analysis: The exemption notification granted five years' benefit from the date of certification of the unit by the Director of Industries. Read in the context of the industrial policy, the object of the concession, and the related policy language referring to commercial production, the provision was construed to give a real and substantial incentive to a unit ready to commence production. A provisional certificate serves preliminary purposes such as obtaining finance and taking setting-up steps, and not the operational stage when raw materials are actually required. A construction starting the period from the provisional certificate would shorten the promised benefit and defeat the purpose of the exemption.

Conclusion: The exemption period commences from the date of commencement of commercial production, and not from the date of issue of the provisional certificate.

Final Conclusion: The petitioner was entitled to sales tax exemption on raw materials for five years from the date commercial production began, and the retained tax amount was refundable.

Ratio Decidendi: A sales tax exemption meant to promote small-scale industry must be construed purposively so that the exemption period begins when the unit commences commercial production, unless the statutory language clearly provides otherwise.

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