Holding

Both the hot‑rolled and cold‑rolled mills are existing units; having obtained benefit for one unit under a prior policy, the appellant is not entitled to any further relief under the 2002 notifications.

Summary

Tata Iron and Steel Co. Ltd., a dealer under the Bihar Finance Act, operated a Hot Rolled Mill (HRM) and later set up a Cold Rolled Mill (CRM) as a diversification. The CRM received tax exemption under Bihar's 1995 Industrial Policy notifications 478/479, which was later withdrawn but restored by the Supreme Court. After Jharkhand was created, the State issued its 2001 Industrial Policy and notifications 65, 66, 67 (Jan 12, 2002) granting set‑off and adjustment benefits to both new and existing units. The company applied for the benefit for its HRM (an existing unit) but was denied. The High Court treated the whole company as a single existing unit and remitted the matter for a fresh claim. The Supreme Court examined whether separate units within the same assessee could claim distinct benefits and interpreted "existing unit" under the Jharkhand policy. It held that both HRM and CRM are existing units, and since the CRM had already received relief under a different policy, the appellant could not obtain additional benefit under the 2002 notifications. The appeals were dismissed.

Issues considered

The meaning of "existing industrial unit" under the Jharkhand Industrial Policy 2001 and its notifications.
Whether a single assessee can claim separate tax benefits for different units (HRM and CRM) under different policies.
Whether the appellant, having already received exemption for its CRM under Bihar's 1995 policy, is entitled to further set‑off benefits for its HRM under Jharkhand's 2002 notifications.

Legislation cited

Bihar Finance Act, 1981s. 13(1)(b), s. 14, s. 16, s. 22, s. 23, s. 7
Central Sales Tax Act, 1956

Subjects

sales taxset offindustrial policyexisting unittax exemptionBihar Finance ActJharkhand Industrial Policypromissory estoppeleligibilityindustrial diversification

Judgment

M/S. TATA IRON AND STEEL CO. LTD. A
v.
STATE OF JHARKHAND AND ORS.

MARCH 30, 2005

[B.P. SINGH AND S.B. SINHA, JJ.] B

Bihar Finance Act, 1981 :

ss. 22, 23 and 13(/){b)-Jharkhand Industrial Policy 2001-Notification
,... Nos. 65, 66 and 67 dated 12. 1. 2002-Interpretation of-Facilities of set off C
and adjustment on intra-State sales, inter-State sales and concessional rate of
sales tax on purchase of raw material-Assessee producing steel through Hot
Rolled Mill and Cold Rolling Mill-Claiming exemption under Notifications
dated 12.1.2002-Held, since both Hot Rolled Mill and Cold Rolling Mill are
existing units, one of them having received the benefits under a different D
policy, assessee not entitled to any further relief in terms of the Notification
Nos. 65, 66 and 67 dated 12.1.2002-Bihar industrial Policy 1991-Notification
Nos. 478 and 479 dated 22. 12.1995-lnterpretation ofStatutes-Administrative
f
Law-Promissory estoppel-Applicability of

Assessee-appellant, a manufacturer of steel through its Hot Rolled E
Mill (HRM) was granted an industrial licence for expansion of its existing
industrial unit located in the State of Bihar, which after creation of State
of Jharkhand came thereunder. Under the Industrial Policy, 1995 of the
Government of Bihar, two Notification Nos. 478 and 479 dated 22.12.1995
were issued granting exmption to dealers in respect of tax on purchase of
sale of certain goods manufactured by new/expanded/diversified/ F
modernized units. The assessee, pursuant to the Notifications, undertook
diversification of its product, namely, saleable steel, by establishing a Cold
Rolling Mill (CRM). On creation of State of Jharkhand and extension of
the 1981 Act to the said State, the assessee claimed benefit of the
Notification Nos. 478 and 479 dated 22.12.1995. Assessee's claim was
G
ultimately allowed by the Supreme Court*. Meanwhile State of Jharkhand
declared its Industrial Policy 2001 and issued Notification Nos. 65, 66 and
67 dated 12.1.2002 granting facilities of set off and adjustment on intra-
state sales, inter-state sales and providing for concessional rate of sales
tax on purchase of raw material, to dealers in respect of new industrial
1207 H
1208 SUPREME COURT REPORTS [2005] 2 S.C.R.

A units as well as the existing units.
The assessee, as regards its existing unit, namely, HRM applied for
eligibility certificate, which was rejected, and ultimately the High Court
held that the assessee as a whole, including its diversification into CRP, &--
'
was one existing unit, but as the litigation in relation to CRP was pending
B before the Supreme Court, the matter was remitted granting leave to the
assessee to make a fresh claim under industrial Policy, 2001 on the premise
\
that if it was found not entitled to the benefit of 1995 Policy in respect of
CRP, it would be able to claim the benefit under the 2001 Policy of State
of Jharkhand. Aggrieved, the assessee filed the present appeals.

c Dismissing the appeals, _the Court

HELD: 1.1. The appellant started its cold rolled mill in terms of a
·-
fresh industrial licence. It was granted a new industrial licence by the
Ministry of Industry of the Central Government on or about 9.11.1998
for manufacture of cold rolled/galvanized/coated/corrugated/painted/
D varnished steel sheets/strips/coils in the integrated steel plant. It, in view
of the judgment of this Court, * became entitled to the benefit of set off
and/or adjustment from the tax paid on purchase of raw materials in terms
of Bihar Industrial Policy which was in force for 5 years from September
'.
1, 1995. As both Hot Rolled Mill and the Cold Rolled Mill are existing
units, and one of them having received the benefits under a different policy,
E the appellant is not entitled to any further relief in terms of the
notifications dated 12th January, 2002 .. (1223-E-G; 1232-B-CI

*Mis. Tata Iron and Steel Co. Ltd. v. State ofJharkhand and Ors., (2004)
7 242; referred to.

