D.N.PATEL,J. - (1.) This writ petition has been preferred for quashing and setting aside the order dated 8th February, 2003 (Annexure-32) passed by the Commissioner of Commercial Taxes, Jharkhand, Ranchi whereby, partially the claim of refund was allowed in pursuance of Standing Order No. 478 dated 22nd December, 1995. Originally the claim of the refund for this petitioner was at Rs. 8,47,70,166.07/-, out of this, refund claim allowed is of Rs. 5,19,25,216/-. Being aggrieved and feeling dissatisfied by the order of Commissioner of Commercial Taxes, Jharkhand, Ranchi, this petition has been preferred by the petitioner.
(2.) FACTUAL MATRIX: Petitioner set up its industrial unit in the year 1974 for manufacturing of Electrolytic Tinplate (hereinafter to be referred to as "ETP" for the sake of brevity), for which the main raw material was Tin, Mill, Black Plate (hereinafter to be referred to as "TMBP" for the sake of brevity). This TMBP was imported by this petitioner from various countries. The erstwhile State of Bihar issued Industrial Policy, 1995 (Annexure-1), conferring various incentives including exemption from payment of sales tax, upon purchase of raw materials, within the State. As per Clause 16.1, 16.2 and 16.3 to be read with Clause 16.4, the benefits were given for category 'A' and category 'B' districts. Here, we are concerned with category 'B' districts because petitioner is falling within category 'B' district and, therefore, it is claimed by the petitioner that it is entitled to get the exemption for 8 years, because, for category 'A', the exemption is for 10 years and for category 'B' the exemption is for 8 years. As per Clause 16.3, the units which are going to diversification, were also entitled to the benefits. The petitioner is claiming exemption from payment of sales tax upon purchase of raw materials for the period running from 05.04.1996 to 31.03.1998. In view of Clause 16.4 of the Industrial Policy, 1995 (Annexure-1), the erstwhile State of Bihar issued a notification being Standing Order No. 478 dated 22nd December, 1995 (Annexure-2) which imposes the procedure and condition for taking the benefit of exemption from payment of sales tax upon the purchase of raw materials. Original Clause no. 15 is now replaced by a new clause as per Standing Order No. 57 dated 02.03.2000 (Annexure-9). As per Clause 2 of Standing Order No. 57 dated 02.03.2000, original Clause no. 15 of Standing Order No. 478 dated 22nd December, 1995 was replaced and now Clause no. 15 (2) has also been incorporated looking to the original Industrial Policy, 1995 Clause No. 16.4. This substituted Clause no. 15(2) is the bone of contention in this matter. Much has been argued out by counsels for both the sides upon the substituted Clause no. 15.2. Similarly, Clause No. 15(4) (Ga) provides for benefit of exemption to be granted to diversified products. Petitioner, who was importing TMBP from various countries, now wanted to manufacture the same. For this manufacturing, the raw materials are Hot Rolled Coil, Zinc and Tin. This petitioner is claiming exemption from payment of sales tax upon purchase of only one raw material viz. Hot Rolled Coil and not upon Zinc and Tin. These facts have been clarified by the counsel appearing for the petitioner more than once. While manufacturing TMBP coils, other 8 items were also manufactured and as they are new items, which were never manufactured earlier and, therefore, it is known as a diversification for all the items manufactured for the first time, as per Standing Order No. 478 dated 22nd December, 1995 to be read with Standing Order No. 57 dated 02.03.2000. The petitioner is entitled to get exemption upon the payment of sales tax upon purchase of raw materials viz. Hot Rolled Coil for all the 9 items, whereas, Commissioner of Commercial Taxes, Jharkhand, Ranchi has granted exemption from the payment of sales tax upon purchase of Hot Rolled Coil only up to 61% because, out of the total raw materials, this much percentage i.e. 61% of the raw materials has been utilized for the manufacturing of a new item TMBP. For other items even if the raw material is utilized, no exemption has been granted to this petitioner from payment of sales tax upon purchase of Hot Rolled Coil because other 8 items were never included in the exemption certificate, which is at Annexure-5 to the memo of this writ petition. Exemption certificate granted by the State of Jharkhand dated 23rd June, 1998 is only for TMBP and not for any other products. The exemption certificate at Annexure-5 dated 23rd June, 1998 is in exercise of the powers by the State Government under substituted Clause no. 15(2) to be read with Clause 16.4 of the Industrial Policy. Initially, the order was passed by the Commissioner of Commercial Taxes (Administration), Jamshedpur Division, Jamshedpur dated 30th June, 2000 and 1st July, 2000, whereby, the claim of the refund of this petitioner for the year 1996-1997 was disallowed and was restricted to ?rd of incremental capacity for which a writ petition being CWJC No. 2857 of 2000 (R) was preferred, which was decided by the Division Bench of this Court vide order dated 10th May, 2002 and the matter was remanded by the Division Bench of this Court and in pursuance of this order of the Division Bench, fresh order was passed by the Commissioner of Commercial Taxes, Jharkhand, Ranchi dated 8th February, 2003 (Annexure-32) whereby, partly the claim of refund was allowed. Being aggrieved and feeling dissatisfied by this order, the present writ petition i.e. W.P.