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Syed Shah Mohammed Quadri, J.—In these cases WP MPs and MV MPs have come up for hearing. As the argument in the main Writ Petitions, WP MPs and MV MPs is one and the same, the learned Counsel appearing for both the parties have requested that the main Writ Petitions may be disposed of. Accordingly they are heard together and are being disposed of by a common judgment.
In these cases interpretation of G.O.Ms.No. 117, Industries & Commerce (IFR) Department, dated March 17,1993 falls for consideration of this Court.
For appreciating the question involved in these Writ Petitions, we shall refer to the facts in Writ Petition No. 27493 of 1996. The petitioner is a medium scale industrial unit set up at Gudivada for the manufacture of cotton yarn which commenced its commercial production on April 7, 1995. It is also registered as a dealer with the first respondent. The Government of Andhra Pradesh issued orders to provide incentives for newly set up industries in the said G.O.Ms.No. 117, dated March 17,1993. The petitioner was sanctioned sales tax deferment amounting to Rs. 1,70,11,600/- for a period of 10 years commencing from April 7,1995 (which is the date of commencement of the commercial production) under the said G.O. The petitioner was called upon to pay a tax of Rs. 15,48,639/- on the ground that the deferment of sales tax does not apply to purchase of raw material, viz., cotton, which is liable to be taxed at the point of last purchase in the State.
Initially the Writ Petition was filed challenging the order of the revisional authority in not granting stay of recovery of the tax in demand. Subsequently the petitioner filed WP MP No. 35412 of 1996 seeking amendment of the prayer in the Writ Petition, viz., for issue of a Writ of Certiorari to call for the records relating to the order dated July 1,1996 passed in file No. 73/96-97 (95-96) and to declare that the sales tax deferment granted by the fourth respondent in the final eligibility certificate No. 20/3/5/1607 dated November 8, 1995 for an amount of Rs. 1,70,11,600/- on cotton yarn includes the tax payable on the cotton at the purchase point in terms of G.O.Ms.No. 117, dated March 17,1993, referred to above.
The Assistant Commissioner (CT) (Int.) filed counter affidavit for the respondents admitting that the petitioner is entitled to the benefit of the incentive offered by the Government in G.O.Ms.No. 117, dated March 17,1993. He submits that the concessions with regard to sales tax are given only on the sale of goods manufactured by the petitioner and that the petitioner is not entitled to the same benefit on the sale or purchase of the raw material which would go into the manufacture of finished products. It is not disputed that the sales tax means a tax either on sale or purchase of goods but it is clarified that the scheme of the Andhra Pradesh General Sales Tax Act, 1957 (for short "the Act") makes a distinction with reference to the fixed point of levy of tax and also specified as to whether the levy is at the point of sale or purchase.
Mr. S.Krishna Murthy, the learned Counsel who leads the batch of these Writ Petitions, vehemently contends that the words, in G.O.Ms.No. 117, "on products manufactured in the New Industrial Units" include all steps in the process of manufacture and consequently the benefit of deferment of tax is also available on all the items of the raw material which would go into the manufacture of final products by the petitioner; as the end products are exempted by the Government by the notification in G.O.Ms.No. 117, dated March 17,1993 and if the petitioner exports goods he is entitled to exemption, therefore, unless those words are given the meaning to include the purchases made by the petitioner it would be of no avail to the petitioner and other units and that such an interpretation would obviously be contrary to the intention of the Government and the scheme offered by the Government. Had the intention of the Government been, submits the learned Counsel, to limit the benefit of deferment of tax only on the sale of the ultimate product manufactured by the petitioner, the Government would have used the expression "end product"; for this reason also the petitioner is entitled to deferment of tax on the purchase of raw material.
Mr. Raji Reddy, the learned Counsel appearing for the petitioners in W.P.Nos.20197/96,20207/96 and 27567/96, submits that the final eligibility certificate granted to the petitioner does not specify that deferment of tax is confined to only the sales tax, so it should be deemed that it also includes tax payable on the purchase of the raw material by the petitioner. The other contention of Mr. Raji Reddy is that in case payment of the purchase tax is not deferred, it would go into the pricing structure of the products making them less competitive in the market and thus the purpose of the G.O will be frustrated.
Mr. Murali Krishna who appeared for Mr. A. Sudershan eddy, adds that having regard to the wording of G.O.Ms.No. 117 dated March 17,1993 the scheme of incentive and the purpose for which the incentives are granted, the tax paid by the units on purchase of raw material should also be treated on par with the tax payable by the units on the sale of the products manufactured by them.