F t.i. The Government of Jharkhand has declared its Industrial Policy
on or about 25.8.2001, the effective date therefor being 15th November,
2000. Th.e said Policy was put in force from 15th November, 2000. The
Appellant's cold rolled mill as also hot rolled mill, thus, are existing units
within the meaning of the Jharkhand State Policy, in terms whereof if a
benefit is granted under one policy, no other benefit would be available.
G (1223-G-H; 1224-AI
2.1. Despite .the fact that the appellant, as a juristic person is an L
assessee or a dealer within the meaning of the 1981 Act; and, thus, was
required not only to get itself, registered as such but also file one single
return in respect whereof there may be one order of assessment; but the
H same does not prevent an assessee from claiming separate tax exemptions
TAT A IRON AND STEEL CO. LTD. v. ST ATE 1209
......
• and/or other tax benefits both in respect of its new industrial units as also
its existing units. The Industrial Policy permits the same. [1224-C-DJ
A

2.2. The provisions of the statute must be assigned a meaning having
regard to the text and context thereof. In a given situation, it is possibte
to hold that the cold rolling mill of the appellant as well as its hot rolling
mill should be treated as separate industrial projects. It may also be .B
possible for an assessee to claim different exemptions under different heads
if such a situation exists or different fiscal benefits are granted to different
units under the same or different notifications. Only because the appellant
is a dealer, that by itself cannot be a ground for denying to it fiscal benefits

- if it is otherwise entitled thereto. High Court was not right in holding that
the expression "industrial unit" or "existing unit" should be used in a
generic sense to indicate the industry in its entirety and not each of its
C

component. [1225-F-H; 1226-AJ
3.1. Despite the fact that Sections 22, 23 as also 13(l)(b) of the 1981
Act refer to a dealer and Section 14 thereof refers to registration of dealers
mandating filing of return in respect of its activities, the same would not. D
mean that the State cannot grant the same or different benefits to different
units producing different products of the same assessee. The State has the
J power not only to grant exemptions, but also direct such grant relating to
a class or description of goods. If the State has the power to issue a
notification, it has the power to amend, vary or rescind the same and E
exercise such power from time to time as and when occasion arises
therefor. 11226-A-CI

3.2. The notifications in question, however, are not exemption
notifications. They provide for set off or adjustment of tax. A dealer in
terms of the 1981 Act must be taxed but it may be granted exemption F
therefrom in respect of certain items or adjustment or set off thereof in
relation to its particular products manufactured in a new or existing
industry. A notification may be issued under Sections 22 or 23 in respect
of one or more products or in respect of one or more units. However,
whether a dealer would be entitled to the benefit of set off unit-wise or
not will depend upon the language employed keeping in view the object
the notifications seek to achieve. It will not be proper for a court of law
to prescribe limitations or restrictions when there is none or vice versa.
(1226-C-El
3.3. Clause 5 of the Notification dated 12.1.2002 imposes a restriction
while defining the existing date to say that the facility of set off to the H 1
1210 SUPREME COURT REPORTS [2005] 2 S.C.R.
,......
A existing units shall be available only to those units which are not availing
any facility like deferment of tax _or tax free purchases or tax free sales •
under any notifications announced earlier before the effective date.
[1226-G-H; 1227-A)

3.4.The notification, although extends the tax benefits both to the
B new units as also the existing units, but thereby it does not contemplate
that grant of benefit should be extended to separate existing units although
they may be producing same but technically different products. The
manufactured item is salooble steel. Quality of manufactured steel from
CRM and HRM may have difference but as on the date of coming into

c force of the Jharkhand Industrial Policy as also the notifications issued
under the 1981 Act both CRM and HRM were existing units, each one of
them cannot get the benefit thereof. (1227-A-B)
--
Commissioner, Trade Tax, UP. v. DSM Group of Industries, [2005) 1
sec 657, distinguished
D Textile Machinery Corporation Limited, Calcutta v. The Commissioner
of Income Tax, West Bengal, Calcutta, (1977) 2 SCC 368; Municipal
Commissioner, Chinchwad New Township Municipal Council v. Century Enka
Ltd., ( 1995) 6 SCC 152 Commissioner ofIncome Tax, Amritsar v. Straw Board
Manufacturing Co. Ltd., [1989) Supp. 2 SCC 523; Bajaj Tempo Ltd., Bombay \~
...._..,.
v. Commissioner of Income Tax, Bombay City - III, Bombay [1992] 3 SCC
E 78 and Commissioner of Sales Tax v. Industrial Coal Enterprises, [1999) 2
sec 607, held inapplicable.
Pappu Sweets and Biscuits and Anr. v. Commissioner o/Trade Tax, UP.,
Lucknow, (1998) 7 SCC 228, cited.

F 4. Eligibility clause, it is well settled, in relation to exemption
notification must be g.iven a strict meaning. The principle that in the event
a provision of fiscal statute is obscure such construction which favours
the assessee may be adopted, but it would have no application to
construction of an exemption notification, as in such a case it is for the
assessee to show that he comes within the purview of exemption.
G (1229-A-CI

Collector of Customs, Bangalore and Anr. v. Mis. Maestro Motors ltd.
L
and Anr., (2004) 10 SCALE 253; Novopan India ltd., Hyderabad v. Collector
of Central Excise and Customs, Hyderabad (1994) Supp. 3 SCC 606; State
Level Committee and Anr. v. Morgardshammar India Ltd., It 9961 t SCC 108;
H
TATA IRON AND STEEL CO. LTD. v. STATE 1211
and Commissioner of Central Excise v. MP. V & Engg. Industries, (2003) 5 A
sec 333, referred to.
5. This is also not a case where the appellant altered its position
pursuant to or in furtherance of a promise made to it by the State. The
doctrine of promissory estoppel, therefore, is not applicable. It is not even
a case where the doctrine of legitimate expectation could be invoked. The B
doctrine of promissory estoppel would be applicable where a
representation has been made by the State in exercise of its power tp
exempt or abolish a commodity as taxable commodity. Such promise,
however, must be made by the persons who have the power to implement
the representation. (1231-E-F] C
Hira Tikkoo v. Union Territory, Chandigarh and Ors., (20041 6 SCC
765, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1912 of2004.·

From the Judgment and Order dated 12.8.2003 of the Jharkhand High D
Court at Ranchi in W.P. (T) No. 2003 of 2003.
WITH
C.A. No. 2269 of 2005.

Gaurav Banerjee, Saurav Agrawal and M.K. Dua with him for the E
Appellant in C.A. No. 1912/2004.

Punit Dutt Tyagi and S.B. Dixit for the Appellant in C.A. No. 2269/
2005.

Sunil Gupta, Gopal Prasad, Pratap Kalra and Vivek Vishnoi with him F
for the Respondents.

The Judgment of the Court was delivered by

S.B. SINHA, J. Leave granted in S.L.P. (C) No. 15419 of 2004.
G
Interpretation and application of the notifications bearing Nos. 65, 66
& 67 dated 12th January, 2002 issued by the State of Jharkhand pursuant to
the Jharkhand Industrial Policy, 200 I falls for our consideration in these
appeals which arise out ofjudgments and orders dated 12.8.2003 and 16.3.2004
passed by a Division Bench of the Jharkhand High Court whereby and H
1212 SUPREME COURT REPORTS [2005] 2 S.C.R.
,,..._
A whereunder the writ petition filed by the Appellants herein was disposed of
with certain directions.

BACKGROUND FACTS :

The fact of the matter is being noticed from Civil Appeal No. 1912 of
B 2004.
The Appellant, an existing company within the meaning of Companies
Act; 1956, is a producer of saleable steel and other alloy products having a
production capacity of 17.4 lakh tons. It at all material times was and still is
producing steel through its Hot Rolled Mill (HRM). It is registered as a
C dealer both under the Central Sales Tax Act, 1956 and the Bihar Finance Act,
198 l (l 98 l Act). It was granted an industrial licence for expansion of its
existing industrial unit located at Jamshedpur for production of steel to the
extent of 21 lakh tons per annum.

