AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (3) TMI 1525
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent [2004] 138 STC 198 (Ker)) . Since the facts of the three original petitions are almost identical, for the purpose of these writ appeals, the facts as narrated in O. P. No. 32947 of 2000 are being referred to in this judgment. 3. According to the petitioner, his unit is run by a company incorporated under the Companies Act. It produces steel ingots and iron rods. It is a medium scale industrial unit. The unit was registered on September 6, 1991 as per exhibit P1 certificate. According to the petitioner, the motivation and incentive for setting up the unit was a notification issued by the State Government, offering tax exemption as per exhibit P2. The notification has been issued under section 10 of the Kerala General Sales Tax Act and it is a statutory notification. As per exhibit P2, the exemption is made available to various units for a period of seven years. It was acting on exhibit P2 that various units like the petitioner's unit were set up. The benefit under exhibit P2 notification can be taken aid of only from the date of commencement of production. The only restriction imposed was that the aggregate of the exemption contemplated under clause 4 of exhibit P2 shall no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndents therein to forward the application for exemption to the State Level Committee for consideration. The petitioner claims to have made a representation dated March 17, 1998 to the State Level Committee. Since no action followed either by the Director of Industries and Commerce or the State Level Committee in pursuance of the directions issued in the judgment in the abovesaid original petition, the petitioner had to move this court again by filing O.P. No. 24212 of 1999, seeking a writ of mandamus commanding the second respondent to act on the application of the petitioner. In the said original petition, the State took the stand that the Director of Industries and Commerce had sought for a clarification from the Government as to the eligibility of the units by the petitioner from sales tax exemption for the additional investment made by him, relying on the Government Orders dated November 26, 1993 and November 24, 1998. According to the petitioner, exhibit P9 GO has only prospective effect and it cannot apply to the unit of the petitioner. 5. According to the Director of Industries and Commerce, the petitioner's unit came to be included in the negative list on account of cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oing by the Government Orders dated 26.11.1993 and 24.11.1998, units like the petitioner's unit became ineligible for exemption as they had a consumption of power exceeding 2500 KVA. Thus, the State sought to sustain the rejection of exemption. The original petitions were heard jointly and the learned Single Judge accepted the contentions of the State and dismissed all the writ petitions. The petitioner carried the matter in respective writ appeals as already mentioned. The writ appeals were allowed and the State was directed to grant tax exemption to the petitioner. 10. The State took up the matter in appeal before the Apex Court as Civil Appeal Nos.8031, 8032 and 8033 of 2004. The contention taken by the appellants WA 991/03 & connected cases before the Apex Court was that clause 7 of the Government Order dated 27.11.1993 was a comprehensive one, covering various industries made mention of therein. The State contended that the exemption granted as per the notification dated 04.11.1993 i.e., Annexure-2, stood withdrawn by the issuance of the GO dated 27.11.1993. The Apex Court approved the GO dated 27.11.1993. The Apex Court also held that the GO dated 24.11.1998 had retrospe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of abundant caution, he had filed an appeal before the appellate tribunal as evident from Ext.P5. The petitioner claims similar benefits as the writ appellants in the writ appeal. 13. The learned senior counsel for the appellant Sri.S.Ganesh raised the following three points for consideration : WA 991/03 & connected cases (i) According to the learned counsel, in clause 7 of Annexure-8 Government Order, the latter portion should be read conjunctively and not distinctively. In other words, the word 'and' should be read as 'and' only and not as 'or'. (ii) Even assuming that it cannot be so done, the petitioner's unit having been registered before 31.12.1993, goes out of the negative list as stated in the notification as per clause 2 of the same notification. (iii) The authorities have understood the notification in a particular manner and have given effect to it. Almost all other units, except the petitioner's unit, have been given exemption and the petitioner's unit alone has been isolated and discriminated. That could not be done. The learned counsel for the appellant relied on the decisions in "Organo Chemical Industries v. Union of India (197....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he date of commencement of production. Clause 10 may also have some relevance. Sub-clause (iii) of Clause 10 reads as follows : "In the case of new industrial units other than public sector undertakings under medium and large scale industries, the aggregate exemption in respect of sales tax, purchase tax, surcharge and central sales tax together shall not exceed 100% of the fixed capital investment of the unit." 16. The next relevant GO is Annexure-8 dated 26.11.1993. It refers to the earlier Government orders. Annexure-8 GO happened to be issued due to power shortage and it was decided to withdraw all types of concessions to industrial units included in the negative list. This GO is of considerable importance in the present case. WA 991/03 & connected cases The contention is regarding the interpretation to be given to sub-clause 7 and clauses 2 and 3 of the said GO. They read as follows : "7. Power intensive units based on electro thermal/electro chemical processors or units where total power requirement exceeds 2500 KVA of contract load and where cost of power is more than 25% of cost of production of the items manufactured except where the units generate their power requirement....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd also asserts that the units that fall under the negative list will not be entitled to any exemption. However, it is significant to notice clause 3 which says that the units provisionally registered on or after 01.06.1993 will not be eligible for State Investment Subsidy, which indicates that those units which are registered before the said date will be entitled to that benefit. 