S. C. AGRAWAL J. - (1.) THESE writ petitions raise common questions for consideration and, therefore, they are being disposed of by a common order. In sub-section (2) of section 4 of the Rajasthan Sales Tax Act, 1954, it has been provided that where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, the State Government may, by notification in the Official Gazette, exempt, whether prospectively or retrospectively, from tax the sale or purchase of any goods or class of goods or any person or class of persons on such conditions and on payment of such fee as may be specified in the notification. Similar provision with regard to grant of exemption from Central sales tax is contained in sub-section (5) of section 8 of the Central Sales Tax Act, 1956. In exercise of the aforesaid power conferred by sub-section (2) of section 4 of the Act and sub-section (5) of section 8 of the Central Sales Tax Act, the State Government issued two notifications dated 23rd May, 1987 whereby it introduced two Schemes called the "sales Tax Incentive Scheme for Industries, 1987" (hereinafter referred to as "the Incentive Schemes" ). The Incentive Scheme under section 4 (2) of the Rajasthan Sales Tax Act has been issued in order to exempt industrial units from payment of tax under the Rajasthan Sales Tax Act on the sales of the goods manufactured by them within the State, in the manner and to the extent and for the period as covered by the notification. The Incentive Scheme under section 8 (5) of the Central Sales Tax Act has been issued in order to exempt industrial units from payment of tax under the Central Sales Tax Act on the sales made in the course of inter-State trade or commerce of the goods manufactured by them within the State, in the manner and to the extent and for the period as covered by the notification. Both the Incentive Schemes introduced by the said notifications came into operation with effect from 5th March, 1987 and are to remain in force up to 31st March, 1992. The provisions of the Incentive Schemes are identical and they are applicable in the areas mentioned in annexure A to the notifications to new industrial units, industrial units covered by 1985 dispensation, sick units and to expansion and diversification of existing units. Under clause 4 of the Incentive Schemes the industrial unit which is granted eligibility certificate under the abovementioned notifications is exempted from payment of tax on sales made within the State of the goods manufactured by it. The quantum of sales tax exemption and the period of eligibility of exemption are prescribed in annexure C to the Incentive Schemes. Clause 7 of the Incentive Schemes makes provision for grant of eligibility certificate and requires the industrial unit eligible for sales tax exemption under the Incentive Schemes to make an application in form A appended to the notifications to the Member-Secretary of the appropriate screening committee as mentioned in clause 2 (k) of the Incentive Schemes within 90 days of the publication of the notifications or commencement of commercial production, whichever is later. The screening committee has been empowered to pass appropriate orders for sanction/refusal of eligibility certificate an in case of sanction of eligibility certificate, the sanction is to be conveyed in writing to the assessing authority concerned and the assessing authority is required to issue the eligibility certificate in form B appended to the notifications within a period of seven days from the date of receipt of the sanction. Clause 8 of the Incentive Schemes lays down that the eligibility certificate once granted, shall be normally valid for a period of one year and the eligible units desirous of extending the period of the eligibility would have to apply for renewal of the eligibility certificate in form A to the Commercial Taxes Officer having jurisdiction, not less than one month before the expiry of the eligibility period of the certificate and the Commercial Taxes Officer is required to dispose of the said application within a period of 15 days of the receipt of the application and in the event of failure to do so, the applicant is required to apply for renewal to the appropriate screening committee and the said committee is required to dispose of the application before the expiry of the eligibility period of the original certificate. The said clause also prescribes that the renewal shall be made for one year at a time. Clause 9 of the Incentive Schemes lays down that the industrial unit covered by the Incentive Schemes shall be subject to all the provisions of the Act and the Rules made thereunder and the terms and conditions contained in the notification and of the assessing authority, after affording an opportunity of being heard to the industrial unit, is satisfied that the breach of any conditions has been committed, he shall, after obtaining prior permission of the Commissioner of Commercial Taxes, levy tax on the finished goods not taxed under the tax exemption scheme, as if there was no exemption and there was escapement of tax.