D EXEMPTION CLAIMED FOR NEW INDUSTRIAL UNIT :

The Government of Bihar issued an Industrial Policy in the year 1995.
With a view to give effect thereto it issued two notifications bearing Nos. 478
and 479 dated 22.12.1995 granting exemption to dealers in terms of Section
7(3)(b) of the 198 l Act in respect of tax on purchase or sale of certain goods
E manufactured by new/ expanded/diversified/modernized units. Pursuant to or
in furtherance of the said Industrial· Policy as also the notifications issued
pursuant thereto, the Appellant herein undertook diversification of its product
- saleable steel by establishing a cold rolling mill. On or about 10.1.1998, the
Government of Bihar acknowledged that the Appellant was 'going to diversify
its plant'. In terms of the Bihar Reorganisation Act, 2000, the State of
F Jharkhand was created with effect from 15.11.2000, as a result whereof, inter
a/ia, the 1981 Act was extended to the State of Jharkhand.

The Appellant ciaimed benefits of the aforementioned notification Nos.
478 and 479 dated 22.12.1995 whereupon by an order dated 16.12.2000 the
G benefit of exemption in respect of its Cold R~lled Product (CRP) was granted
treating the 'diversified capacity' as a new unit. Such grant of exemption,
however, was withdrawn by the Commissioner of Commercial tax in exercise
of its suo motu power of revision holding that as both Cold Rolled Product
L
and Hot Rolled Product find mention in the same entry issued in terms of
Section 14 of the Central Sales Tax Act, 1957, they are not entitled to the
H benefits claimed.
TAT A IRON AND STEEL CO.LTD. v. STATE [SINHA, J.] 1213

Aggrieved, the Appellant filed a writ petition before the Jharkhand A
High Court which was marked as CW JC 1426 of 200 I. The Division Bench
of the High Court disposed of the said writ petition upon setting aside the
order of the Commissioner of Commercial Tax dated 3.4.200 I and remitt~ng
the matter back to the Commissioner of Commercial Taxes for reconsideration
of the question as to whether the cold rolled product is a new and distinct B
product vis-a-vis hot rolled product.

An application for grant of Special Leave frcm the said order was
filed before this Court by the Appellant herein and leave having been granted
in the appeal, the matter was marked as C.A. No. 2138 of 2002. This Cdurt
by judgment and order dated 25th August, 2004 [since reported in [2004] 7 C
SCC 242] held that the product manufactured by the Appellant in its new unit
is a cold rolled mill (CRM) product and not hot rolled mill product. It was
opined:

"21... ..... Based on a promise made in the industrial policy of the
State of Bihar, at every stage the appellants tried to verify and conflnn D
whether they are entitled to the benefit of exemption or not and they
were assured of that exemption. It is based on these assurances that
the appellant invested a huge sum of money which according to the
appellant is to the tune of Rs. 2000 crores but the State says it may
be to the tune of Rs. 1400 crores. Whatever may be the figure, the
fact still remains that the appellants have invested huge sums of mo~ey E
in installing its new industrial unit. At every stage of the construction,
progress and installation of the machineries, the Government/
authorities concerned were infonned and at no point of time it vvas
suspected that the new unit was going to manufacture HRM. ifhe
process of manufacturing HRM and CRM as could be seem from the p
experts' opinion is totally different and the material on record also
shows that the plant design for a new unit is for the purpose iof
manufacturing CRM. These factors coupled with the fact that at no
stage of the proceedings which culminated in the judgment of the
High Court, the respondent State had questioned this fact except for
the technical ground taken by the Commissioner which is found to be G
erroneous, we find the ends of justice would not be served by
remanding the matter for further inquiry."

EXEMPTION CLAIMED FOR EXISTING INDUSTRIAL UNIT :

In the meanwhile the State of Jharkhand declared its Industrial Policy H
1214 SUPREME COURT REPORTS [2005] 2 S.C.R.

A on or about 25.8.2001 for the period 15th November, 2000 to 3 I st March,
2005; para 28.1 whereof inter alia provided for set off I adjustment to dealers
in respect of new industrial units as well as the existing units. Para 28.2
provided for a uniform rate of tax @ 2% in view of the provision of set off.

Three notifications bearing Nos. 65, 66 and 67 dated 12th January,
B 2002 were issued thereafter in terms of Sections 22, 23 and I 3(1 )(b)
respectively. S.O. 65 refers to facility of set off and adjustment on intra-State
sales. S.O. 66 refers to inter-state sales whereas S.O. 67 provides for
concessional rate of sales tax on purchase of raw material and other items at
the rate of 2%. Such facility is to be allowed to those industrial units who
C come undenhe purview of set off of tax.

The Appellant as regards -its existing unit, viz., HRM applied for
eligibility certificate before the Deputy Commissioner of Commercial Tax
stating that it had been 'engaged in manufacture and sale activities of various
iron & steel products and other materials'. The said application of the Appellant
D was rejected by the Deputy Commissioner of Commercial Tax by an order
dated I 3.3.2002 opining that it being a dealer with one registration under
Sales Tax Laws, was not entitled thereto. The said order came to be affirmed
by the Commissioner of Commercial Tax by an order dated 25.3.2003.

A writ petition thereagainst was filed which was marked as WP(T) No.
E 2003 of 2003. By reason of the impugned judgment, while setting aside the
aforementioned orders dated 13.3.2002 and 25.3.2003 passed by the Deputy
Commissioner of Commercial Taxes and the Commissioner of Commercial
Taxes respectively, the High Court held (although not finally) that the
Appellant as a whole, including its diversification into CRP, is one existing
F unit, but as the litigation in relation to CRP was pending before this Court,
the matter was remitted grantin!? leave to the Appellant to make a fresh claim
under the Industrial Policy, 200 l on the premise that if it is found not entitled
to the benefit of 1995 Policy in respect of CRP, it would be able to claini the
benefit under the 2001 Policy of the State of Jharkhand.

G CONTENTIONS :
Mr. Dushyant A. Dave and Mr. Gaurav Banerjee, learned senior counsel L
appearing on behalf of the Appellant took us through the Industrial Policy of
the State of Jharkhand as also the aforementioned notification Nos. 65, 66
and 67 dated 12th January, 2002 and would submit :
H
TATA IRON AND STEEL CO. LTD. v. STATE [SINHA,J.) 1215

(i) The Industrial Policy covers both new unit as well as existing units A
and CRM having been treated to be a new unit, the High Court committed
an error in not directing grant of benefits to its HRM as an existing unit.

