1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR SPL. APPL. WRIT No. 482 of 2001 COMMISSIONER COMMERCIAL TAXES AND ANR V/S GRASIM INDUSTRIES Date of Judgment : 22.7.2009 PRESENT HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI GOVIND MATHUR,J. Mr. V.K. MATHUR and Mr. RISHABH SANCHETI for the appellant. Mr.RAMIT MEHTA, for the respondent BY THE COURT : (PER HON'BLE GUPTA,J.) This appeal by the Revenue seeks to challenge the judgment of the learned Single Judge dated 4.4.2001 allowing the writ petition of the assessee, and quashing the communication dated 25.4.1998 (Annex.5), and directing the respondents (present appellants) to re-determine the relevant values of percentage of quantum of total sales within the State, and sales in the inter-state trade or commerce, or dispatches outside State for sale outside State of Rajasthan in the accounting year 1984-85 with reference to manufacture of white cement within the State of Rajasthan in terms of notification, Annex.1, for the purpose of computing the increase in the eligibility turnover for partial exemption under the said notification, to which the petitioner was found entitled, and a direction was given to give effect to it. 2 The notification, which is the basis of controversy, being dated 6.5.1986, issued by the State of Rajasthan in exercise of powers conferred by Section 8(5) of C.S.T. Act, 1956 has been reproduced by the learned Single Judge, which we may again reproduce for the sake of convenience, which is as under:- “S.O.23.- In exercise of the powers conferred by S.8(5), CST Act, 1956, the State Govt. (2) in supersession of the FD notfn. No.F4(72)FDGr/IV/81-36 dated 3.12.1985 [S.No. 584], hereby directs that, with immediate effect, any dealer, having his place of business and manufacturing goods in the State of Rajasthan, may claim partial exemption from the tax payable in respect of the sales by him of such goods in the course of inter-State trade or commerce by way of reduction at the rate of 50% of the tax so payable on increased sales upto 50% and at the rate of 75% of the tax so payable on increased sales made over and above the aforesaid 50%, in the manner and subject to the conditions as follows:- (1) Such reduction of tax shall be allowed to a dealer only after and in respect of the increase which is effected in the percentage of the quantum of goods sold in the course of inter-State trade or commerce out of the total quantum of goods sold within the State and in the course of inter-State trade or commerce and despatched to Head Office, Branch Office, Depot or agent outside the State for sale outside the State, during any accounting year as against such percentage during the accounting year 1984-85; (2) in the case of a dealer who commenced the manufacture of goods in the State of Rajasthan on or after 1.1.1985, the average of the aforesaid percentages in respect of the other manufacturers in the State in the relevant industry during the accounting year 1984-85, calculated and determined by the assessing authority with the approval of the Commissioner, shall be deemed to be the percentage in respect of such dealer for the accounting 3 year 1984-85; (3) This increase effected in the percentage, as referred to in clause (1) above in respect of the sales in the course of inter-State trade or commerce, to be considered shall be limited to the extent of the decrease in the percentage in respect of the despatch of goods to Head Office, Branch Office, Depot or agent outside the State for sale outside the State, during the relevant accounting year as against such percentage during the accounting year 1984-85. (4) No claim for such reduction of tax shall be allowed in respect of levy- cement.” It is not in dispute as noticed by the learned Single Judge, that the writ petitioner commenced manufacture of white cement in the Rajasthan after 1.5.1985, it is also not in dispute, that there was one other industry existing in the State of Rajasthan manufacturing white cement during the base year 1984-85. It is also not in dispute, that there was only one such other industry, except the petitioner, who was manufacturing white cement in the State of Rajasthan during the relevant year 1984-85, being M/s. J.K. Industries, who was manufacturing white cement as J.K. White Cement at Gotan. The precise controversy centers round the question, as to whether for the purpose of para 2 of the notification, Annex.1, the expression “other manufacturers in the State in the relevant industry during the accounting year 1984-85” would comprehend within its meaning manufacturer of only such species of goods with respect to which the assessee seeks partial exemption under the notification, or this does 4 mean to comprehend all other relevant industry. In the present case, according to the Revenue, they mean to take into consideration all other industries manufacturing gray Portland cement in the State of Rajasthan during the accounting year 1984-85. Thus, the question is, as to whether the “relevant industry” as used in para 2 would mean, industry manufacturing white cement, or any other industry, even manufacturing gray cement, can be said to be included in the term “relevant industry”. Learned counsel for the appellant at the outset invited our attention to page 18 of the impugned judgment, and submitted, that the learned Single Judge has committed a basic error, inasmuch as, the expression interpreted by the learned Single Judge has been quoted as “other manufacturers of goods in the relevant industry within the State of Rajasthan” while in the notification, Annex.1, in para 2, “of goods” is conspicuously absent, while this expression has been used in the preamble of notification, and there it is intended to provide benefit of partial exemption to the manufacturer of goods with respect to sales by him of such goods as prescribed therein, and to the extent prescribed therein, and since the impugned judgment proceeds on the basis of this wrong assumption, by including the words “of goods” it is liable to be set aside and the only relevant consideration required to be taken into account was “other manufacturers in the State in the relevant industry”, which according to him comprise of at least 5 other manufacturers of other categories of cement, including gray Portland cement. The other submission made by the learned counsel for the appellant is by referring to page 9 of the impugned judgment, and it was submitted, that the preamble