TaxTMI 
TaxTMI 
1986 (1) TMI 366
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....mount of money to set up the small-scale industry but on account of imponderable factors the production could not be started prior to 22nd August, 1979. Later, the industries department granted a permanent certificate No. 03/01/02053 dated 27th August, 1979, specifically recording therein that production has started from 22nd August, 1979. 3. With a view to providing incentives for industrialisation in the State of Bihar, respondent No. 3 in exercise of the power conferred under section 4(3)(b) of the Bihar Sales Tax Act, 1959, issued Notification No. S.O. 353 dated 14th March, 1974, whereby it exempted from the levy of general sales tax, special sales tax and purchase tax and sales of such raw materials to the owner of a newly set-up small-scale unit approved and registered by the department of industry for a period of five years from the date the industry started its production (vide annexure 3 to the writ petition). Similar exemptions were granted or extended from time to time with regard to the sale and purchase of finished products, etc., by the newly set-up small-scale industries (vide annexures 4, 5 and 6). Particular reliance is then placed on annexure 7 dated 19t....
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....nits, which have gone into production after 1st July, 1976, will get exemption from tax only on the purchase of raw materials, but on the finished goods they will get interest-free loan equivalent to the annual tax paid to the commercial taxes department in terms of the order of assessment. On those premises, the impugned order (annexure 10) is defended as valid and in accordance with the earlier governmental notifications and resolutions. 4.. This case had originally came up before a Division Bench but apparently noticing the larger ramifications of the issue involved, the matter was referred to a larger Bench. 5.. Inevitably, the claim of the petitioner is embedded in the background of the concessions given to the newly set-up small-scale industrial units by the respondent-State of Bihar from time to time. However, the history of the exemptions of sales tax to the newly set-up small-scale industries need not be recounted in any great detail. Only, its fluctuating fortunes which disclose little method in the whimsicality of the grant and withdrawal of such exemptions at cryptic intervals may be briefly noticed. It would appear that the first notification in this context was ....
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....limitation of a cut-off date with regard to the commencement of production. It was pointed out that by annexure 7 express reference was made to this resolution and the benefits thereof in identical terms were extended till a further period of six months up to 30th September, 1979, till the matter was finally determined by the Government. Consequently, the petitioner, which admittedly started production on 22nd August, 1979, would squarely be within the ambit of annexure 7 and thus plainly entitled to exemption. 8.. There appears to be patent merit in the stand taken on behalf of the writ petitioner. It would appear that right from 1969 the State of Bihar, in order to promote industrialisation within its territory, was extending promises and benefits of various incentives for small-scale industries. The rationale for these incentives and their detail were recounted in the notified resolution of the Government of Bihar under the order of the Governor of Bihar in Resolution No. 16808 of 29th September, 1973, as follows: "GOVERNMENT OF BIHAR Department of Industries & Technical Education (Industries) Resolution No. 16808 dated the 29th September, 1973. Subject: Incentive fo....
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....tives to promote industrial development of the State. With regard to enforcement of the previous resolutions up to 30th September, 1979, for the year 1979-80, being ineffective since 31st March, 1979: With a view to promoting the industrial development of the State different types of incentives were given for making various facilities available to small/ large/medium/sick and closed industries and Engineer entrepreneurs during the plan period of 74-75 and 78-79 in the Fifth 5-Year Plan, the description of which, in various resolutions, is available in the enclosed appendix. 2.. The incentives as described in the enclosed appendix have become ineffective since 31st March, 1979. The nature of incentives to be given to industries after the Sixth 5-Year Plan period of 1978-79 is being determined. In the meantime the Government has taken the decision that all incentive schemes having been operative till March, 1979, be continued as such till 30th September, 1979. 3.. The concurrence of the Finance Department and the Planning Department has already been obtained.................... Description of the enclosures on records: -----------------------------------------------....
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....trictu sensu which could exempt the petitioner from the incidence of sales tax. Reference was made to section 4(3) of the 1959 Act and section 7 of the Bihar Finance Act, 1981, which provide that the State Government may, by notification and subject to such conditions and restrictions, as it may impose, exempt from the levy of the general sales tax or special sales tax or both or the levy of purchase tax, etc. It was submitted that unless the notification was made under the aforesaid sections and by express reference thereto, there could be no valid exemption in the eye of law. 12.. Though the aforesaid contention may bring some credit to the ingenuity of the learned counsel for the respondent-State, it nevertheless is fallacious. The Bihar and Orissa General Clauses Act, 1917, defines the "notification" under section 4(36) thereof in the following terms: "'Notification' shall mean a notification in the Gazette." Section 28 of the aforesaid Act then sanctifies the publication of orders and notifications in the Gazette in the following terms: "Where in any Bihar and Orissa Act or Bihar Act or in any Rules made under any such Act, it is directed that any order, notificati....
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....the administrative authorities or the courts should not whittle down the plenitude of the exemption or relief granted by Parliament, by laying stress on any ambiguity here or there." Both on principle and precedent, it has, therefore, to be held that a formal resolution of the Government duly published in the official Gazette under the name and order of the Governor would squarely come within the ambit of "notification". Consequently, the petitioner would be clearly entitled to the exemption under annexure 7. 13.. In fairness to Mr. Rajgarhia, the learned counsel for the petitioner, it must be noticed that he also relied on the doctrine of promissory estoppel as against any hyper-technical objections raised on the point that annexure 7 was not a notification. It was his case that the respondent-State had expressly held out a promise of exemption to the newly set-up small-scale industries on the basis of which the petitioner had materially changed its position by setting up the industry within the State of Bihar and the latter could not be allowed to go back on its own decision and resolution duly published in the Gazette in the name of the Governor of the State on such pettif....