(ii) Such Industrial Policy as also the notifications having not referred
to 'company', 'assessee' or 'dealer', each unit of the Appellant was entitled
to the benefit of the notifications irrespective of the fact as to whether they B
are new or existing units.

(iii) The notifications should be given a liberal construction having
regard to the object of the policy, viz. to optimally utilize the available
resources of the State in a planned manner and to accelerate the industrial
development of the State. CRM having a separate industrial licence having C
been set up for manufacturing separate goods by going into commercial
production which may not be multiple ones, the High Court should not have
laid too much emphasis on Clause (6) of the notification as it was a machinery
provision and, thus, .not a part of the policy.
D
Mr. Punit Dutt Tyagi, learned counsel appearing on behalf of the
Appellant in S.L.P. (C) No. 15419 of2004, would contend that the Appellant
supplied gas to TISCO wherefor sales tax at the rate of 2% was charged on
the premise that it had already filed application for grant of set off and/or
......
;
adjustment although the rate of tax was 3%. A writ petition was filed as the
State of Jharkhand stopped issuance of the concession forms on the premise E
that it did not deposit the tax at the rate of 3%. Jt is accepted that the fate
of this appeal would depend upon the result of the first matter.

Mr. Sunil Gupta, learned senior counsel appearing on behalf of the
Respondents, would submit that :
F
(a) All the aforementioned three notifications dated 12th January, 2007
having been issued under Sections 22, 23 and 13( I )(b) of the 1981 Act; are
required to be construed in terms thereof.

(b) As the provisions of the 1981 Act envisage the company as an
assessee, exemptions can be claimed only by it as a whole and not in relation G
to each of its units.

(c) Industrial Policy being a multi-faceted policy, although a diversified
activity of the Appellant in terms thereof will be treated as a new unit, but
having regard to the statutory scheme and on proper reading of the H
...

1216 SUPREME COURT REPORTS [2005) 2 S.C.R.

A notifications, it has rightly been held by the High Court that the benefits of
adjustment and set off were available only to a dealer/ assessee as the State
exerCised its jurisdiction only in terms of Sections 22 and 23 of the Act in
respect of entirety of its activities and the units belonging to it.

(d) Effective date in terms of the notification and Industrial Policy
B being same in respect of both existing as well as new un'it, the Appellant
having obtained the benefit in respect of its cold rolled mill was not entitled
to any further benefit by way of adjustment or set off in respect of its hot
rolled mill which was an existing unit.

(e) Eligibility clause contained in the Industrial Policy must receive
C · strict construction.
STATUTORY PROVISIONS

1981 Act

D Section 2(e) defines 'dealer' to mean any person who carries on the
business of buying, selling 1 supplying or distributing goods, directly or
indirectly, for cash, or for deferred payment, or for commission, remuneration
or valuable consideration which inter alia includes a company which carries
on such business.
........
E Section 3 provides for charge of tax in terms whereof sales or the
purchase tax, as the case may be, is required to be paid by every dealer. Such
tax is payable to a dealer to whom clause (a) of sub-section (1) applies on
sales and purchases made inside Bihar on and from the date of commencement
of the 1981 Act and by a dealer to whom clause (b) of the said sub-section
F applies on such sales· or purchases made on or from the date immediately
following the day mentioned in the said clause (b). Sub-section (9) of Section
3 provides that the provisions of the Central Sales Tax Act, 1956 shall apply
for determination when a sale shall be deemed to have taken place inside
Bihar.

G Section 7 provides for exemption. Section 7(3)(b) empowers the State
Government to exempt any dealer from payment of sales tax or purchase tax
by issuing an appropriate notification and subject to such conditions or
--~
restrictions, as the case may be, inter alia sales of any goods or class or
description of goods to or by any class of dealers.

H Section 12 provides for rate of tax whereas Section 13 p~ovides for
TAT A IRON AND STEEL CO. LTD. v. STA TE [SINHA, .I.] 121 7

special rate of tax on certain sales or purchases. Section 13( I )(b) of the 1981 A
Act reads as under :

"13. SPECIAL RATE OF TAX ON CERTAIN SALES OR
PURCHASES.

(l) Notwithstanding anything contained in this part but subject 'to B
such conditions and restrictions as may be prescribed -

(b) sales to or purchases by a registered dealer of goods required py
him directly for use in the manufacture or processing of any goods
for sale;"

Section 14 provides for registration of dealers. Section 16 mall°dates C
filing of return by a dealer. Section 22 empowers the State Govemment to 1

permit any dealer, or class or description of dealers who are running
manufacturing units in the State of Bihar to adju~t the amount of tax paid on 1

the purchases of raw materials which has been use·d for manufacture of goods
for inter-State sale against the tax payable on sale of finished product within D
the State in such manner as may be laid down in the order allowing permission,
if it is satisfied that it is necessary to do so in the interest of industrial growth.

·./ Section 23 similarly empowers the State Government to permit

- adjustment or set off of tax in respect of inter-State sales.

Bihar Industrial Policy, 1995
E

The Industrial Policy of 1995 was issued by the State of Bihar with a
view to create an environment conducive to growth of industries in the State.

Clause 16.2 deals with sales tax on sale of finished goods for new uh its, F
in terms whereof new units, in addition to the benefit of exemption I set off
of Sales Tax on purchases, will also have the option to choose deferment or
exemption of Sales Tax [both Bihar Sales Tax and Central Sales Tax] on sale 1

of finished goods for a period of I 0 years for category 'A' and 8 year~ for
category 'B' District~ from the date of production of the unit with a ceiling
of I 00% of the fixed investment made by it. G
Clause 16.3 of the said Policy reads as under :

"16.3 Units Undertaking Expansion/Diversification - Such units should
be given identical treatment as new units for their expanded/ diversified
H
1218 SUPREME COURT REPORTS [2005] 2 S.C.R.

A capacity and incremental both in purchase of raw materials and for
sales tax on finished goods. All such incentives will be admissible to
such units which are covered by the definition of expansion/
diversification as given in the Annexure. Incremental production
means:

B "The incremental production shall mean the excess of actual
production over 2/3 of the originally installed capacity or the highest
production in 3 years immediately preceding the year in which such
expansion/diversification commenced whichever of the two is higher".

The said policy was to remain in force for a period of 5 years with
C effect from September I , 1995.
The following definitions mentioned in Annexure appended to the said
Policy and which are relevant for our purpose read as under :

"I. Effective Date : Effective date means the date of which the
D provision of this Policy come into force i.e. September I, 1995. This
policy will remain in force for 5 years from September I, 1995.

2. Industrial Units/Industrial Concern : Industrial Units/concern means
any u.nit/ concern or to be engaged in manufacturing/processing/
sen;iting industry belonging to the following categories :
E
(a) Industries listed under the First Schedule of the Industries
(Development and Regulation) Act, 195 I and amended from time to
time.