of the notification has not been properly construed by the learned Single Judge, inasmuch as, it would only refers to the goods manufactured by the assessee, and has no relevance as considered by the learned Single Judge when it has been held, that “other manufacturers in the State in the relevant industry” cannot also be divorced from the manufacturer of such goods as are manufactured by any manufacturer envisaged under preamble of clause (a) of the notification. According to the learned counsel, the scope of interpretation of preamble, and conditions No.1 to 3 is entirely different, inasmuch as, the preamble is to be construed very liberally, while the conditions are to be interpreted very strictly, and in that regard, learned counsel cited few judgments of Hon'ble the Supreme Court, however, since this abstract legal position is not in dispute, we need not dilate on those judgments much. It was then submitted, that the learned Single Judge has unnecessarily lost himself in going into the aspect of genus and species of cement, while that was not at all relevant, as what was relevant was that the figures of the accounting year 1984-85 of the “relevant industry” only were required to be taken, 6 and not of the “industry manufacturing the same species of goods”. The learned counsel for the respondent- assessee on the other hand, supported the impugned judgment, and reiterated the reliance on the judgments relied upon by the learned Single Judge. We have considered the submissions and have gone through the judgment of the learned Single Judge, the notification, and the judgments cited before the learned Single Judge. So far as the interpretation of preamble is concerned, there is no dispute that it means to give an opportunity to the manufacturer of goods in the State of Rajasthan to claim partial exemption, in respect of specified types of sales of the goods manufactured by him, and to the extent provided therein. The question requiring to be considered is, as to whether the learned Single Judge was in error in interpreting the term “relevant industry” to be confined to the industry manufacturing the white cement only. It is not in dispute, that for the purpose of clause (2) an input figure of the accounting year 1984-85 could be obtained from other industry, in cases, where the dealer, who claims, or who wants to take benefit of partial exemption had commenced manufacture of goods after 1.1.1985, the question is, 7 as to from what type of industry such base figure could be obtained, and the learned Single Judge has found, that figure could be obtained from the industry which is manufacturing identical commodity, while according to the learned counsel for the Revenue, it could be obtained from other manufacturers in the State in the “relevant industry”, during the relevant year. What would be “relevant industry” as such has not been defined in the notification, nor any guidance is available in that regard under the C.S.T. Act or any other legal authentic circular or notification, that might have been issued by the State Government or Central Government before or around issuance of Annex.1, nor any case law has been made available for our assistance, which may support the proposition, as intended to be propounded by the learned counsel for the Revenue. In our view, the “relevant industry”, therefore, has to be construed to mean, as would be understood and generally treated by the people in the trade and commerce, conversant with the subject, and comes to be known in the common parlance. Hon'ble the Supreme Court in Dunlop of India Ltd. Vs. Union of India reported in 1976(2) SC 241, relied upon by learned Single Judge, has clearly held “in interpreting the meaning of word in a taxing statute the acceptance of a particular word by the trade and its popular meaning should commend itself to be 8 authority……….”. If considered on this principle, for the writ petitioner-assessee, relevant industry would be “the industry manufacturing the goods that are being manufactured by the assessee”. In our view, the mere omission of the word “of goods” in clause (2) of Annex. 1, which words have been considered by learned Single Judge has no adverse effect on the aspect, as to from which industry the relevant inputs are to be obtained for the accounting year 1984-85, for the purpose of computing the extent of eligibility of the assessee to claim partial exemption of tax under the notification. We may also consider here, that it is by chance that in the relevant accounting year 1984-85 there was one unit, being manufacturer of white cement in 1984-85 in the State and therefore, the controversy has arisen, rather raised by the petitioner for claiming partial exemption on the basis of the input figures of that industry, but if that industry also would not have been there, the question is, as to whether the assessee could claim partial exemption on the basis of the input figures of other cement industry, which might have existed in the accounting year 1984-85, and in our view, the answer to this also has to be in the negative, inasmuch as, in that event, the assessee would not have been entitled to claim partial exemption under this notification, for want of existence of other manufacturer in the State, in the “relevant industry” during the accounting year 1984-85. 9 Then so far as the aspect of white cement manufactured by the assessee to be comparable with other varieties of cement is concerned, that has already been considered by the learned Single Judge threadbare, and what we find is that, that comparison and distinction has been made, only for the purpose of finding, as to whether the other manufacturers of other species of cement can be said to fall within the expression “of other manufacturer in the relevant industry”, and the aspect has been considered on the basis of the judgment of the Hon'ble Supreme Court, also approving the judgment of Calcutta High Court. At page 11, the learned Single Judge has also taken this view, that “the other manufacturer in the State in the relevant industry” appears to be a common parlance tax criteria, with which the commodity is known in the trade, and has noticed the common parlance distinction between Portland gray Cement, and the While Cement in general. In our view, thus, the impugned judgment does not suffer from any error, requiring interference by us in appeal. The appeal thus, has no force, and is dismissed. ( GOVIND MATHUR ),J. ( N P GUPTA ),J. /tarun/