TaxTMI 
TaxTMI 
2014 (3) TMI 905
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the respondent-assessee's application for grant of eligibility certificate for exemption from payment of Central Sales Tax and Rajasthan Sales Tax to the State Level Screening Committee, Jaipur under the "Sales Tax New Incentive Scheme for Industries, 1989" (for short "the Scheme"). 4. For convenience of discussion, we would first notice the relevant scheme and certain provisions and thereafter proceed towards analysis of the facts in the instant case. The Scheme for exemption from payment of sales tax was notified by the State of Rajasthan in exercise of its powers under sub-section(2) of Section 4 of the Rajasthan Sales Tax Act, 1954 (for short, "the Act"). The scheme exempts certain industrial units from payment of tax on the sale of goods manufactured by them within the State. It specifies and categorizes the districts, types of units, the extent of exemption from tax (in percentage), the maximum exemption available in terms of percentage of fixed capital investment (FCI) and the maximum time limit for availing such exemption from tax. By introducing a deeming clause, the scheme is deemed to have come into operation with effect from 05.03.1987 and to remain in force upto ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed capital investment; and technical know-how fees or drawing fees paid in lump-sum to foreign collaborators or foreign suppliers as approved by Government of India or paid to laboratories recognized by the State Government or Central Government and Rail Sidings, rolling stock, racks and railway engines, owned by the unit. 8. Clause 2(i) defines 'Prestigious Unit'. The same is as under:- "Prestigious Unit" means a "new industrial unit" first established in any Panchayat Samiti of the State during the period of this Scheme in which investment in fixed capital exceeds Rs. 10/- cores with a minimum permanent employment of 250 persons or a "new industrial unit" having a fixed capital investment exceeding Rs. 25.00 crores and with a minimum permanent employment of 250 persons or a new electronic industrial unit having fixed capital investment exceeding Rs. 25/- crores'. 9. The definition is in three parts. The first part speaks of a 'New Industrial Unit' first established in any Panchayat Samiti of the State. The establishment is of the unit during the period of the Scheme. The investment in fixed capital must exceed Rs. 10/- crores and lastly the industrial unit has minimum pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....60/- Lakhs, a Medium Scale Unit means a unit of which the project cost does not exceed Rs. Five Crores and Large Scale Unit means a unit of which the project cost exceeds Rs. Five Crores. 13. Clause 3 of the notification speaks of applicability of the Scheme. By this clause, the State Government has made the Scheme applicable to (a) new industrial units, (b) industrial units going in for expansion or diversification and (c) sick units. 14. Clause 4 of the Scheme provides for exemption from Payment of Sales Tax as per parameters mentioned in Annexure 'C' to the said notification. This clause also envisages that the industrial unit which is granted an eligibility certificate by the Screening Committee is alone exempted to claim benefit of this notification. 15. Annexure 'C' provides for the quantum of sales tax exemption under the Scheme. Para C therein is relevant for the purpose of this case, therefore, omitting what is not necessary is extracted hereunder:- ANNEXURE 'C' QUANTUM OF SALES TAX EXEMPTION UNDER THE NEW INCENTIVE SCHEME Item No. Type of Units Extent of the percentage of exemption from tax Maximum exemption in terms of percentage of fixed capit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s units (Other than cement units except in Tribal Sub-plan Area) 90% of total tax liability 100% of FCI Eleven years 6. 100% Export Oriented Prestigious/ Pioneering units 100% of total tax liability 100% of FCI Nine years 7. 100% Export Oriented Very Prestigious Units 100% of total tax liability 100% of FCI Eleven years 16. As we have observed earlier, Annexure-C has five columns. The second column speaks of type of units, the third column speaks of the extent of percentage of exemption from tax, the fourth column provides for the maximum exemption in terms of percentage of FCI and the fifth and the last column provides the maximum time limit for availing exemption from tax. Prior to issuance of notification dated 13.12.1996, Annexure 'C' was primarily confined to 'New Units'. After the introduction of notification dated 13.12.1996, the exclusion is made to the expression 'New Units' by specifically including certain type of industrial units by inserting items 1A to 1F. Item 1E specifically talks of New Cement Units except in Tribal Sub-Plan area. The extent of percentage of exemption from tax under Item 1E depends on the type of unit or th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an, learned senior counsel appearing for the appellant submits that the case pleaded by respondent-unit right from the beginning of filing the application before the State Level Screening Committee was that the new unit had made an investment of more than Rs. 500/- crores by way of fixed capital assets and therefore they should be placed under the category of 'Prestigious Unit' and accordingly be granted eligibility certificate to claim 75% of exemption from tax for the maximum time limit provided under the Scheme. In aid of this submission, the learned senior counsel would draw our attention to the application and the accompanying affidavit filed by the respondent-new unit before the State Level Screening Committee. He would further contend that the respondent-unit before all the authorities below including the High Court had adopted the stand that the fixed capital investment excluding investment made before 05.03.1987 was more than Rs. 532/- crores and therefore the respondent-unit is a Prestigious Unit entitled to an exemption of 75% of total tax liability. It is further contended that the respondent-new unit being New Cement Unit and further being large scale unit though can a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nchayat Samiti, Pindwara and commenced commercial production some time in the year 1997. It engaged itself in the manufacture of cement. The total capital investment - (FCI) in the new industrial unit claimed by the Company was Rs. 53252.87 Lakhs (Rs.532.52/- crores) 25. The Company had applied for grant of Eligibility Certificate for exemption from payment of Central Sales Tax and Rajasthan Sales Tax before the State Level Screening Committee, Jaipur, under the Scheme. However, the Screening Committee accepted only Rs. 5553.72 Lakhs (Rs.55.32 crores) as FCI eligible for availing the benefits under the Scheme. On the aforesaid basis the State Level Screening Committee certified that the company is entitled to avail exemption of tax to the extent of 25% of the tax liability by treating the same to be a Large Scale Industry. In the appeal, the Board took the view since the Company had invested more than Rs. 25 crores and has employed more than 250 workmen, it has the status of `New Prestigious Unit' and thus, falls within the definition of a Prestigious Unit and should be governed by Item 4 of Annexure `C' being entitled to avail 75% of total tax liability. This view, as we have a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute- maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place." 