TaxTMI 
TaxTMI 
2010 (1) TMI 1136
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....sion of this deptt. Notification No. F.4(66)FDGr.IV/82-84 dated December 6, 1990 (S. No. 827), the State Government hereby exempts from tax, the sale of all plants and machinery for setting up of a new industry in Rajasthan, on the following conditions:- 1. that only those units which come into production between March 27, 1995 and March 31, 1997 shall be eligible to avail of this facility. 2. that such plant and machinery is sold to a manufacturer who holds a valid certificate of registration under the RST Act, 1954. 3. that the manufacturer so purchasing the plant and machinery furnishes to the selling dealer, a declaration in writing that the machinery shall be used in the setting up of a new industry in the State. 4. that the selling dealer holds a valid exemption certificate, for which a fixed annual fee of Rs. 100 is payable. 5. that the dealer claiming exemption proves to the satisfaction of the AA that he has neither charged nor demanded any tax on sale of such goods. This notification shall remain in force up to March 31, 1997." The learned counsel for the petitioner-assessee submitted that these two machines, namely, block dressing machine and transformer, though w....
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....from the State Electricity Board before the said cut-off date, as defined in the said proviso that the unit will be deemed to be set up before the said cut-off date February 15, 1997 if they have obtained the service connection from the State Electricity Board before the cut-off date. The units which had though set up their industries prior to said cut-off date and also applied for power connection to the State Electricity Board but were not given the service connection by the State Electricity Board prior to said cut-off date February 15, 1997 approached the court and when the matter reached before the apex court, the apex court held as under: "The notification dated January 31, 1995 must be interpreted in a broad based manner, as a promise was made to grant the concessional tariff not only for the new industries which were to be set up thereafter but also to the pre-existing industries. By the 1997 amendment, the right accrued to them is sought to be taken away with effect from February 15, 1997. After the 1997 amendment the concession is limited to industries set up before February 15, 1997. The term 'set up' has been explained as industries to which service connection has been....
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....ue that the exemption notification should receive a strict construction but it is also true that once it is found that the industry is entitled to the benefit of exemption notification, it would receive a broad construction." There is no dispute about the legal position that an exemption notification has to be strictly construed but once a unit or assessee falls within the four corners of an exemption notification, a liberal interpretation is called for. It is called "play in the joints". The notification in question before this court dated February 27, 1995 grants exemption from sales tax on plant and machinery for setting up new industrial units in respect of purchase of said plant and machinery. In the present case, the petitioner assessee had admittedly set up a new industrial unit for manufacture of marble slabs and tiles after installation of a gang saw machine and it appears that it also obtained the certificate from the concerned authority that it had commenced commercial production with effect from December 2, 1996. However, two machines included in the said project namely block dressing machine and transformer, orders for which were placed even prior to December 2, 1996,....
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....are a direct answer to the controversy in hand. In ACTO v. Shri Vijaya Industries, Kesarpura, Sheoganj [2007] 18 Taxup-Date 97, the facts were also similar to the one involved in the present case. The assessee had purchased some machineries by submitting declaration in form ST17 and claimed tax exemption benefit for the machineries purchased on December 28, 1987 and March 26, 1988. The assessing authority held that since the assessee started commercial production from the industrial unit prior to the purchase of the machineries on December 28, 1987 and March 26, 1988, therefore, the assessee in fact already set up the industrial unit and purchased the machinery for expansion of existing industry, as such, has not utilized the subsequently purchased machinery for setting up a new industrial unit and, therefore, the assessee is not entitled to the tax exemption benefit under Notification 575 dated September 25, 1985. Negativing the said contention of the assessing authority and learned counsel for the Revenue, this court held as under: ". . . in the order of the Deputy Commissioner (Appeals), it is clearly mentioned that the original plan of the assessee was to set up industry for ....
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....ke a narrow and pedantic approach in the matter and the beneficial legislation in the form of subordinate legislation contained in the notification in question does not call for any such narrow construction at all. . . 8. Be that as it may, since other facts are not in dispute that the machinery in question was purchased during the operative period of notification dated December 6, 1990 and the words 'new industry' are conspicuous by their absence in the notification dated December 6, 1990, the judgment relied upon by the learned counsel for the Revenue is of little help to the Revenue. On the contrary, the judgments relied upon by the learned counsel for the respondent in the case of Shurvi Colour Chem (P.) Ltd. reported in [1998] 3 STO 277 and ACTO, Ward 1, Sirohi v. Shri Vijaya Industries, Kesarpura, Sheoganj [2007] 18 Tax-up-Date 35 clearly support the contention raised by Mr. Mehta. The judgment of the learned single judge in Srinath Minerals' case (S.B. Sales Tax Revision No. 493 of 2000 decided on November 14, 2005) did not take into account earlier Division Bench decision of the Taxation Tribunal in Shurvi Colour Chem's case [1998] 3 STO 277. It is also distinguishable fro....