(b) Thrust industries listed in para I 5 of the Policy Statement.
F (c) Industries falling within the purview of the following Boards/
Agencies :

(i) Small Scale Industries Board

(ii) Coir Board
G
(iii) Silk Board

(iv) All India Handloom and Handicrafts Board
L
(v) Khadi and Village Industries Commission

H
TATA IRON AND STEEL CO. LTD. v. STATE [SINHA, J.] 12 l 9

(vi) Any other agency constituted by the GOI or GOB for industrial A
development. .. ." .....

3. Ex,isting Industrial Unit: Existing Industrial Unit means an industrial
unit which has gone into production before the effective date.

4. New Industrial Unit : New Industrial Unit means an industrial units B
which has ~ome into production between lst September, 1995 and
31st August, 2000.

7. Expansion/Modernization/Diversification : Expansion/
Modernization/Diversification of an existing industrial unit would
mean additional fixed capital investment in plant and machinery of C
50% or more of the undepreciated value of fixed capital investment
in the existing unit leading to incremental production capacity which
would not be less than 50% of the initial installed capacity. In order
to qualify for the sales tax incentives a unit undertaking expansion/
modernization/ diversification should send intimation to the General
Manager, District Industries Centres or the Managing Director, D
Industrial Area Development Authorities & Deputy Commissioner
.
1
Commercial Taxes as the case may be in respect of Small Scale
. Industry or the Director of Industries/Director, Technical Development
and Commissioner Commercial Taxes in case of medium and large
industries before undertaking expansion/ modernization programme. E
Such intimation should be accompanied by detailed expansion I
modernization I diversification proposal giving the specific period of
proposed investment.''

- S.O. 4 79 dated 2nd December, 1995 was issued by the State of Bihar
in exercise of its power under Clause (b) of Sub-section (3) of Section 7 of
the 1981 Act whereby and whereunder exemption was granted to those new
F

industrial units which started production from l st September, 1995 to 31st
August, 2000 on the sales of finished goods produced by them under the
terms and conditions specified therein, clause (c) whereof reads thus :

"(c) For exemption from sales tax, industrial unit means such unit G
which manufactures goods for sale and for the purpose of it the

- meaning of "manufacture" shall be the same as defined in part l of
the Bihar Finance act, 1981 (Bihar Act No. 5 of 1981)"

H
1220 SUPREME COURT REPORTS [2005] 2 S.C.R.

·· A Jharkhand Industrial Policy, 2001 (

We may, at this juncture notice certain provisions of Jharkhand Industrial
Policy.

"28. l. New Industrial Units as well as existing units which are not
B availing any facility of Tax-deferment or Tax free purchases of Tax
free sales under any notification announced earlier," shall be allowed
to opt for set off,. of Jharkhand Sales Tax paid on the purchases of
raw materials within the State of Jharkhand only against Sales Tax
payable either JST or CST on the sale; excluding stock transfer or
consignment sale out side the state, of finished products made out
c from such raw materials subject to a limitation of six months or the
same financial year from the date of purchase of such raw materials.

28.2 Clause 13(i)(b) of the Adopted Bihar Finance Act, 1981 provides
for two (2) rates of concessional sales tax on purchases of raw materials
and other inputs. These are 2% and 3% against Form IX. Both these
D rates will be reduced to 2% in view of the provision for set off as
aforesaid."

Definitions

Effective Date : Effective date means 15th November 2000 from
E which date the new State of Jharkhand has been created, the date on
which the provision of this Policy come into force, i.e. November 15,
2000. This Policy will remain in force till 31st Match, 2005.

"Unit" means any industrial project in large and medium scale having
approval in the form of letter of intent, industrial license or registration
F certificate, as the case may be, under the Industries (Development
and Regulation) Act, 1951 (65 of 1951) or an acknowledgement in
the form of Secretariat for Industrial Assistance reference number
from Central Government excluding those mentioned in the negative
list of industries at Annexure - Ill."
G Explanations :
'
'i
(i) For the purpose of concessions/ benefits relating to sales tax, only ..
such units shall be deemed to be industrial units which carry on the
bu.siness of manufacturing goods for sale.

H (ii) If any doubt arises as to whether a unit/ concern is an industrial
TATA IRON AND STEEL CO. LTD. v. STATE [SINHA, J.J 1221

unit/industrial concern or not for the purposes of this policy, the same A
shall be referred to a committee headed by the Finance Commissioner
with Industri_al Development Commissioner/ Secretary Industry and
Commercial ·Taxes Commissioner as its members and the decision of
the Commfttee shall be final.

- Existing Industrial Unit: Existing industrial Unit means an industrial
unit which has gone into commercial production before the effective
date.
B

New Industrial Unit : New Industrial Unit means an industrial unit
which has come into commercial production between 15th November,

- 2000 and 31st March, 2005."

Notifications :
C

We have noticed hereinbefore that the notifications No. S.Os. 65 and
66 dated 12th January, 2002 were issued respectively under Sections 22 and
23 of the Bihar Finance Act. As they are identically worded, we shall refer D
· only to S.O. 65, the relevant clauses whereof are as under :

"In exerdse of powers conferred under section 22 of Bihar Finance
Act, 1981 (Bihar Act 5, 1981) (Adopted), State Governments provides
facility of set off to new industrial units and existing units subject to
the following conditions and restrictions : E
1. For pennission of this : -

Indu~tria/ unit means such unit which -

"Unit" means any industrial project of large anci medium scale having
approval in the fonn of letter of intent, industrial license or registration
F
certificate, as the case may be, under the Industries (Development
and Regulation) Act, 1951 (65 of 1951) or an acknowledgement in
the fonn of Secretariat for Industrial Assistance reference number
from Central Government excluding those mentioned in the negative
list of industries at Annexure - III." G
Explanations :

(i) For the purposes of concessions/ benefits relating to sales tax, only
such units shall be deemed to be industrial units which carry on the
business of manufacturing goods for sale. H
1222 SUPREME COURT REPORTS [2005) 2 S.C.R.

A (ii) If any doubt arises as to whether a unit/ concern is an industrial
unit/industrial concern or not for the purposes of this policy, the same
shall be referred to a committee headed by the Finance Commissioner
with Industrial Development Commissioner/ Secretary Industry and
Commercial Taxes Commissioner as its members and the decision of
the Committee shall be final.
B
2. Existing Industrial Unit- Existing Industrial Unit means an industrial
unit which has gone into commercial production before the effective
date.

3. New Industrial Unit· New Industrial Unit means an industrial unit
C which has come into commercial production between 15th November,
2000 and 31st March, 2005.

