Case: M/s. Tata Iron &amp; Steel Co. Ltd Vs. State of Jharkhand &amp; Others

3. The fact of the matter is being notified from Civil Appeal No. 1912 of 20044. The Appellant, as 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 dealer both under the Central Sales Tax Act, 1956 and the Bihar Finance Act, 1981 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 lakhs tons per annumExemption Claimed for New Industrial Unit:5. The Government of Bihar issued as 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 1981 Act in respect of tax on purchase or sale of certain goods manufactured by new / expanded / diversified / modernized units. Pursuant to or in the 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 Jharkhand was created with effect from 15.11.2000, as a result whereof, inter alia, the 1981 Act was extended to the State of Jharkhand6. The Appellant claimed benefits of the aforementioned notification Nos. 478 and 479 dated 22.12.1995 whereupon by an order dated 16.12.2000 the benefit of exemption in respect of its Cold Rolled 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 Such grant of exemption, however, was withdrawn by the Commissioner of Commercial tax is exercise of its suo motu power of revision holding that as both Cold Rolled Product and Hot Rolled Product find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 benefits claimed7. Aggrieved, the Appellant filed a writ petition before the Jharkhand High Court which was marked as CWJC 1426 of 2001. 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 3.4.2001 and remitting 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 product vis-a-vis hot rolled product8. An application for grant of Special Leave from 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. 2188 of 2002. This Court by judgment and order dated 25th August, 2004 (since reported in (2004) 7 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 confirm 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 money in installing its new industrial unit. At every stage of the construction, progress and installation of the machineries, the Government/authorities concerned were informed and at no point of time it was suspected that the new unit was going to manufacture HRM. The process of manufacturing HRM and CRM as could be seem from the experts opinion is totally different and the material on record also shows that the plant design for a new unit is for the purpose of 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 erroneous, we find the ends of justice would not be served by remanding the matter for further inquiryEXEMPTION CLAIMED FOR EXISTING INDUSTRIAL UNIT:9. In the meanwhile the State of Jharkhand declared its Industrial Policy on or about 25.8.2001 for the period 15th November, 2000 to 31st March, 2005; para 28.1 whereof inter alia provided for set off / 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 off10. Three notifications bearing Nos. 65, 66 and 67 dated 12th January, 2002 were issued thereafter in terms of Sections 22, 23 and 13(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 rates 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 come under the purview of set off of tax11. 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 was rejected by the Deputy Commissioner of Commercial Tax by an order dated 13.3.2002 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 25.3.200312. A writ petition thereagainst was filed which was marked as WP(T) No. 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 unit, but as the litigation in relation to CRP was pending before this Court, the matter was remitted granting leave to the Appellant to make a fresh claim under the Industrial Policy, 2001 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 claim the benefit under the 2001 Policy of the State of Jharkhand.

Court's reasoning:
27. S.O. 479 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 industrial units which started production from 1st September, 1995 to 31st August, 2000 on the sales of finished goods produced by them under the terms and conditions specified therein36. 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 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 thereto37. 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 component36. 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 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 thereto37. 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 component36. 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 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 thereto37. 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 component41. The notification dated 12th January, 2002, although extends the tax 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. 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 thereof43. 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 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 interpretation43. 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 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 interpretation62. 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 the power to implement the representation62. 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 the power to implement the representation63. The Appellant furthermore had also understood the legal position in the same manner as would appear fro its letter dated 11th February, 2002 wherein it was contended that it is an existing industry prior to 15th November, 200