JUDGMENT
Prasad, J.
1. Heard.
2. The petitioner in this writ petition is a company trading in marble and granite. The petitioner had applied for availing the benefit of Sales Tax Incentive under the Sales Tax Incentive Scheme 1987 (hereinafter referred to as ‘the Incentive scheme’. The petioner was granted the benefit of incentive as admissible under the Scheme of 1987 with effect from 1.1.89 by the District Screening Committee, Sirohi. A certificate to this effect was issued to the petitioner, the copy of which has been produced and marked as Annexure-1.
3. The incentive was for the period of seven years to the tune of Rs. 141 lacs. According to the petitioner, the company was an export oriented unit running well and utilized its potential and the production capacity to its optimum until 1998. But thereafter due to reasons beyond the control of the Company, the production of the project was closed. The petitioner assessed the reasons for closure of the unit as increased cost of interest due to devaluation of rupee and arrival of new and cheaper technologies.
4. The petitioner company had availed a total benefit of more than Rs. 70 lacs for seven years from the 1.1.89 to 31.12.95. The case of the petitioner is that after 1995 the petitioner had continued its production upto 1998-99 but thereafter it had to close down its unit. In the background of closure of the unit of the petitioner, notice was served on the petitioner dated 17.5.99 by the assessing authority to show cause as to wfiy the case should not be referred to respondent No. 2 for revoking the benefits of Incentive Scheme for non-compliance of condition mentioned in Clause 4(e)(i) of the Incentive Scheme. Clause 4(e)(i) of the Incentive Scheme is reproduced below for ready reference :
“The incentive referred to above shall be subject to the condition that the beneficiary industrial unit after having availed the benefit of Incentive Scheme.
(i) shall continue its production atleast next 5 years not below the level of average production for the preceding 5 years.
5. Such a notice was issued to the petitioner for the aforesaid infringement under the powers available to the authorities under the powers available to the authorities under Clause 9(b) of the Incentive Scheme. Clause 9(b) of the Incentive Scheme is reproduced below for ready reference :
“The assessing authority under the RST Act, 1954 having jurisdiction shall, either suo motu or on receipt of an application in this behalf, and after affording an, opportunity of being heard to the industrial unit, if he is satisfied that a breach of any of the conditions mentioned above has been committed, obtain the prior permission of the CCT before taking legal action under the provisions of the RST Act for the purpose of levy of tax on the finished goods not taxed under the tax exemption scheme as if there was no exemption and there was escapement of tax. The CCT, in case he concurs with the findings of the assessing authority, shall before according such permission to the assessing authority (consult) the appropriate Screening Committee.”
6. The basic contention of the respondent department was that the petitioner company had failed to maintain the average production level for the period of five years after availing the benefits of Incentive Scheme as contemplated in Clause 4(e)(i) of the Incentive Scheme. As per Clause 4(e)(i) of the Scheme, the petitioner company was required to maintain the level of production and it was not permitted to lower down it below the level of average production of five years preceding the availing of the incentive. Admittedly, the petitioner’s unit closed in the year 1998. The benefit of Incentive Scheme was availed by the petitioner in 1996. The unit having been closed in 1998, it was within five years of the availing of the incentive, Thus, there was an infringement of condition Clause 4(e)(i) of the Incentive Scheme.
7. The petitioner replied to the notice and pleaded that the reasons were beyond the control of the petitioner company and it had to be shut down. The petitioner had bonafidely continued production and paid all necessary dues to the financial institutions but market conditions did not favour him and they forced the closure of the unit. Thus, the closure was on such factors which were beyond the control of the petitioner.
8. The respondent Commissioner after receiving the reply from the petitioner passed the order Annexure-8 whereby the Commissioner was of the opinion that the reply of the petitioner is not satisfactory and the petitioner is liable to be proceed against under Clause 9(b) of the Incentive Scheme. There is a clear infringement of Clause 4(e)(i) because he had not maintained the level of production as required under the Scheme for five years after availing of the incentive scheme.
9. In the present writ petition, the petitioner impugns the order Annexure-8 dated 11.3.2002 and notice dated 17.5.99 (Annexure-4). The case of the petitioner as set up in the writ petition is that it is riot authorised to the Commissioner to invoke powers under Clause 9(b) of the Scheme after 1996 because five years as contained in Clause 4(e)(i) of the Incentive Scheme have to be counted from the date of passing of the order of award of incentive to the petitioner.
10. The case of the petitioner is that under Section 30 of the Rajasthan Sales Tax Act, the limitation provided is five years and no re-opening is possible after five years. The present order has been passed in year 2002 which is also beyond limitation.
11. Further, the petitioner’s case is that the period he had continued and maintained the level of production as required under the Scheme, for that period no charges can be made from the petitioner and that the incentive was granted to the petitioner by the District level Screening Committee and the Commissioner on its own without there being effective consultation could not have revoked the incentive granted to the petitioner as provided under Clause 4(e)(i) of the Incentive Scheme.
