Industrial tax exemption cannot be denied on hyper-technical registration timing when application was filed in time.

Sales tax exemption under the Bihar Industrial Policy, 1995 could not be denied on a narrow reading of the registration condition where the application for registration was filed before the cut-off date and the certificate was issued on that date. The policy had to be construed in light of its object of encouraging industrial investment, and exemption benefits were not to be defeated by hyper-technical objections when the unit had already applied in time and commenced production within the relevant period. The departmental rejection was found arbitrary, and the rejection orders were quashed with remand for fresh consideration.

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Issues: Whether the rejection of the petitioner's claim for sales tax exemption under the industrial policy on the ground that registration was not completed before the stipulated date was arbitrary and liable to be interfered with.

Analysis: The writ petition concerned denial of exemption benefits under the Bihar Industrial Policy, 1995 on a narrow and technical construction of the registration condition. The rejection was founded mainly on the fact that although the application for registration had been made before the cut-off date, the certificate was issued on the cut-off date itself. The policy had to be interpreted in the light of its object of encouraging industrial investment, and exemption provisions of this kind could not be defeated by hyper-technical objections when the application had already been submitted within time and the unit had gone into production within the relevant period. On that reasoning, the departmental approach was found to be arbitrary.

Conclusion: The rejection orders were held unsustainable and were quashed; the matter was remanded to the competent authority for fresh consideration.

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