19. In these cases, the interpretation to be given to clause 7 of Annexure-8 order comes up for consideration. As already noticed, clause 7 takes care of two situations. They are (1)In order to be excluded from the category of units, which are entitled to the subsidy and other benefits, the unit must be one based on electrothermal/electro-chemical processors and (2) units where the total power requirement exceeds 2500 KVA of contract load and where cost of power is more than 25% of cost of production of the items manufactured. However, units WA 991/03 & connected cases which generate the power requirement in excess of 2500 KVA of contract load by own captive power, are entitled to the benefit. 20. On a plain reading of the provision, it is clear that in the latter portion, in order to go outside the amb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re often used interchangeably. As a result of this common and careless use of the two words in legislation, there are occasions when the court, through construction, may change one to the other. This cannot be done if the statute's meaning is clear, or if the alteration operates to change the meaning of the law. It is proper only in order to more accurately express, or to carry WA 991/03 & connected cases out the obvious intent of the legislature, when the statute itself furnishes cogent proof of the error of the legislature and especially where it will avoid absurd or impossible consequences, or operate to harmonize the statute and give effect to all of its provisions." The above aspect was considered in a recent decision reported in Competition Commission of India v. Steel Authority of India (2010(10) SCC 744), wherein it was held as follows : "43. It is a settled principle of law that the words 'or' and 'and' may be read as vice versa but not normally. '.....You do sometimes read 'or' as 'and' in a statute..........But you do not do it unless you are obliged, because 'or' does not generally mean 'and' and 'and&#....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to note that in the former portion, the word 'or' is used and in the latter portion, 'and' is used. It is very clear that the delegatee was very cautious about the words used in the notification and if that be so, the word 'and' can be read only conjunctively. The learned counsel for the appellant is well founded in his submission that the word 'and' cannot be read as 'or'. It is also evident that the respondents became conscious of the anomaly and thereafter, by Annexure 27 dated 11.07.2000, they brought out a notification differently worded. It reads as follows : WA 991/03 & connected cases "7. Units having total connected load more than 2500 KVA and also units having total connected load less than 2500 KVA but cost of power is more than 25% of cost of production. The units having total connected load of less than 2500 KVA and cost of power/less than 25% of the cost of production will not come under the negative list. However, this is not applicable to those units generating their power requirements in excess of 2500 KVA of contract load by own captive power." But, this cannot govern the earlier notifications and Government Orders which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....connected cases 1.contemporanewa expositio (interpreting a statute or any other document by reference to the exposition it has received from contemporary authority) can be invoked though the same will not always be decisive of the question of construction (maxwell 12th ed. p.268). In Crawford on Statutory Construction (1940 ed.) in para 219 (at pp.393-395) it has been stated that administrative construction (i.e. contemporaneous construction placed by administrative or executive officers charged with executing a statute) generally should be clearly wrong before it is overturned; such a construction, commonly referred to as practical construction, although not controlling, is nevertheless entitled to considerable weight ; it is highly persuasive. In Baleshwar Bagarti v. Bhagirathi Dass the principle, which was reiterated in Mathura Mohan Saha v. Ram Kumar Saha has been stated by Mookerjee, J, thus : 'It is a well-settled principle of interpretation that courts in construing a statute will give much weight to the interpretation put upon it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it.... I do not suggest for a moment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts, there is no reason why the same should not be applied in the case of the petitioner also. 29. Accordingly, the appellant is entitled to succeed on all the three grounds in these writ appeals. In the result, 1) WA No.991/03 is allowed and the judgment in OP No.32947/00 is set aside. 2) Ext.P10 in OP No.32947/00 is quashed and the respondents are directed to reconsider the claim for exemption for the period sought for by the appellant in the petition in the light of the observations contained in this judgment. 3) WA No.1316/03 is allowed setting aside the judgment in OP NO.32807/00. Ext.P9 is quashed and the respondents are directed to reconsider the claim for exemption for the period 01.07.1995 to 31.03.1996 in accordance with the observations contained in this judgment. 4) WA No.1561/03 is allowed setting aside the judgment in OP No.23472/01, Ext.P8 is quashed and the respondents are directed to consider Ext.P6 application in the light of what is stated in the judgment in the writ appeal and in accordance with law. 5) WP(C) No.19516/09 is allowed, the impugned order is set aside and the respondents are directed to reconsider the claim made by the petitioner in the light o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ute that the commodity manufactured by the petitioner's unit is exigible to tax under the KGST Act. According to the petitioner, Annexure-2, having been issued under Section 10 of the KGST Act, is statutory in nature. In pursuance of the said notification, the petitioner applied for exemption and as per Annexure-3, he was granted exemption for a sum of Rs. 2,65,70,965/-. The exemption was to last for seven years from 1995 i.e., from 31.03.1995 to 30.03.2002. 6. Even during the pendency of the original application for exemption from payment of sales tax before the authority concerned, the additional capital investment of more than five crores was made by the petitioner. This resulted in enhancement of the power allocation to the tune of 4500 KVA. The application produced as Ext.P4 in the original petition was filed seeking exemption in respect of the additional capital investment made by the petitioner in relation to its unit. That application was rejected. The petitioner challenged the same in OP No.20154/98 before this court. That OP was allowed. The impugned order was set aside and the State Level committee was directed to reconsider the matter. The said order is produced as....