12. Admittedly, in the case, only a letter was written to the District Level Committee and no reply from the District Level Committee has been received. Thus, there was no effective consultation.
13. The State was issued notice. Learned counsel for the State though has not filed reply but has orally argued that consultation does not envisage concurrence, The District Level Committee was intimated by the letter of the Commissioner that in case, no reply is received, it would be deemed that District Level Committee has no objection if the incentive granted to the petitioner is revoked. No reply was received for two years. Since the time limit granted to District Level Screening Committee for reply had expired, it was concluded by the Commissioner that the District Level Committee had no objection.
14. Learned counsel for the State has further urged that the words of the Scheme are clear enough to bring in the case of the petitioner within the ambit of Clause 4(e)(i) of the Incentive Scheme because the requirement of the Scheme is that the production level was to be maintained at least for the next five years and not below the level of the average production for the proceeding five years. Five years for which the petitioner was required to maintain the level has a reference embodied into it to the words “having availed the benefit”. The purport of these words emphasises that the level was to be maintained after the petitioner having availed the benefits i.e. after the period of the incentive was over and thus, the contention of the learned counsel for the petitioner that he had maintained the level upto 1996 from 1989 is of no avail. The petitioner was required to maintain the level from 1996 to 2001. Having not done so, there is a clear infringement of condition Clause 4(e)(i) and the interpretation put forward by the petitioner cannot be accepted without there being violance of language of the Statute.
15. The argument of the learned counsel for the petitioner in relation to Section 30 of the Rajasthan Sales Tax also cannot be accepted. Clause 9(b) of the Incentive Scheme requires the petitioner to be included in the category of those where reopening was to be ordered as case of ‘escapement’ of tax. The liability of the petitioner is to be judged after he was required to do it. He was required to maintain the level for five years from the day the incentive was availed by the petitioner. That period starts from 1996. For five years, the respondents had to watch the performance of the petitioner. The interpretation which was sought to be given by the learned counsel for the petitioner does not fit in the very scheme of the Statute governing the case. The things can occur only after five years and if the limitation of five years is read in as provided in Section 30 of the Sales Tax Act, the provisions will remain un-enforceable because that will always be time barred. Thus, this interpretation would mean that there is a law which is self- defeating. Such cannot be the intention of the law makers. That being the position, the argument put forward by the learned counsel for the petitioner cannot be accepted.
16. Further, the learned counsel for the petitioner has urged that the respondent cannot recover for the entire period because for some time only the petitioner was required to maintain the level. This argument in the first instance appears to be attractive but then, the moment it is found that petitioner has not maintained the level for five years as provided in Clause 4(e)(i) of the Incentive Scheme, there can be recovery for all the period. It was for the tax authorities before whom the petitioner could have canvassed his case. In that background, this court under Article 226 of the Constitution of India will not enter into realm of appreciation of statistical figures. The remedy of the petitioner lies with the department. The petitioner was required to put his case effectively before the department and convince them if at all that was legally permissible.
17. Learned counsel for the petitioner further relied upon a case decided by this court in S.B.P. Chem Pvt. Ltd. v. State of Rajaslhan and Ors., 1993 (90) STC 382, It is argument by the counsel for the State that the law relied upon by the learned counsel for the petitioner does not help the petitioner because in that case there was something required to be done by the authorities. In the instant case, everything was required to be done by the petitioner itself. It was required to maintain the level of production which it failed. That being the position, the interpretation of the Statute has to be done in the way in which Statute refers a situation to be dealt with. In the present situation, law is very clear that if the production level is not maintained, then the incentive is required to be revoked. If in the background of violation of this condition, the incentive has been revoked, then that is in the ambit of Clause 9(b) of the Incentive Scheme and thus no infirmity can be seen because the action of the Commissioner is within the domain conferred to him by Clause 9(b). A reference in this regard may be made to a case decided by Hon’ble Supreme Court in the case of ‘State Level Committee and Anr. v. Morgardshammar India Ltd.’, 1996 STC 1, wherein Hon’ble Supreme Court has reiterated this law by observing that the taxing statutes are to be construed strictly. The relevant portion of the judgment is reproduced hereinbelow :
“All the words used in Clause (a) of the Explanation have to be given their meaning. None of them can be treated as a surplusage. It is not also possible to ignore the words expressly employed in that clause or to explain them away on one’s own not notions of reasonableness.
A provision in a taxing statute providing for an exemption or an exception has to be construed strictly.”