29. It is well established that when a general law and a special law dealing with some aspect dealt with by the general law are in question, the rule adopted and applied is one of harmonious construction whereby the general law, to the extent dealt with by the special law, is impliedly repealed. This principle ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tent in substance, is capable of reasonable and sensible application without extending to the case in question, it is prima facie to be construed as not so extending. The special provision stands as an exceptional proviso upon the general. If, however, it appears from a consideration of the general enactment in the light of admissible circumstances that Parliament's true intention was to establish thereby a rule of universal application, then the special provision must give way to the general." 32. The question in Seward v. Owner of the "Vera Cruz", (1884) 10 App Cas 59 was whether Section 7 of the Admiralty Court Act of 1861, which gave jurisdiction to that Court over "any claim for damage done by any ship" also gave jurisdiction over claims for loss of life which would otherwise come under the Fatal Accidents Act, 1846. It was held that the general words of Section 7 of the Admiralty Court Act did not exclude the applicability of the Fatal Accidents Act and therefore, the Admiralty Court had no jurisdiction to entertain a claim for damages for loss of life. 33. The adoption of the aforesaid rule in application of principle of harmonious construction has been explained b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not find support in either principle or authority. The rule that general provisions should yield to specific provisions is not an arbitrary principle made by lawyers and Judges but springs from the common understanding of men and women that when the same person gives two directions one covering a large number of matters in general and another to only some of them his intention is that these latter directions should prevail as regards these while as regards all the rest the earlier direction should have effect. In Pretty v. Solly (quoted in Craies on Statute Law at p.m. 206, 6th Edn.) Romilly, M.R., mentioned the rule thus: "The rule is, that whenever there is a particular enactment and a general enactment in the same statute and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply." The rule has been applied as between different provisions of the same statute in numerous cases some of which only need be mentioned: De Winton v. Brecon, Churchill v. Crease, United States v. Chase and Carroll v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." To this may be added a rider: in a case of reasonable doubt, the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. "The underlying principle is that the meaning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any notions which may be entertained by the court as to what is just or expedient." The expressed intention must guide the court. Another rule of construction which is relevant to the present enquiry is expressed in the maxim, generalia specialibus non derogant, which means that when there is a conflict between a general and a special provision, the latter shall prevail. The said principle has been stated in Craies on Statute Law, 5th Edn., at p. 205, thus: "The rule is, that whenever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade provision for it, the presumption is that a subsequent general enactment is not intended to interfere with the special provision unless it manifests that intention very clearly. Each enactment must be construed in that respect according to its own subject-matter and its own terms." 39. In Ashoka Marketing Ltd. v. Punjab National Bank, (1990) 4 SCC 406 this Court has placed reliance upon Bennion, Statutory Interpretation (supra) and J.K. Cotton Spinning & Weaving Mills case (supra), amongst others, and explaining the rationale of this rule has reiterated the law as under: "52. In U.P. State Electricity Board v. Hari Shanker Jain this Court has observed: "In passing a special Act, Parliament devotes its entire consideration to a particular subject. When a general Act is subsequently passed, it is logical to presume that Parliament has not repealed or modified the former special Act unless it appears that the special Act again received consideration from Parliament." 53. In Life Insurance Corporation v. D.J. Bahadur Krishna Iyer, J. has pointed out : "In determining whether a statute is a special or a general one, the focus must be on the principal subject matter pl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the other direction. This rule is particularly applicable where the legislature has enacted comprehensive scheme and has deliberately targeted specific problems with specific solutions. A subject specific provision relating to a specific, defined and descriptable subject is regarded as an exception to and would prevail over a general provision relating to a broad subject. 43. In the instant case, the item 1E is subject specific provision introduced by an amendment in 1996 to the Scheme. The said amendment removed "new cement industries" from the non-eligible Annexure-B and placed it into Annexure-C amongst the eligible industries. It classified the cement units for eligibility of tax exemption into three categories: small, medium and large. The said categories are comprehensive whereby small and medium cement units have been prescribed to have maximum FCIs of Rs. 60/- lakhs and Rs. 5/- crores, respectively and large to be over the FCI of Rs. 5/- crores. The maximum ceiling for large cement units has been purposefully left open and thereby reflects that the intention clearly is to provide for an all-inclusive provision for new cement units so as to avoid any ambiguity in deter....