Khalsa Body Builders vs State of Punjab and Others

T.H.B. Chalapathi, J.—The petitioner is running a small scale industry under the name and style of ''Khalsa Body Builders'' at Hoshiarpur. It started its industry after having been registered under Punjab General Sales Tax on 17.5.1989. Later, it was registered as a Small Scale Industry vide Registration Certificate bearing No. 16/106/95961/PMT0SSI dated 7.2.1990. According to the petitioner, the industry is engaged in the manufacture of all kinds of Truck and Bus bodies. The new Industrial Policy of 1989 was issued on 30.3.1989 granting certain incentives to the new industries in regard to capital subsidy to the tune of 25% subject to a maximum of Rs. 25 lacs in ''A'' Grade Growth Areas, 15% subject to a maximum of Rs. 15 lacs in ''B'' Grade Growth Areas and 10% subject to a maximum of Rs. 10 lacs in ''C Grade Growth Areas and sales tax incentives of 125% on fixed Capital Investment in respect of sales of small scale industries for a period of 7 years from the date of starting production subject to a maximum of Rs. 4.50 crores.

The petitioner-applied for the grant of incentives under the new policy of March 31, 1989. The same was rejected by the authorities On 11.4.1991 vide Annexure P-11 and 9.9.1992 vide Annexure P-12. Challenging the same, the-petitioner filed this writ petition.

In the written statement filed by the respondents, it is contended inter alia that the petitioner is only doing fabrication activities and not covered for any incentives under the Punjab Government Industrial Policy, 1989. According to the respondents, the policy itself indicates that all fabrication products using Tin, GP/GC sheets are not eligible for State Capital Subsidy and sales tax incentives. It is further averred that since manufacturing of Bus/Truck Body is a fabricating activity, the petitioner will not come within the purview of Industrial Policy of 1989. Therefore, the writ petition is liable to be dismissed.

There is no dispute that new industrial policy was promulgated by a notification dated 30.3.1989 by the Punjab Government. According to the petitioner, its unit is entitled to incentives as provided in the Industrial Policy of 1989. But according to the respondents, the petitioner''s unit is not entitled to any incentives.

Paragraph 4(xi) of the Policy reads as follows:-

"4(xi) No Incentive Industries

Units engaged in industrial activities contained in Annexures II and III shall be ineligible for the State subsidy and the incentives of Sales Tax Exemption/Deferments. These Annexures shall be subject to change by the Committee constituted for the purpose."

Item No. 12 in Annexure II of the Policy includes all fabrication products using tin, GP/GC sheets and item No. 24 in Annexure - III of the Policy includes all fabrications and products using tin/GP/GC sheets. By a notification dated 21.12.1990, item No. 12 of Annexure II was amended by substitution as under :-

"Purely fabricated products using primarily tin/GP/GC/BP and aluminium sheets."

There is no denial of the fact that the petitioner''s unit is engaged in body building of the Buses and Trucks. The body Building Industry is primarily a fabricating product mainly using Tin, GP, GC, BP and aluminium sheets. The fact is that some other materials like wood, plastic, cushions, iron rods, electrical goods and paints are also used in body building, but the activity is not excluded from item No. 12 of the Industrial Policy of 1989 dated 30.3.1989 or under the amended item No. 12 of Annexure II in the Notification dated 21.12.1990. Notification of 1989 clearly envisages that Annexures are subject to change by the Committee constituted for the purpose. It further stipulates that the industrial activities contained in Annexures II and III of Policy of 1989 are ineligible for State subsidy and incentives of sales tax exemption/deferment. The activity of the petitioner is clearly covered by item No. 12 of Annexure II and also item No. 24 of Annexure III. Therefore, the request of the petitioner for exemption/determent under the Industrial Policy was primarily rejected on the ground that the work of body building of buses/trucks is only a fabrication work and under the policy, fabrication work cannot be considered for concession.

On a close reading of Policy of 1989 and also the Notification dated 21.12.1990, I am of the opinion that the petitioner''s activity is only fabricating the body building primarily using tin, GP, GC, BP and aluminium sheets. The fact is that while fabricating the body building, the items, other than tin, GP, GC, BP and aluminium sheets, viz. wood, plastic, cushions, iron rods, electrical goods and paints are also used. Therefore, the activities of the petitioner''s unit cannot be said to be outside the purview of item No. 12 of Annexure II and item No. 24 of Annexure III. Without using the tin, GP, GC, BP and aluminium sheets, the activity is not complete. The user of these sheets is primarily necessary for body building activity. The use of other items like wood, plastic, cushions, iron-rods and electrical goods are the subsidiary only in order to complete the work. It is not the case of the petitioner that he has not been using any tin, GP, GC" BP and aluminium sheets while fabricating the body building of the buses/trucks. I am, therefore, of the opinion that the petitioner''s unit will not come under the new Industrial Policy of the State of Punjab as envisaged in the Notification dated March 30, 1989. I, therefore, do not find any grounds warranting interference with the impugned orders vide Annexures P-11 and P-12. The writ petition is, therefore, liable to be dismissed.

The result is, the writ petition fails and is, accordingly dismissed. There will be no order as to costs.