18. In view of the above the law cited by the learned counsel for the petitioner has no application.
19. Learned counsel for the petitioner has relied on a decision rendered in ‘M.M. Gupta and Ors. v. State of J. & K. and Ors.’, AIR 1982 1579,
“The facts which we have earlier set out establish that after the High Court had forwarded its recommendations and thereafter sent the detailed comments alongwith a copy of the resolution as requested by the Government. The State Government without any further intimation to the High Court or without any kind of discussion with the High Court had made the appointment of respondents Nos. 3, 4, 5 and 6, ignoring the recommendations made by the High Court. The facts further go to indicate that on receipt of the detailed comments and the resolution a cabinet sub-committee had considered the matter and on the recommendations made by the Cabinet sub-committee, the Governor did not act on the recommendations made by the High Court but made the appointments on the recommendations of the sub committee. The recommendations of the sub-committee were never communicated to the High Court and the State Government had not discussed or sought the views of the High Court on the findings and recommendations of the cabinet sub-committee. It is, therefore, abundantly clear from the facts of the present case that the counter- proposals sought to be made by the Government in the matter of appointment were never communicated to the High Court and the High Court’s views on the said proposals of the Government were never asked for and the High Court was not at all consulted in the matter of Government’s proposals to appoint respondents Nos. 3, 4, 5 and 6 as District Judges. It is well settled that consultation or deliberation is not complete or effective before the parties thereto make their respective points of view known to the other or others and discuss and examine the relative merits of their views. If one party makes a proposal to the other who has a counter prop6sal in his minds which is not communicated to the proposer, the direction to give effect to the counter proposal without anything more, cannot be said to have been done after consultation. We are, therefore, of the opinion that in the instant case there has not only been no effective or complete consultation but, in fact, there has been complete lack of consultation in the matter of appointment of Respondents Nos. 3, 4, 5 and 6. We must, therefore, hold that the appointment of the Respondents Nos. 3, 4, 5 and 6 in the absence of consultation with the High Court must be held to be violative of the constitutional requirement and therefore, invalid. The impugned order appointing respondents Nos. 3, 4, 5 & 6 has, therefore, necessarily to be quashed.”
20. According to the argument of the learned counsel for the petitioners, counter offer of the District Level Committee has not been made to the respondents and, therefore, there was no effective consultation.
21. Learned counsel for the petitioner also relies on a Supreme Court decision rendered in Prakash Chand Maheshwari and Anr. v. The Zila Parishad and Ors., AIR 1971 SC 1696. The relevant portion of the judgment is reproduced hereiribelow :
“The last point raised by the petitioners relates to the appointment of the Kar Adhikari on the ground that it was not done in consultation with either the Public Service Commission of the State or any other Commissioner or body appointed in that behalf by the State Government Under Section 43 of the, U.P. Kshettra Samithis and Zila Parishads Adhiniyam, 1961 i.e. U.P. Act XXXIII of 1961. The appointment of respondent No. 2 in this case took place on 8th August 1965; the impugned assessment was made on 6th March 1968 i.e. more than two years after the date of appointment. Under Section 43 the appointment of this officer to the part which carried an initial salary of more than Rs. 200 p.m.’ could be made by the Parishad in consultation with the Public Service Commission or other Commission or Selection ‘Body as might be constituted by the State Government and if there was a difference of opinion between the Commission and the Parishad the matter was to be referred to the State Government,-‘ whose decision was to be final. Counsel for the respondents on the materials before this Court was only in a position to in.- form us that the State Public Service Commission had been notified of the appointment and they had not expressed any disapproval of the same. We do not think that this was sufficient compliance with Section 43. In Chandramouleshwar Prasad v. Patna High Court (1) this Court had to consider the question of “appointment of persons to be and the posting and promotion of District Judges” in the State of Bihar which under Article 233(1) of the Constitution were to be made by the Governor of the State in consultation with the High Court. It appeared that there was some difference of opinion between the High Court and the Government of Bihar with regard to certain appointments and promotions of District Judges in the State of Bihar and the Government issued a notification on 17th October 1968 appointing the petitioner as temporary District and Sessions Judge Singh bhum until the appointment of a permanent officer in the vacancy caused by the retirement of an incumbent to that office. This Court found that before issuing the said notification the Government never attempted to ascertain the views of the High Court with regard to the petitioner’s claim or gave the High Court any indication of its views with regard thereto. It was, observed that (P. 674) :
“The Governor cannot discharge his functions under Article 233 if he makes an appointment of a person without ascertaining the High Court’s views in regard thereto……Constitution or deliberation is not complete or effective before the parties thereto make their respective points of view known to the other or others and discuss and examine the relative merits of their views.
Appointing respondent No. 2 as Kar Adhikari and merely sending the papers relating to such appointment to the Public Service Commission would not therefore be in compliance with Section 43 of the Act. Even if it be regarded as a temporary appointment, it could only be effective for two years and as the assessment in this case was made beyond that date it must be held that the assessment was by a person not competent to make it.”