(T) 992 of 2003 was preferred by this petitioner which was withdrawn by this petitioner and to that effect order was passed on 15.03.2005. After withdrawal of the writ petition, the petitioner approached Hon'ble the Supreme Court by way of Special Leave to Appeal and Hon'ble the Supreme Court, vide order dated 15th January, 2014 granted liberty to this petitioner to prefer an application for recalling the earlier order dated 15th March, 2005. Hence, C.M.P. No. 107 of 2014 was preferred before the Division Bench of this Court in the present writ petition for recalling the order dated 15th March, 2005. This C.M.P. No. 107 of 2014 was allowed by this Court vide order dated 2nd December, 2015 with a cost of Rs. 25,000/, which has been paid, as per the direction given by the Division Bench of this Court and order passed by this Court dated 15th March, 2005 was recalled and the present writ petition was restored to its original file with the same number. The C.M.P. No. 107 of 2015 was, thus, allowed with cost. Hence, the present writ petition has been argued out at length by the counsel for both the sides which basically involves interpretation of Industrial Policy, Clause 16.1, 16.2, 16.3 and 16.4 to be read with Standing Order No. 478 dated 22nd December, 1995.
(3.) ARGUMENTS CANVASSED BY COUNSEL FOR THE PETITIONER: Counsel for the petitioner submits that petitioner has set up its plant in the year 1974, for manufacturing of ETP for which the raw material was TMBP. This raw material was imported from various countries. Petitioner decided to manufacture TMBP for which the raw material is Hot Rolled Coil, Zinc and Tin. It is submitted by counsel appearing for the petitioner that while manufacturing new item TMBP, there are other 8 items also first time manufactured by the petitioner and hence, as all the products are new one, for all the products as per Clause 16.1, 16.2, 16.3, the benefit of exemption from the payment of sales tax upon the raw material should have been granted by the Commissioner of Commercial Taxes, Jharkhand, Ranchi vide order dated 8th February, 2003. Counsel appearing for the petitioner submitted that out of total 9 products, an application was preferred for exemption as per Annexure-3 to the memo of this writ petition. The said application is dated 25th May, 1996. The benefit of exemption from payment of sales tax upon the raw materials has been given only to the extent to which the said raw materials were used for manufacturing of TMBP, whereas, the same raw material is also utilized for manufacturing of other 8 items which are also new products. This aspect of the matter has not been properly appreciated by the Commissioner of Commercial Taxes, State of Jharkhand, Ranchi, while passing the impugned order dated 08th February, 2003. It is submitted by counsel for the petitioner that what is given by the Industrial Policy, 1995 cannot be taken away by the Standing Order. In fact, Standing Order No. 57 dated 02nd March, 2000 which replaces Clause No. 15 of Standing Order No. 478 dated 22nd December, 1995 is not applicable to the facts of the present case because, the period for which the exemption is sought for, is running from 05.04.1996 to 31.03.1998. Counsel for the petitioner further submitted that there is one more Standing Order No. 479 dated 22nd December, 1995, published by the erstwhile State of Bihar, granting exemption from payment of the sales tax upon the sale of the new products. Under this Standing Order No. 479, exemption from the payment of sales tax upon sale of all the 9 new items manufactured by this petitioner has been granted. It is further submitted by counsel for the petitioner that though, we are not concerned with the Standing Order No. 479 dated 22nd December, 1995, but, the facts remain that the very same government has granted exemption from the payment of sales tax upon the sale of all the 9 items, meaning thereby, all the 9 items which are mentioned at Annexure-3 to the memo of this writ petition including TMBP are the new items and once they are new items manufactured by this petitioner, which is accepted for the applicability of the Standing Order No. 479, there is no reason why Standing Order No. 478 dated 22nd December, 1995 is not applicable to the very same new 9 items. Commissioner of Commercial Taxes has applied Standing Order No. 478 dated 22nd December, 1995 only for one of the items, out of total 9 new items. This is an error apparent on the face of the record, committed by the Commissioner of Commercial Taxes, State of Jharkhand, Ranchi, while passing the order dated 08th February, 2003 (Annexure-32) and hence, the said order deserves to be quashed and set aside. It is contended by counsel for the petitioner that the very