(2.) IN Writ Petitions Nos. 3141 of 1987, 3310 of 1987, 1157 of 1988 and 1169 of 1988, the petitioner is M/s. Om Shiv Shakti Cement Private Limited, a private limited company, having a small-scale unit at Sikar and it manufactures and sells Portland cement. The said unit of the said petitioner commenced production from 11th September, 1985. The said petitioner submitted applications for grant of eligibility certificates under both the INcentive Schemes on 12th June, 1987, on the basis that it is a "new industrial unit covered by 1985 dispensation". The case of the said petitioner is that while the said applications of the petitioner were pending consideration, the assessing authority, viz. , the Commercial Taxes Officer, Sikar, passed orders dated 6th October, 1987 making provisional assessment under section 7-B of the Rajasthan Sales Tax Act in relation to the turnover for the month of July, 1987 and for the period 12th June, 1987 to 30th June, 1987 and issued demand notice for the recovery of the tax assessed under the said assessment orders and further a notice dated 21st October, 1987 was issued under the section 7-B of the Rajasthan Sales Tax Act in relation to the turnover for the months of August and September, 1987. IN Writ Petition No. 3141 of 1987, the said petitioner has prayed that a writ, order or direction be issued directing the issuance of the eligibility certificate to the petitioner under the INcentive Scheme and also for quashing the assessment orders and demand notices dated 6th October, 1987 and for issue of a writ of prohibition and prohibiting further proceedings on the basis of notice dated 21st October, 1987. It appears that assessment orders and demand notices dated 6th October, 1987 were also issued by the assessing authority under section 9 of the Central Sales Tax Act read with section 7-B of the Rajasthan Sales Tax Act and a notice dated 21st October, 1987 was also issued under section 9 of the Central Sales Tax Act read with section 7-B of the Rajasthan Sales Tax Act. Writ Petition No. 3310 of 1987 has been filed by the petitioner to challenge the aforesaid assessment orders and demand notices dated 6th October, 1987 and the notice dated 21st October, 1987. After the filing of these writ petitions eligibility certificates were granted to the petitioner under the INcentive Schemes on 8th February, 1988 and the said eligibility certificates have been made effective from 8th February, 1988 to 7th February, 1989. Assessment order date 6th November, 1987 was also passed by the assessing authority under section 7-B of the Rajasthan Sales Tax Act and under section 9 of the Central Sales Tax Act read with section 7-B of the Rajasthan Sales Tax Act in respect of the period 1st August, 1987 to 30th September, 1987 in pursuance of the notices dated 21st October, 1987 under challenge in Writ Petitions Nos. 3141 of 1987 and 3310 of 1987 referred to above. The petitioner, therefore, filed Writ Petitions Nos. 1157 of 1988 and 1169 of 1988 to challenge the said assessment orders dated 6th November, 1987 and the demand notice issued for the recovery of the tax assessed under these assessment orders. IN these writ petitions the petitioner has submitted that the eligibility certificates issued to the petitioner under both the INcentive Schemes should be operative from 12th June, 1987, the date of submission of the applications by the petitioner and the petitioner is entitled to avail the exemption under the INcentive Schemes on the turnover subsequent to 12th June, 1987. Writ Petitions Nos. 3228 of 1987 and 6 of 1988 are composite petitions in relation to grant of eligibility certificates under both the Incentive Schemes wherein also the petitioners have challenged the assessment orders passed under section 7-B of the Rajasthan Sales Tax Act and under section 9 of the Central Sales Tax Act read with section 7-B of the Rajasthan Sales Tax Act and the demand notices issued for the recovery of the tax assessed under these assessment orders. The petitioners in both these writ petitions carry on business of manufacture of cement in a mini cement plant and they commenced commercial production after 1st April, 1985 and had applied for grant of eligibility certificates in the category of new industrial unit covered by 1985 dispensation. In Writ Petition No. 3228 of 1987 the applications for grant of eligibility certificates under both the Incentive Schemes were submitted on 15th June, 1987. In Writ Petition No. 6 of 1988 the said applications for grant of eligibility certificates were submitted on 16th June, 1987. The eligibility certificates under both the Incentive Schemes were granted to the petitioners in these Writ petitions on 8th February, 1988 and the same are operative for the period from 8th February, 1988 to 7th February, 1989. The case of the petitioners in these writ petitions is that the eligibility certificates should have been granted with effect from the date of submission of the applications and the petitioners are entitled to claim exemption from tax under the Incentive Schemes on the basis of the eligibility certificates granted to them with effect from the date of submission of their applications for grant of eligibility certificates. Applications have been submitted on behalf of the respondents in these writ petitions for dismissal of the writ petitions as having become infructuous for the reason that eligibility certificates have been granted to the petitioners. The said applications have been opposed by the petitioners on the ground that the grant of the eligibility certificates to the petitioners does not put an end to the grievances raised by the petitioners in the writ petitions inasmuch as the eligibility certificates that have been issued have been made effective from the dates of issuance of the eligibility certificates whereas the case of the petitioners is that in the event of the grant of the eligibility certificates it is to be operative with effect from the date of submission of the applications and the petitioners are entitled to claim exemption from tax under the Incentive Schemes with effect from the date of submission of the applications for grant of eligibility certificates. In view of the aforesaid submission of the petitioners it cannot be said that writ petitions are liable to be dismissed as having become infructuous and it is necessary to examine the question whether in the event of grant of the eligibility certificates under the Incentive Schemes, the said certificate is to be made operative with effect from the date of the grant of said certificate or with effect from the date of submission of the application. If the said question is answered in favour of the petitioners they would be entitled to claim exemption from tax under the Incentive Schemes with effect from