We have given our anxious consideration to the submissions made by the learned Counsel but we are not persuaded to accept any one of them. Let us now look to the scheme envisaged under G.O.Ms.No. 117, dated March 17, 1993. The said G.O., in so far as it is relevant for our purpose, reads as follows:
"GOVERNMENT OF ANDHRA PRADESH ABSTRACT
INDUSTRIES - NEW COMPREHENSIVE SCHEME OF STATE INCENTIVES FOR SETTING UP OF NEW INDUSTRIES IN ANDHRA PRADESH - ORDERS - ISSUED.
INDUSTRIES & COMMERCE (IFR) DEPARTMENT.
G.O.Ms.No. 117, Dt 17-3-1993 Read the following:-
G.O.Ms.No. 498, Inds. & Com(IA) Department, dated 16-10-89.
G.O.Ms.No. 146, Ind & Com(IFR) Department, dated 25-4-91.
G.O.Ms.No. 311, Ind & Com(IFR) Department, dated 30-8-91.
Govt. Memo No. 2125/IA/89-1 dt.15-9-90.
G.O.Ms.No. 654, Ind & Com(II&CP) Department, dated 13-7-76.
A.P. State Electricity Board, B.P.Ms.No. 691 Commercial, dt. 10-8-76.
G.O.Ms.No. 379, Ind & Com(IA) Department, dated 27-7-89.
G.O.Ms.No. 305, Ind & Com(IFR) Department, dated 27-8-91.
Govt. Memo No. 1521/IFR/91-4 dated 19-8-.
ORDER:
Government have introduced in Liberalised State Incentive Scheme for setting up new Industries in the State of Andhra Pradesh vide G.O. 1st read above for a period of three years with effect from 3-10-89. Govt. have also announced a scheme of special incentives for new small scale industries to be set up by entrepreneurs belonging to S.C. and S.T. categories in the G.O 3rd above for a period of 3 years with effect from 3-10-89. In the G.O. 5th read above, an incentive by way of 25% rebate in power charges (demand and energy) for the 1st three years from the date of commercial production was being allowed to new industries through A.P. State Electricity Board. This rebate was however not available for the product lines include as ineligible list.
In their New Industrial Policy Statement 1992 announced in May 1992, the Government have proposed to extend the general incentives scheme as in the G.O 1st read above and also the Special Scheme of State Incentives for Scheduled Castes and Scheduled Tribe Entrepreneurs till the end of 8th Plan period i.e., upto 31-3-1997.
After careful review and examination of the package of incentives, Government have decided to introduce certain modifications in order to accelerate Industrial Development in the State, the details of which are specified hereunder.
All the districts in the State have been grouped into three Areas for the purpose of incentives as hitherto before.
AREA-I Srikakulam, Ananthapur and Adilabad Districts. AREA-II Nalgonda, Mahaboobnagar, Warangal, Khammam, Medak, Karimnagar, Nizamabad, Kurnool, Cuddapah, Chittoor, Nellore, Viziaanagaram and Prakasam Districts. AREA-III Visakhapatnam (except Visakhapatnam Municipal Corporation limits), East Godavari, West Godavari, Krishna (except Vijayawada Municipal Corporation limits) Districts. Guntur/R.R.Dist/Hyderabade xcept Hyderabad Municipal Corporation limit) Districts.
The following are the concessions under this New Comprehensive Scheme:
(A) XX XX XX XX XX (B) Deferment/Tax Holiday on Sales Tax:
Sales Tax percentage of Department/Tax Holiday and period (on products manufactured in the New Industrial Units)
(i) Medium and Large Scale Industries - Sales Tax Department:
Area I Deferment limited to 100% of fixed capital cost in a period of 10 years. Area II Deferment limited to 75% of fixed capital cost in a period of 10 years. Area III Deferment limited to 50% of fixed capital cost in a period of 10 years. XX XX XX XX XX XX (BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)
M.V.Natarajan& & & & & & & & & & & & & & Principal Secretary to Government."
The petitioners fall under Para 5 (B) Area III. The benefit to which they are entitled, consists of deferment of sales tax on the sales of the products manufactured in the New Industrial Units limited to 50% of the fixed capital cost in a period of 10 years. To claim the benefit conferred under the said G.O. the Unit will have to obtain eligibility certificate from the Industries Department. The final eligibility certificate specifies the quantum of the tax which can be deferred for a period of 10 years. It is plain that the new comprehensive scheme contemplates giving the concession of postponing the payment of sales tax on the product manufactured in the New Industrial Units (medium and large scale industries) for a period of 10 years so as to enable them to establish themselves and compete with other industries.