4. Meaning of Date of Production shall be : i The date of start of
production of an industrial unit shall mean the date on which the unit
actually starts commercial production of the item for which the unit
D has been registered. As regards the date of production of a SSI unit,
the certificate issued by the General Manager, District Industries Centre
or Managing Director, Industrial Area Development Authority will
'' be accepted. In case of any dispute in the date of production the
decision of the Director or Industries in this regard shall be final.
E 5. Meaning 'of Effective Date shall be - Effective date means 15th
November· 2000 from which date the new State of Jharkhand has
been c~eated. From this date provision of this Policy shall be made
effective. This Policy shall remain in force till Jlst March, 2005.
I
2. The fa~ility of set off to the existing units shall be available only
F to those units which are not availing any facility like deferment of tax
or tax free purchases or tax free sales under any notifications
announced earlier before the effective date.

3. The Benefit of this facility shall be available only on Jharkhand
Sales Tax paid on Raw Material (for direct" use in Manufacturing
G Activities) purchased within the State of Jharkhand under Section
13(1) (b) ofBihar Finance Act, 1981 (adopted) against the Jharkhand
Sales Tax payable on sale excluding stock transfer or consignment
sale out side the state.

4. This set off shall be available on the finished products manufactured
H
TATA IRON AND STEEL CO. LTD. v. STATE [SINHA,J.] 1223

- from such Raw Material subject to purchases within six month or the
same financial year from the date of purchaser of such Raw Material.
A

. 5. The benefit of set off under this notification shall be available to
only those Industrial Units which have been issued eligibility certificate
by the circle in charge (commercial taxes) of that area.
B
- 6(a) The verification of Monthly/ Quarterly return filed by each of
the Industrial Units shall be done by the concerned Commercial Tax
Officer. Every unit shall enclose the photocopy of the purchase
invoices along with the return. After verification of returns and
purchase invoices, Commercial Tax Officers shall inform the Industrial
Unit as to how much amount of set off they will adjust against the C
next returns.

(b) The competent Commercial Tax Officer after verification of file
shall inform the industrial unit in writing within 15 days as to how
much less or more amount of set off has been done by them and how
. much -amount of set off they will adjust in the next return. D
(c) Each of the Industrial Units along with its monthly/ Quarterly
returns, they will file the following statements in duplicate along with
a declaration certifying there in that the items shown in the purchase
invoices ha\fe been purchased by them and the same have been directly
used for production of products for sale." E
ADMITTED FACT :

The Appellant started its cold rolled mill in terms of a fresh industrial
licence. It was granted a new industrial licence by the Ministry of Industry
of the Central Government on or about 9. { l .1998 for manufacture of cold F
rolled/galvanized/coated/corrugated/ painted/varnished steel sheets/strips/coils
in the integrated steel plant for a proposed capacity of 1200000.00 ton. It, in
view of the judgment of this Court, as referred to hereinbefore, became
entitled to the benefit of set off and/ or adjustment from the tax paid on
purchase of raw materials in terms of Bihar Industrial Policy which was in G
force for 5 years from September I, 1995.

The Government of Jharkhand has declared its Industrial Policy on or
about 25.8.2001, the effective date therefor being 15th November, 2000. The
said Policy was put in force from 15th November, 2000. The Appellant's
cold rolled mill as also hot rolled mill, thus, are existing units within the H .
1224 SUPREME COURT REPORTS [2005) 2 S.C.R.

A meaning of the Jharkhand State Policy, in terms whereof if a benefit is -
granted under one policy, no other benefit would be available.

INDUSTRIAL POLICY - RESTRICTED NEW UNITS ALONE :

The Industrial Policy of State of Jharkhand is a multi-faceted one. As
B many as 20 strategies have been laid down therein. Emphasis therein has
been laid on the infrastructure inter a/ia having regard to the United Nations
Development Programme Co-operation Framework for India Report. The
mining and mineral base industries are in the forefront of the identification
of thrust areas. With that in view, under the heading "Commercial tax
C Reforms'', clause 28. l seeks to grant tax benefits both to new industrial units
as also existing units. Even under its notifications dated 12th January, 2002
issued under the provisions of the Bihar Finance Act, facilities of set off both
in relation to inter-State and intra-State sale are to be given to new industrial
units as also existing units. Thus, despite the fact that the Appellant, as a
juristic person is an assessee or a dealer within the meaning of the 1981 Act;
D and, thus, was required not only to get itself registered as such but also file
one single return in respect whereof there may be one order of assessment;
but the same, in our opinion, does not prevent an assessee from claiming
separate tax exemptions and/ or other tax benefits both in respect of its new
industrial units as also its existing units. The Industrial Policy permits the
same.
E
HIGH COURT JUDGMENT :

The High Court in its impugned judgment held that the cold rolling
mill is an independent unit established by the company. The company sought
the benefit of Industrial Policy, 200 l in respect of its units other than cold
F rolling mill although all are existing units having gone into production before
15th November, 2000.

Referring to the dictionary meaning of "Project" and "unit", it was
opined :

G "So any industrial enterprise that is carefully planned and designed
to achieve a particular aim will be an industrial project. Clause 6 of
the Notification, SO 65 relates to the verification of the returns filed
by an industrial unit. Sub-clause (c) thereof seems to suggest that an
industrial unit contemplated therein is a unit which files monthly/
quarterly returns, for, it provides that each of the industrial units
H
TATA IRON AND STEEL CO. LTD. v. STATE [SINHA, J.] 1225

along with its monthly/ quarterly returns, will file certain documents A
in duplicate regarding purchases made and that they have been directly
used for production of the products for sale. It can be said that clause
6 of the policy tends to support the submission of the learned counsel
for the Department that the industrial unit referred to in the notification
is the assessee or in this case the company as a whole and not each B
of its individual lines or components.''

"No doubt, under the Industrial Policy, 1995, even a diversification
was treated as a new industry for the purpose of benefit under that
Policy. But here, there is no such fiction. Here, what is contemplated
is a new industry that has come into existence or an existing industry
which has not claimed benefit under any of the earlier notifications
granting benefit pursuant to the Industrial Policy. Merely because a
unit is defined as meaning any industrial project, it is not possible
without anything more, to accept the argument that the Cold Rolling
Mill of the Company should be treated as a separate industrial project
and the rest of the production units of the company should be treated D
as different individual industrial projects within the meaning of the
Notification, SO No. 65."

It was further held :

"Different lines of production or manufacture can in a given E
circumstance be an industrial project, but if the different lines are for
achieving creation of the ultimate marketable product of the Company,
f
(the different products may themselves be used as raw materials for
the ultimate product), then, can it be said that each branch or line of
production is an independent industrial unit?"
F
DETERMINATION :

The provisions of the statute must be assigned a meaning having regard
to the text and context thereof. In a given situation, it is possible to hold that
the cold rolling mill of the Appellant as well as its hot rolling ;mill should be
treated as separate industrial projects. It may also be possible for an assessee G!
to claim different exemptions under different heads if such a situation exists
or different fiscal benefits are granted to different units under the same or
different notifications. Only because the Appellant is a dealer, that by itself
cannot be a ground for denying to it fiscal benefits if it is otherwise entitled
thereto.
H
1226 SUPREME COURT REPORTS [2005] 2 S.C.R.

