Non obstante clause in sales tax incentive rules requires deferment to be computed under the later fixed-capital regime, not incremental production.

A later industrial incentive policy and the corresponding amendment to the sales tax deferment rules shifted the benefit framework for units set up after 1 April 1996 from incremental production to fixed capital investment. The non obstante clause in rule 4-B was applied to override the earlier scheme under rule 4 and the incremental production formula, so the concession had to be computed under the later regime. Authorities could not import the earlier method to reduce the deferment, and proceedings based on non-filing of returns on that contrary basis were unsustainable. The petitioner was held entitled to sales tax deferment on total production under rule 4-B(1)(ii).

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Issues: Whether the petitioner was entitled to sales tax deferment on total production under the Industrial Policy, 1996 and rule 4-B(1)(ii) of the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991, and whether the action taken by the authorities by applying the concept of incremental production was lawful.

Analysis: The later industrial policy and the corresponding amendment to the rules shifted the incentive framework from incremental production to fixed capital investment for units set up after 1 April 1996. The non obstante clause in rule 4-B was held to override the earlier scheme under rule 4 and the incremental production formula contained in rule 4(3) and 4(4). On the plain language of the policy and rules, the benefit for the relevant category of units was to be computed with reference to fixed capital investment, and the authorities could not import the earlier concept of incremental production to reduce the concession. The consequential proceedings for non-filing of returns, which proceeded on the contrary basis, were therefore unsustainable.

Conclusion: The petitioner was held entitled to sales tax deferment on total production under rule 4-B(1)(ii), and the contrary action of the authorities was held unlawful.

Final Conclusion: The writ petition succeeded, and the petitioner obtained the benefit promised under the later industrial incentive regime, with the adverse departmental action set aside.

Ratio Decidendi: Where a later incentive policy and its enabling rule contain a non obstante clause and replace an earlier incremental-production scheme, the benefit must be computed according to the later regime and cannot be curtailed by importing the earlier method.

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