Steelwyn Shutters and Engineering Works vs Additional Commercial Tax Officer, VI Circle, Mangalore and Another

S.R. Rajashekara Murthy, J.—The petitioner is a registered dealer under the Karnataka Sales Tax Act, 1957, and his industry is recognised as a tiny section industrial unit as defined in Notification dated March 31, 1983, issued by the Government in exercise of its powers conferred u/s 8A(1)(b) of the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957) (hereinafter referred to as "the Act").

The petitioner commenced commercial production on August 29, 1983. To obtain the benefit of the government Notification, the petitioner had to make an application for the said purpose before the assessing authority within three months from the date of the start of his commercial production.

On the facts of the present case it is urged by the learned counsel for the petitioner that the application as required under clause (3) of the notification could not be made earlier since he was not able to obtain necessary certificates from the Department of Industries and Commerce. The certificate by the Department of Industries and Commerce is to be issued to the petitioner that the petitioner''s industry is a tiny section industrial unit. It is seen as per annexure A that the certificate was issued on November 28, 1984. A new unit certificate was issued on July 26, 1984, as per annexure C which indicates also the date of the first production. On May 25, 1985, the Department of Industries and Commerce also gave certificates as to the value of the fixed assets as per annexures D and E.

Accordingly, the petitioner appears to have claimed exemption under the Government Notification producing all the certificates referred to above, before the first respondent, who, by his endorsement dated September 18, 1986, rejected the claim for exemption as per annexure G. This was followed by an order of assessment made on August 18, 1987, for the year ending March 31, 1986, as per annexure K. This assessment order and the endorsement, rejecting the claim for exemption, are challenged in this writ petition.

It is urged by Sri Indra Kumar, learned counsel for the petitioner, that all the necessary certificates were produced before the assessment was done in his case. The claim for exemption was rejected by the first respondent on the ground of non-compliance with the notification and that the application for exemption was made beyond the period prescribed in clause (3) of the Government Notification. He also points out that time-limits of three months and six months referred in the said clause may, however, be extended by the assessing authority in his discretion, but not exceeding one year, depending upon the circumstances of each case. It is contended that the maximum time-limit prescribed in the notification being one year, is unreasonable and defeats the object of extending the benefit of exemption to tiny section industrial units, if they are not able to obtain all the necessary certificates within that time.

It is argued on the facts of the present case that the petitioner was not able to obtain several certificates required to be produced before the assessing authority and he was able to secure them only during second half of the year 1984 and the valuation certificate was given only during May, 1985, by the Department of Industries and Commerce and a certificate as to the investment was given during July, 1986. It is, therefore, urged that delay caused in producing necessary certificates was not attributable to any negligence on the part of the petitioner but the delay was caused by the Department of Industries and Commerce to issue necessary certificates, to claim exemption.

I have considered the reasons put forth for the delay in producing the certificates before the first respondent and also the reasons to reject the claim for exemption. On the facts of the present case and having regard to the several dates of issue of certificates by the Department of Industries and Commerce which were produced before the assessing officer before assessment order was passed, it would have been in the interests of justice if the assessing officer entertained the certificates and condoned that delay.

But, it is urged by Sri H. L. Dattu, learned High Court Government Pleader, that the hands of the assessing officer are tied by virtue of the time-limit fixed in the notification. Therefore, I am satisfied that this is a fit case in which I should direct the respondent to receive the certificates and consider his claim for exemption under the Government Notification dated March 31, 1983.

In the result the writ petition as allowed and the assessment made as per annexure K and the notice of demand issued as per annexure L are quashed. The first respondent is hereby directed to entertain the certificates and consider the claim of the petition in accordance with law.

Writ petition allowed.