A We do not agree with the High Court that the expression "industrial
unit" or "existing unit" should be used in a generic sense to indicate the
industry in its entirety and not each of its component.

Despite the fact that Sections 22, 23 as also 13(1 )(b) of the 198 I Act
refer to a dealer and Section I 4 thereof refers to registration of dealei:s
B mandating filing of return in respect of its activities, the same would not
mean that the State cannot grant the same or different benefits to different
units producing different products of the same assessee. The State has the
-
1\ ~

power not only to grant exemptions, but also direct such grant relating to a
class or description of goods. If the State has the power to issue a notification,
C it has the power to amend, vary or rescind the same and exercise such power
from time to time as and when occasion arises therefor.

The notifications in question, however, are not exemption notifications.
•They provide for set off or adjustment of tax. A dealer in terms of the 1981
Act must be taxed but it may be granted exemption therefrom in respect of
D certain items or adjustment or set off thereof in relation to its particular
products manufactured in a new or existing industry. A notification may be
issued under Sections 22 or 23 in respect of one or more products or in
respect of one or more units. However, whether a dealer would be entitled
to the benefit of set off unit-wise or not will depend upon the language
employed keeping in view t~e object the notifications seek to achieve. It will
E not be proper for a court of law to prescribe limitations or restrictions when
there is none or vice versa.

The notification contemplates units which manufacture products for
sale. The Explanation appended to Clause I expressly provides "For the
purposes of concessions/benefits relating to sales tax, only such units shall be
F
deemed to be industrial units which carry on the business of manufacturing
goods for sale". Clause 2 of the Notification defines 'existing industrial unit'
to mean "an industrial unit which has gone into commercial production
before the effective date" whereas 'new industrial unit' in terms of Clause
3 means "an industrial unit which has come into commercial production
G between 15th November, 2000 and 31st March, 2005. Meaning of' 'date of
production" as contained in Clause 4 refers to actual commencement of
commercial production of the item and for which the same has been registered.
Clause 5 imposes a restriction while defining the existing date to say that the
facility of set off to the existing units shall be available only to those units
H which arei not availing any facility like deferment of tax or tax free purchases
TATAIRONANDSTEELCO.LTD.v.STATE [SINHA,J.] 1227
or tax free sales under any notifications announced earlier before the effective A
date.

The notification dated 12th January, 2002, although extends the t~x
benefits both to the new units as also the existing units, but thereby it does
not contemplate that grant of benefit should be extended to separate existing
units although they may be producing same but technically different products. B
The manufactured item is saleable steel. Quality of manufactured steel from
CRM and HRM may have difference but as on the date of coming into force
of the Jharkhand Industrial Policy as also the notifications issued under the
1981 Act both CRM and HRM were existing units, each one of them cannot.
get the benefit thereof. C
Mr. Gupta in support of its contention that all units of assessee must be
treated in their entirety referred to a recent decision of this Court in
Commissioner, Trade Tax, U.P. v. DSM Group of Industries, [2005] 1 SCC
657. In that case the assessee had different units. It expanded only ·some units
by making a fixed capital investment of 50 crores or more in terms of the D
Industrial Policy as also the exemptions notifications issued under the U.P.
Trade Tax Act. The State, however, raised a contention that such sum of Rs.
50 crores must be spent on each unit of the company and not on its industrial
undertaking as a whole. The provisions of the notification dated 21.2.1997 as
also Section 4-A(6) of the Uttar Pradesh Trade Tax Act, 1948, it was held,
did not justify the contention that for the purpose of grant of exemption, each E
unit is to be considered to be a separate unit stating :

"14. It is an undisputed fact that the principal place of business of
the Company is Dhampur, District Bijnore. The exemption claimed
by the respondent, under the notification dated 2 l ·2-1997, was for
expansion, modernisation or diversification. What is a "unit" for
F.
purposes of expansion, diversificatfon or modernization has been
defined in Section 4-A(6) Explanation (5), which has been set out
hereinabove. Under this, "Unit" _means an "industrial undertaking"
of a dealer who is not a defaulter and who meets the requirements as
set out in clause (b) thereof. The dealer, indisputably, is the respondent G
Company. The industrial undertaking of the respondent is the
Company. It is the Company which will be paying the tax and which
will get the benefit of exemption, if entitled to it."

This court therein was dealing with a reverse situation. It accepted the
principle of law that the notifications have to be interpreted keeping in view H
1228 SUPREME COURT REPORTS (2005] 2 S.C.R.

A the object, and the object being to encourage investments and production, it
was held that a liberal interpretation which advances the object of the
notification should be ascribed. The Court took recourse to the doctrine of
'purposive interpretation' saying :

"25 ..... ~.As we have already seen, Section 4-A defined the tenn "unit"
B to mean an industrial undertaking, which has undertaken expansion,
modernization and diversification. Even under the General Clauses
Act, where the context so requires the singular can include the plural.
A plain reading of the notification shows that for "expansion,
modernization and diversification'' it is the industrial undertaking
which is considered to be the "unit". This is also clear from the fact
c that in the notification wherever the words "expansion, modernization
or diversification" are used, there are no qualifying words to the
effect "in any one unit". In none of the clauses is there any
requirement of the investment being in one unit of the industrial
undertaking. Words to the effect "in a particular unit" or "in one
D unit" are missing. To accept Mr. Sunil Gupta's submission would
require adding words to a notification which the Government purposely
omitted to add."

It was further observed :

E "26 Even otherwise, the purpose of notification being to encourage
increased production and to give benefit to industries which have
invested rupees fifty crores or more in the State and whose production
has thus increased, an interpretation must be given which would extend
benefit to such industries. There would be no purpose in denying an
industry which has invested rupees fifty crores or more and whose
F production in the State has as a result increased, the benefit of the
exemption granted by this notification merely because the whole of
the investment is not in any particular unit. Thus even where the
investment is made by the Company in more than one unit, so long
as the total investment is rupees fifty crores or more, ttie benefit of
G the notification would be available. Such benefit would then be
distributed in the manner set out in the schedule depending on where
a unit in which expansion, diversification or modernization has taken
place, is situated .......... "

The said decision, therefore, was rendered in a different fact situation.
H
TAT A IRON AND STEEL CO. LTD. v. ST ATE [SINHA, J.] 1229

Eligibility clause, it is well settled, in relation to exemption notification A
must be given a strict meaning.

In Collector of Customs, Bangalore and Anr. v. Mis. Maestro Motors
Ltd and Anr., [2004] 10 SCALE 253, this Court held :

"It is settled law that to avail the benefit of a notification a party B
• must comply with all the conditions of the Notification. Further, a
Notification has to be interpreted in terms of its language."