Mr. Krishna Murthy, however, relies on the judgment of the Supreme Court in Collector of Central Excise v. Protein Products of India Ltd., (1989) S.T.C. 98 (SC) and submits that the word "product" has to be construed widely so as to include the raw material which goes into manufacture of end products. In that case the meaning of the expression "bone products", for purposes of Central Excises and Salt Act, 1944, fell for consideration of the Supreme Court. The question was whether ossein obtained from bones by dissolving the mineral part of bones with phosporic acid and gelatine prepared by treating ossein further with alkali were "bone products" on which exemption from payment of excise duty was available under notification dated June 30,1979 issued under the said Act. It was held that the meaning of that expression was not restricted to primary products obtained by crushing bones such as bone meal but extended to anything produced or obtained from bones whether such derivation was by a simple physical process or by a chemical reaction. The view taken by the Tribunal that ossein and gelatine were exempt, was upheld. This judgment, in our view, does not advance the case of the petitioners.
The learned Counsel then relied on a judgment of the learned single Judge of Karnataka High Court in Anitha Cashew Industries Vs. Commercial Tax Officer, II Circle, Udupi and another, . In that case a notification issued by the Karnataka Government exempted taxes on the turn over of goods manufactured in Karnataka and sold by all tiny-sector industrial units. The petitioner, a tiny sector industrial unit, purchased raw cashew nuts from unregistered dealers and converted them into cashew kernels and sold the same. Under the Karnataka Sales Tax Act cashew Kernel pressed out of tax suffered cashew was exempt from levy of tax at the sale point. The petitioner claimed exemption under the notification on its purchase turnover of raw cashew nuts on the ground that under the said Act all manufacturers of cashew kernel would be exempt from tax on their sales turnover, therefore the petitioner would derive no benefit under the notification in question. That contention found favour from the learned single Judge who held that the expression "on the turn over of goods manufactured and sold by tiny-sector industrial units" should be so interpretted having regard to the object of extending tax concession to tiny-sector unit that they would be eligible for exemption from all taxes payable under the Act. With respect to the learned Judge, we are unable to agree with the reasoning and the conclusion reached by him. Merely because the petitioner gets no benefit under the CO., is no ground to grant a benefit which the G.O itself does not purport to grant.
Relying on the said judgment the learned Counsel emphasises that as the product manufactured by the petitioner would get exemption in the event of export under the Act itself or otherwise under some other G.Os of the Government, therefore the benefit of the G.O must be extended to the purchase tax payable on the raw material. This, in our view, would amount to rewriting the G.O which is impermissible.
In our view the principle of beneficial construction does not permit rewriting of the notification by including a benefit which is not available on the plain and clear wordings of the notification.
The learned Counsel then contended that the Courts should so interpret taxing statutes or notifications as to ensure that the object of the G.O is achieved and the benefit is received by the newly established units. He relied on the observation of the Supreme Court in I.T. Commissioner, Bangalore v. J.H. Gotla, .
Para 46 of the said judgment reads thus:
"Where the plain literal interpretation of a statutory provision produces a manifestly unjust result which could never have been intended by the Legislature, the Court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce a rational construction. The task of interpretation of a statutory provision is an attempt to discover the intention of the Legislature from the language used. It is necessary to remember that language is at best an imperfect instrument for the expression of human intention. It is well to remember the warning administered by Judge Leard Hand that one should not make a fortress out of dictionary but remember that statutes always have some purpose of object to accomplish and sympathetic and imaginative discovery is the surest guide to their meaning."
The principle of literal interpretation of beneficial legislation would arise only when the plain reading of the wording of the statute produces manifestly unjust result - result which should never have been intended by the Legislature-but where the plain reading leads to a definite conclusion which results in excluding persons falling in the category of the petitioners, it cannot be said that it is producing manifestly unjust result. It only means that the petitioners or those falling in that category are not the beneficiaries of the G.O. So when the language itself is plain and does not include the benefit claimed by the petitioner, on the ground that the petitioner falls within the category of the persons who are in the contemplation of the authority issuing the notification, the same cannot be extended to him on the principle of liberal construction. Here we would do well to remind ourselves of the observation of the Supreme Court in a recent pronouncement in State Level Committee and another Vs. M/s. Morgardshammar India Ltd., . In that case the Supreme Court observed:
"The choice between a strict and liberal construction arises only in case of doubt in regard to the intention of the Legislature manifest on the statutory language. Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute. If the words are plain and clear and directly convey the meaning, there is no need for any interpretation."
Keeping the above principle in mind while interpretting the above CO., we have no hesitation in holding that the benefit of deferment of tax on purchase of raw material to be used in the manufacturing process of the product by the petitioner, is not the subject matter of the G.O. and the benefit of deferment of tax does not cover purchase tax on the raw material used in manufacturing the products by the units.
For the above reasons we find no illegality in the impugned order. The Writ Petitions fail; they are accordingly dismissed, but in the circumstances of the case there will be no order as to costs.