purpose and object of the Industrial Policy, 1995 floated by the erstwhile State of Bihar was to give incentive to the newly established units or to the existing units, which are manufacturing new items which is also known as diversification the items which were never manufactured by the same unit. Counsel for the petitioner has placed reliance upon the decisions rendered by Hon'ble the Supreme court as reported in: (i) (1999)1 SCC 31 (State of Bihar and Ors. v. Suprabhat Steel Ltd. and Ors.) (ii) (2006)4 SCC 57 (State of Jharkhand and Ors. v. Tata Cummins Ltd. and Anr.) (iii) (2016)1 SCC 560 (Lloyd Electric and engineering Ltd. v. State of Himachal Pradesh and & Ors.) Counsel for the petitioner has submitted that the interpretation of the Industrial Policy is quite different from interpretation of the Taxing Statutes. Interpretation of exemption clauses in the Industrial Policy is different from interpretation of exemption granted under the Taxing Statutes. The interpretation of the Industrial Policy should be made liberally. What is granted by one hand by the State cannot be taken away by another hand. It is further contended by counsel for the petitioner that looking to the impugned order dated 08th February, 2003 (Annexure-32), passed by the Commissioner of Commercial Taxes, State of Jharkhand, Ranchi, the only reason given is that other products (other than TMBP) they can be sold independently and further processing of these items is required to make TMBP. These reasons have been given in paragraph no. 5 of the impugned order. It is submitted by counsel for the petitioner that these reasons reveal that Commissioner of Commercial Taxes, Jharkhand, Ranchi has lost sight of the fact that we are concerned with Standing Order No. 478 dated 22nd December, 1995 and not with Standing Order No. 479 dated 22nd December, 1995. These reasons given by the Commissioner of Commercial Taxes reveal non-application of mind upon Standing Order No. 478. These reasons reveal that extraneous considerations have been appreciated by the Commissioner of Commercial Taxes which is known as Wednesbury unreasonableness. When any adjudicating authority is taking into consideration irrelevant interpretation while adjudicating the dispute, the same is known as Wednesbury unreasonableness. Thus, it is submitted by counsel for the petitioner that the impugned order dated 08th February, 2003, at Annexure-32 suffers from Wednesbury unreasonableness. Counsel for the petitioner has further submitted that subsequent affidavit filed by the respondent-State in the year 2016 which supplies additional reasons to justify the impugned order is not permissible in the light of the judgment and order delivered by the Hon'ble Supreme Court in the case of Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New Delhi and ors. reported in (1978) 1 SCC 405. On the basis of the aforesaid decision, it is submitted by counsel for the petitioner that if further reasons are permitted to be supplied in the counter affidavit to support the impugned order, perhaps, all the weak orders or all the orders which are not tenable at law will be provided strength or will be provided legality in the reasoning process, by the new ideas mentioned in the counter-affidavit. This type of additional reasons given in the counter-affidavit, which are never mentioned in the impugned order, which were even never contemplated while passing the impugned order, cannot make an order reasonable or legal, if otherwise, it is not tenable at law. Counsel for the petitioner further submitted that affidavits have also been filed in this writ petition to the effect that not only upon TMBP, but, also upon other 8 newly manufactured items, the excise duty has also been paid. Thus, there is manufacturing of not only TMBP, but, also other 8 new items and, therefore, the benefit of the Industrial Policy, 1995 (Annexure-1) to be read with Standing Order No. 478 dated 22nd December, 1995, ought to have been given to this petitioner. This aspect of the matter has not been properly appreciated by the Commissioner of Commercial Taxes, Jharkhand, Ranchi, while passing the impugned order dated 08th February, 2003 (Annexure-32) and hence, the same deserves to be quashed and set aside. Learned counsel for the petitioner has further submitted that as per Clause appended to Industrial Policy, 1995, especially as per Clause No. 7 thereof, only intimation is to be given for diversification which has already been given as per Annexure-3 and as per the manufacturing process submitted by this petitioner to the respondents and, hence, subsequently changed Clause no. 15 as per Standing Order no. 57 dated 2nd March, 2000 is not applicable to the facts of the present case. Even otherwise also, the period with which this petitioner is concerned is running from 5.4.1996 to 31.3.1998, whereas, Standing Order no. 57 has been issued on 2nd March,2000 and, hence, also the same is not applicable to this petitioner. Counsel for the petitioner has further submitted that if prior permission is required to be taken as per Clause 17(2) of Standing Order No. 478 dated 22nd December, 1995, an order