the date of submission of the applications and the assessment orders passed under section 7-B of the Rajasthan Sales Tax Act and under section 9 of the Central Sales Tax Act read with section 7-B of the Rajasthan Sales Tax Act and the demand notices issued for the recovery of the tax assessed under those assessment orders will have to be quashed. The learned counsel for the petitioners have urged that taking into consideration the object and purpose underlying the grant of exemption under the Incentive Schemes and the various provisions in the Scheme as well as the forms that have been prescribed for applications as well as for the eligibility certificate, the eligibility certificate is to be operative with effect from the date of submission of the application and not with effect from the date of grant of the certificate. In this connection it has been urged that in the Incentive Schemes no time-limit has been prescribed within which the eligibility certificate may be granted after the submission of the application and if the eligibility certificate is to be operative with effect from the date of issuance of the certificate, it would result in great hardship to the industrial unit in whose case for grant of eligibility certificate has been unduly delayed and the said unit would not be able to compete in the market and the whole object and purpose underlying the granting of exemption from tax under the Incentive Scheme would be frustrated inasmuch as the object underlying the Incentive Scheme is to encourage the growth of the specified categories of industrial units by making their products competitive in the market. In support of this submission the learned counsel have placed reliance on the decisions of the Supreme Court in Mathra Parshad and Sons v. State of Punjab [1962] 13 STC 180, Assessing Authority v. Patiala Biscuits Manufacturers Pvt. Ltd. [1977] 39 STC 381 and State of U. P. v. Haji Ismail Noor Mohammad & Co. [1988] 70 STC 101. The learned counsel have also placed reliance on the decision of this Court in Nathmal Tarachand v. Commissioner of Sales Tax, Rajasthan [1963] 14 STC 1000, the decision of the Orissa High Court in Subhash Chandra Ghosh v. State of Orissa [1970] 26 STC 211 and the decision of the High Court of Punjab and Haryana in Chandra Industries v. Punjab State [1972] 29 STC 558. Shri G. S. Bapna, the learned counsel appearing for the respondents has, on the other hand, submitted that the eligibility certificate, on, being granted, is to be operative with effect from the date of issuance of the certificate and it cannot be given retrospective effect so as to be operative with effect from the date of the submission of the application. Shri Bapna has also urged that an industrial unit would not suffer any prejudice on account of the eligibility certificate being made effective from the date of issuance of the certificate because the benefit of the Scheme would be available to the unit for a period of five years from the date of issuance of the certificate and in cases where the grant of eligibility certificate is delayed, the said delay would not in any way affect the enjoyment of the concession under the Incentive Scheme by the said unit. Shri Bapna also urged that for the purpose of grant of the eligibility certificate an industrial unit has to satisfy various requirements contained in the Incentive Scheme and the application submitted by the unit has to be scrutinised by the screening committee and only after the screening committee is satisfied that the unit fulfils the requirements of the Incentive Scheme the screening committee sanctions the grant of the eligibility certificate and thereafter the assessing authority is required to issue the eligibility certificate and that a time-limit of seven days is prescribed for the assessing authority to issue the eligibility certificate from the date of the receipt of the sanction. Shri Bapna has also invited our attention to notifications of the Government (published in the Rajasthan Gazette dated 3rd March, 1988) dated 5th February, 1988 whereby both the Incentive Schemes notified under the notifications dated 23rd May, 1987 have been amended and sub-clause (d) has been inserted in clause 7 whereby it has been prescribed that the benefit of the Incentive Scheme shall be available from the date of issue of the eligibility certificate. The said amendment in clause 7 of the Incentive Schemes does not apply to these cases because here the eligibility certificates were granted on 8th February, 1988, i. e. , prior to 3rd March, 1988, the date of the publication of the notifications dated 5th February, 1988 in the Rajasthan Gazette. Shri Bapna has, however, submitted that the aforesaid amendment is clarificatory in nature and it only makes it clear that the benefit of the Incentive Scheme would be available from the date of the eligibility certificate.
(3.) BEFORE we deal with the aforesaid contentions of the learned counsel for the petitioners, we may refer to the decisions on which reliance has been placed by the learned counsel for the petitioners. In Mathra Parshad and Sons v. State of Punjab [1962] 13 STC 180, the question which came up for consideration before the Supreme Court was whether the notification exempting manufactured tobacco from the levy of sales tax by including item 51 in the Schedule under the East Punjab General Sales Tax Act, 1948, has to be given effect from the date of the notification or from the beginning of the financial year. The Supreme Court held that the tax under the East Punjab General Sales Tax Act was yearly and was to be paid on the taxable turnover of a dealer and that the exemption, whenever it came in, in the year for which the tax was payable, would exempt sales of those goods throughout the year, unless the Act said that the notification was not to have this effect, or the notification fixed the date for the commencement of the exemption. The Supreme Court found that in that case notification did not fix the date from which the exemption was to operate. It was, therefore, held that the exemption must operate for the whole year, during which it was granted. In Nathmal Tarachand v. Commissioner of Sales Tax, Rajasthan [1963] 14 STC 1000, a Division Bench of this Court followed the aforesaid decision of the Supreme Court in Mathra Parshad and Sons v. State of Punjab [1962] 13 STC 180, and held that the grant of an exemption certificate under section 4 (2) of the Rajasthan Sales Tax Act before the end of the accounting year 1955-56 to a registered dealer carrying on the business in gold and silver bullion and ornaments, operated for the entire business transacted in that year. In that case this Court found that the notification by which exemption was granted was silent about the date of commencement of the exemption. ;