Purposive interpretation of industrial exemption notification allowed machinery bought after production began to qualify for tax relief.

A beneficial sales tax exemption notification under section 4(2) of the Rajasthan Sales Tax Act, 1954 was construed purposively to cover machinery acquired for the same industrial project during the notification period. The phrase "setting up of industry" was held to describe a continuing process of establishing and completing the unit, not a fixed event ending on first commercial production. Because the notification did not use the words "new industry," machinery purchased after production had begun was not excluded merely on that ground. The later purchase therefore remained eligible for exemption, and the Revenue's challenge failed.

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Issues: Whether machinery purchased during the operative period of the exemption notification was entitled to tax exemption where the industrial unit had commenced commercial production earlier, and whether the expression "setting up of industry" in the notification excluded machinery acquired after commencement of production or only covered new industries.

Analysis: The notification under section 4(2) of the Rajasthan Sales Tax Act, 1954 was treated as a beneficial exemption provision intended to encourage industrial investment in specified industries. The expression "setting up of industry" was construed as denoting a continuing process of establishing and completing the industrial unit, not a rigid point-in-time event ending on the date of first commercial production. The absence of the words "new industry" in the notification was significant. The facts showed that the machinery was ordered for the same project and was received later during the life of the notification. The earlier commencement of production did not, by itself, exclude the later purchase from the exemption, and the reasoning favoured a purposive rather than narrow or pedantic interpretation.

Conclusion: The machinery purchase qualified for exemption under the notification, and the Revenue's challenge failed.

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