22. Learned counsel for the petitioner has further relied on judgment of Hon’ble Supreme Court in ‘State of Jammu & Kashmir v. A.R. Zakki and Ors.’, AIR 1992 SC 1546. The relevant portion of the judgment is reproduced hereinbelow :
“17. While construing the expression “consultation” this Court has laid down that though consultation does not mean “concurrence”, it postulates an effective consultation which involves exchange of mutual view points of each other and examination of the relative merits of the other point of view. Constitution or deliberation is not complete or effective before the parties thereto make their respective points of view known to the other or others and discuss and examine the relative merits of their views. (See Chandramouleshwar Prasad v. Patna High Court (1970(2) SCR 666 : (6) and M.M. Gupta v. State of Jammu & Kashmir (7). In the context of Article 233 of the Constitution of India which requires that appointments of persons to be, and the posting and promotion of, District Judges in any State shall be made by the Governor of the State in consultation with the High Court exercising jurisdiction in relation to such State, this Court in M.M. Gupta’s case (supra) has observed as under :
“….normally, as a matter of rule, the recommendations made by the High Court for the appointment of a District Judge should be accepted by the State Government and the Governor should act on the same. If in any particular case, the State Government for good and weighty reason find it difficult to accept the recommendations of the High Court, the State Government should communicate its views to the High Court and the State Government must have complete and effective consultation with the High Court in the matter. There can be no doubt that if the High Court is convinced that there are good reasons for the objections on the part of the State Government, the High Court will undoubtedly reconsider the matter and the recommendations made by the High court. Efficient and proper judicial administration being the main object of these appointments, there should be no difficulty in arriving at a consensus as both the High Court and the State Government must necessarily approach the question in a detached manner for achieving the true objective of getting proper District Judges for due administration of justice.” (P 626 of SCR) : (at PP. 1593-94 of AIR).
23. I have considered the argument of the learned counsel for the parties. No doubt the consultation has to be an effective consultation. The letter written by the respondent department was clear and specific to the District Level Committee that in case they have no objection to the proposed order they need not reply. The effect of their silence was defined in the letter itself. The silence having been permitted to the District Level Committee, then if they had nothing to say and keep itself off the record for two years, the Commissioner, Sales Tax was well within his rights to presume that District Level Committee has nothing more to add, than what he has proposed. The District Level Committee has not indicated any contrary intention at any point of time. That being the position, it cannot be said that in the instant case, consultation which was required as condition precedent in the scheme has not been effectively made. There is effective consultation as it can be seen from the sequence of events. The law relied by the learned counsel for the petitioner cannot make out the case in favour of the petitioner.
24. The District Level Committee was advised to answer in relation to the proposed action. No answer was given by the District Level Committee. Consequence was communicated in the letter itself that in case, no reply is received, it will be presumed that the Committee has no objection and, therefore, the present action was taken by the Commissioner. In this background, it cannot be said that there was no effective consultation.
25. Learned counsel for the petitioner has emphasised that the time period of five years was to start from the day when the incentive was offered to the petitioner. Such inference is not possible to be drawn from the Scheme. The scheme clearly states that the Entrepreneur is required to maintain the level of production after availing of the incentive for next five years not below the level of average production for the preceding five years. If such is the law that the level of production is to be maintained after availing of the incentive, then the period is reckoned from the day when the term of avail ends because the law requires that the production level has to be maintained five years after availing the incentive. This is a rider to the availing of the incentive and an expectation is made in the scheme itself that the entrepreneurs will continue to add to the industrial development. That is possible only if after availing the incentive, the production level is maintained. To ensure the same, a five years limit was put by the State to ensure that the defalcation is not made by the industrial units. Thus, the interpretation put forward by the learned counsel for the petitioner cannot be accepted.
26. Another point emphasised by the learned counsel for the petitioner is that for the period it has maintained the level of production, the petitioner should not be visited with penal consequence. This point I think is not possible to be taken up in an exercise which is made on the basis of affidavits only. The scheme is clear and specific. No contemplation is evident from the language of the scheme that the claim is at all possible. Segregation of period and examination of the effect of partial fullfilment can only be examined by respondent department for which the remedy lies with the departmental authorities. The petitioner could have canvassed his case, if he thinks his stand was reasonable. Thus, this court will not go into the area of appreciation of statistics.
27. The question regarding the limitation also loses importance in view of the fact that the period has been prescribed in the regulation for five years for maintaining the level, This maintenance level is for five years and such five years is compared with the earlier five years. Thus, the whole exercise starts only after comparison. In view thereof, the limitation as prescribed in Section 30 of the Rajasthan Sales Tax Act cannot be read as such for the present action. The cause of action in the present context starts with the concurrence of the Commissioner to initiate proceedings and, therefore, view canvassed by the petitioner cannot be upheld.
28. In view of the aforesaid discussion, there is no force in the writ petition. The writ petition is therefore dismissed.