Non obstante incentive rules override earlier incremental-production criteria for sales tax exemption under the later policy.

A later incentive framework under the 1996 Policy replaced the earlier incremental-production scheme by linking sales tax exemption to additional fixed capital investment. Rule 4-B, inserted to implement that policy, operated with a non obstante clause and could not be led by rule 4(3) and rule 4(4) of the 1991 Rules. On that basis, incremental production could not be used to deny exemption under the 1996 Policy, and a certificate condition requiring separate accounts for the existing and expansion units was invalid because it conflicted with the governing policy and rules.

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Issues: (i) Whether the concept of incremental production under rule 4(3) and rule 4(4) of the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991 could be applied to sales tax exemption granted under the 1996 Policy and the Incentive Code, 1996; (ii) Whether the condition in the exemption certificate requiring separate accounts for the existing unit and the expansion unit was valid.

Issue (i): Whether the concept of incremental production under rule 4(3) and rule 4(4) of the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991 could be applied to sales tax exemption granted under the 1996 Policy and the Incentive Code, 1996.

Analysis: The 1996 Policy adopted a different incentive structure from the earlier policy regime and substituted the concept of incremental production with benefit linked to additional fixed capital investment. Rule 4-B of the 1991 Rules, inserted to give effect to the 1996 Policy, contains a non obstante clause and operates independently of the earlier incremental-production based mechanism in rule 4(3) and rule 4(4). On that scheme, the later provision prevails and the earlier rules cannot control exemption claims under the 1996 Policy.

Conclusion: The concept of incremental production under rule 4(3) and rule 4(4) could not be invoked against the assessee for exemption under the 1996 Policy and the Incentive Code, 1996.

Issue (ii): Whether the condition in the exemption certificate requiring separate accounts for the existing unit and the expansion unit was valid.

Analysis: The impugned condition was founded on an inapplicable incremental-production regime and was inconsistent with the 1996 Policy and the Incentive Code, 1996. Since the assessee's entitlement had to be determined under the later policy framework, the condition could not be sustained and was liable to be treated as contrary to the governing policy and rules.

Conclusion: The condition requiring separate accounts for the existing unit and the expansion unit was invalid and was quashed.

Final Conclusion: The writ petition succeeded, and the assessee obtained exemption without the disputed accounting condition.

Ratio Decidendi: A later non obstante provision enacted to implement a subsequent incentive policy overrides earlier incremental-production based rules, and exemption benefits must be determined under the governing later policy framework rather than by importing inconsistent conditions from the prior regime.

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