The principle that in the event a provision of fiscal statute is obscure
such construction which favours the assessee may be adopted, but it WQuld
have no application to construction of an exemption notification, as in such C
a case it is for the assessee to show that he comes .within the purview of
exemption. [See Novopan India Ltd., Hyderabad v. Collector of Central
Excise and Customs, Hyderabad, [1994] Supp 3 SCC 606. ,

In State Level Committee and Anr. v. Morgardshammar India L(d.,
[l 996] l sec 108, referring to a large number of decisions, this Court held: D
"10 .... .lt must be remembered that no unit has a right to claim
exemption from tax as a matter of right. His right is only insofar as
it is provided by Section 4-A. While providing for exemption, the
Legislature has hedged it with certain conditions. It is not open to t~e
Court to ignore those conditions and extend the exemption." E
Mr. Banerjee has relied upon a large number of decisions for the
proposition that such notifications must receive a liberal construction.

We may now notice them.
F
In Textile Machinery Corporation Limited, Calcutta v. The Commissioner
of Income Tax, West Bengal, Calcutta, [1977] 2 SCC 368, this Court while
construing Section lSC of the Income Tax Act held :

•''20. Section lSC partially exempts from tax a new industrial unit
which is separate physically from the old one, the capital of which G
and the ·profits thereon are ascertainable. There is no difficulty to
hold that Section lSC is applicable to an absolutely new undertaking
for the first time started by an assessee. The cases which gave rise to
controversy are those where the old business is being carried on by
the assessee and a new activity is launched by him by establishing, H
1230 SUPREME COURT REPORTS [2005) 2 S.C.R.

A new plants and machinery by investing substantial funds. The new
activity may produce the same commodities of the old business or it
may produce some other distinct marketable products, even
commodities which may feed the old business. These products may
be consumed by the assessee in his old business or may be sold in the
open market. One thing is certain that the new undertaking must be
B an integrated unit by itself wherein articles are produced and at Jeast
a minimum of ten persons with the aid of power and a minimum of
.._
twenty persons without the aid of power have been employed. Such
a new industrially recognisable unit of an assessee cannot be said to
be reconstruction of his old business since there is no transfer on any
c assets of the old business to the new undertaking which takes place
when there is reconstruction of the old business. For the purpose of
Section 15C the industrial units set up must be new in the sense that
new plants and machinery are erected for producing either the·same
commodities or some distinct commodities. In order to deny the benefit
of Section 15C the new undertaking must be formed by reconstruction
D of the old business. Now in the instant case there is no formation of
any industrial undertaking .out of the existing business since that can
take place only when the assets of the old business are transferred
substantially to the new undertaking: There is no such transfer of
assets in the two cases with which we are concerned."
E The said decision was, therefore, rendered on interpretation of Section
15C of the Income Tax Act, 1961 and on the factual matrix obtaining therein.

Section I 5C of the Income Tax Act is not in pari materia with the
provision of Section 13(2)(b) of the 1981 Act.
F In Municipal Commissioner: Chinchwad New Township Municipal
Council v. Century Enka ltd., [1995] 6 SCC 152, a finding of fact was
arrived at by this Court that Unit No. 2 had been set up to effect substantial
expansion of the existing business.

G In Commissioner of Income Tax, Amritsar v. Straw Board Manufacturing
Co. ltd., [l 989] Supp 2 SCC 523, it was held that the expression 'paper and
pulp' includes paperboard and strawboard having regard to the provisions of
the Industrial (pevelopment and Regulation) Act, 1951. The said decision
has been followed in Bajaj Tempo Ltd, Bombay v. Commissioner of Income
Tax, Bombay City - Jll, Bombay, [ 1992] 3 SCC 78 and Commissioner of
H Sales Tax v. Industrial Coal Enterprises, [ 1999] 2 SCC 607.
TATA IRON AND STEEL CO. LTD. v. STATE [SINHA, J.] 1231

These decisions again were rendered in the fact situation obtaining A
therein and have no application herein.

In Pappu Sweets and Biscuits and Anr. v. Commissioner of Trade Tax,
UP., Lucknow, [1998] 7 SCC 228, the Court noticed that although the State
declared exemptions from payment of sales tax with a view to increas~
industrial activity within the State by encouraging setting up of new industrial B
units or expansion/ diversification or modernization by the existing industri~l
units, it did not desire to extend that benefit to all such industries. This
decision, therefore, runs counter to the submission of Mr. Banerjee.

In Commissioner o/Central Excise v. MP. V. & Engg. Industries, [2003] C
5 SCC 333, a Division Bench of this Court of which one of us (B.P. Sin$h,
J.) is a member, has clearly held :

"I I ...... .In dealing with the submission the Tribunal noticed .the
decision of this Court in CCE v. Parle Exports (P) Ltd wherein this
Court held that exemption should be strictly construed although the D
exemption clause in the notification may be construed liberally. In
other words, eligibility criteria should be construed strictly but a liberal
approach may be adopted in construing other conditions ....... "

We are .concerned in this case with the eligibility criteria.
E
This is also not a case where the Appellant altered its position pursuant
to or in furtherance of a promise made to it by the State. The doctrine of
promissory estoppel, therefore, is not applicable. It is not even a case where
the doctrine of legitimate expectation could be invoked. [See Hira Tikkoo v.
Union Territory, Chandigarh and Ors., [2004] 6 SCC 765]
F
We, however, are not oblivious that the doctrine of promissory estoppel
would be applicable where a representation has been made by the .State in
exercise of its power to exempt or abolish a commodity as taxable commodity.
Such promise, however, must be made by the persons who have tile power
to implement the representation.
G
The Appellant furthermore had also understood the legal posi~ion in the
same manner as would appear from its letter dated 11th February, 2002
wherein it was contended that it is an existing industry prior to 15th November,
2000 and further stated :

"Tisco is, thus, eligible to avail benefits of set off of sales tax paid H
1232 SUPREME COURT REPORTS [2005] 2 S.C.R.

A on purchases of raw materials within the state of Jharkhand from the
admitted sales tax payable on sales of products within the state of
Jharkhand as well as on sales in course of inter state sales Ex State L
of Jharkhand in terms of Notificati<;m Nos. S.O. 65 & 66 both dated
12.01.2002 .....

B We would, therefore, request you to kindly issue to us the Eligibility
\
Certificates w .e.f. 15.11.2000 as required under these Notifications to
enable us to avail the benefit of 'set off of sales tax which we are
entitled to."

We, therefore, conclude that as both Hot Rolled Mill and the Cold
C Rolled Mill are existing units, and one of them having received the benefits
under a different policy, the Appellants are not entitled to any further relief
in terms of the notifications dated 12th January, 2002.

For the reasons aforementioned, these Appeals are dismissed. No costs.

D R:P. Appeal dismissed.