has already been passed by Joint Commissioner of Commercial Taxes (Administration) Jamshedpur Division, Jamshedpur dated 23rd September, 1998 (Annexure-6 to the memo of this writ petition) by which it has been held that for the whole raw material, the petitioner is entitled to exemption. It is submitted by the counsel for the petitioner that as per the impugned order dated 08th February, 2003 (Annexure-32) only 61% of the raw material, which is used for manufacturing, has been given exemption from payment of the sales tax. This 61% has been wrongly finalized by the Commissioner of Commercial Taxes. In fact, 100% of the raw material which have been utilized for manufacturing of not only TMBP, but, also for other 8 new items should have been given exemption from payment of sales tax upon the purchase of the raw material viz. Hot Rolled Coil. It is further submitted by the counsel for the petitioner that 61% has been finalized looking to the yield of the manufacturing for TMBP only which has a corelation with the same. This is an error apparently committed by the said authority because there is another Standing Order No. 479 of the very same date i.e. 22nd December, 1995, which is concerned with the sale. Here in the present case, we are concerned with the purchase of the raw material, which is used for manufacturing of new items and if the raw material is purchased for the manufacturing of new items, then the industries are exempted from the payment of sale tax upon the purchase of such type of raw materials. It is further submitted by counsel for the petitioner that inspection was carried out by the respondent-state on 03.02.2003. The said report is at Annexure-31 and on the basis of the inspection report the refund application was preferred by the petitioner for the year 1996-1997. This report given by the respondent-state dated 03.02.2003 (Annexure-31) finds out that purchase of Hot Rolled Coil involves the total payment of sales tax of Rs. 3,34,68,907/-. Thus, sales tax paid upon the raw materials by this petitioner, which is Hot Rolled Coil is Rs. 3,34,68,907/- for the year 1996-1997. As per the Industrial Policy Clause 16.1, 16.3 to be read with Standing Order No. 478 dated 22nd December, 1995, this Hot Rolled Coil (raw material) has been fully utilized by this petitioner, has been totally used by this petitioner for the manufacturing of 9 new items including TMBP and hence, Refund Application No. 1 was preferred in the proper format under the Bihar Finance Act, 1981 for refund of Rs. 3,34,68,907.09/- paisa for the year 1996-1997 (Annexure-21 series). Similarly, on the basis of the inspection report given by the State Government dated 03.02.2003, which is at Annexure-31, for the year 1997-1998, the purchase of the raw material from TISCO involves payment of sales tax by this petitioner at Rs. 4,89,19,802.47/- paisa and purchase of the raw materials from SAIL upon which sales tax is paid comes to Rs. 2,39,3805.20/- paisa. Thus total sales tax paid by this petitioner for the period 1997-1998 upon the purchase of the raw material viz. Hot Rolled Coil comes to Rs. 5,13,13,607/- (Rs. 4,89,19,802.47 paisa+Rs. 23,93,805.20 paisa). Thus, payment of sales tax ought to have been refunded by the State in view of Clause 16.1 to be read with Clause 16.3 to be read with Standing Order No. 478 dated 22nd December, 1995 and, hence, Refund Application No. II was preferred by this petitioner which is at Annexure-21 series. These two refund applications have been decided by the impugned order dated 08th February, 2003 by the Commissioner of Commercial Taxes, State of Jharkhand, Ranchi and partly these refund applications have been allowed and in stead of total refund of Rs. 8,47,70,166.07/- (Rs. 3,34,68,907.09 + Rs. 5,13,13,607.17), only Rs. 5,19,25,216/- has been allowed and paid, whereas, rest of the amount has not been refunded only on the ground that part of the raw material was never utilized for the manufacturing of TMBP. The said part of the material is 39% of the total raw materials. The bifurcation made by the Commissioner of Commercial Taxes is 61% and 39%, by wrong interpretation of Industrial Policy as well as Standing Order No.478 dated 22nd December, 1995 and looking to the reasons given in para 5 of the impugned order, perhaps, the Commissioner of Commercial Taxes, has wrongly entered into the periphery of Standing Order No. 479 of the very same date i.e. 22nd December, 1995. The reasons given in para 5 is about sale of the goods, whereas, we are concerned with the purchase of the raw material and the use thereof is manufacturing of items which are brand new items and which were never manufactured earlier which is known as diversification as per Industrial Policy Clause no. 16.1 to be read with clause 16.3 to be read with Standing Order No. 478. The order passed by the Commissioner of Commercial Taxes is so weak that it requires additional reasons to be given in counter affidavit, which is not permissible as per the decision rendered by the Hon'ble Supreme Court in the case of Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New Delhi & Ors. reported in 1978(1)SCC 405.;