Purposive construction of industrial incentive notifications sustained sales tax exemption for ownership of the factory building alone.

Incentive notifications under the Industrial Policy, 1995 were construed purposively, and entitlement to sales tax exemption was held to arise where the unit had exclusive ownership of the factory building even without ownership of the underlying land. The Court also held that the writ petition was maintainable despite the Bihar Finance Act, 1981, because the revisional power under section 46 was treated as a suo motu power of the Commissioner, not a remedy available as of right, and the dispute turned on interpretation of the policy on largely undisputed facts. The exemption claim was upheld, the adverse order was set aside, and the refundable tax amount was directed to be adjusted against future liability.

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Issues: (i) whether the writ petition was maintainable notwithstanding the existence of a revisional remedy under the Bihar Finance Act, 1981; (ii) whether the petitioner was entitled to sales tax exemption under the Industrial Policy, 1995 and Notifications S.O. Nos. 478 and 479 dated 22 December 1995 on the basis of its ownership of the building and the leasehold position of the land.

Issue (i): maintainability of the writ petition despite the alleged alternative remedy under the Bihar Finance Act, 1981.

Analysis: The revisional power under section 46 of the Bihar Finance Act, 1981 was treated as a suo motu power of the Commissioner, not as a statutory appeal or revision available as of right to the petitioner. The dispute involved interpretation of the relevant policy and notifications on largely undisputed facts, and the exemption period was nearing expiry. In those circumstances, the existence of an alternative remedy did not justify refusal of writ jurisdiction under Article 226 of the Constitution of India.

Conclusion: The writ petition was maintainable, and the preliminary objection was rejected.

Issue (ii): entitlement to exemption under the Industrial Policy, 1995 and Notifications S.O. Nos. 478 and 479 dated 22 December 1995.

Analysis: The notifications were construed in light of the incentive-oriented object of the Industrial Policy, 1995. On that construction, the first limb of the notification was not confined to absolute ownership of both land and building; ownership of the building in which the unit was installed was sufficient. The petitioner had constructed and owned the factory building and the occupation of the land was permissive through the joint venture arrangement. The Court held that this satisfied the first limb of the notification. The alternative lease-based claim failed because the petitioner itself was not a partnership or a holding-company situation within the language of the notifications, and no registered lease for the requisite period stood in its favour.

Conclusion: The petitioner was entitled to the exemption on the basis of exclusive ownership of the building, and not on the lease-based limb of the notifications.

Final Conclusion: The exemption claim was upheld, the impugned order was set aside, and the refundable tax amount was directed to be adjusted against the petitioner's future sales tax liability.

Ratio Decidendi: Incentive notifications meant to promote industrial development should receive a purposive and not unduly restrictive construction, and entitlement may arise where the unit satisfies the express condition of exclusive ownership of the building even if it does not own the land beneath it.

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