JUDGMENT
U.B. Saha, J.
1. This writ appeal arises out of the judgment and order dated November 11, 2002 passed in Civil Rule No. 569 of 1993.
2. Heard Mr. K. N. Choudhury, learned Senior Counsel for the respondents/ appellants and Dr. A. K. Saraf, learned Senior Counsel for the petitioner/ respondent.
3. The facts, in brief, short of details, call for consideration to dispose of this appeal, lie in narrow compass, are that the writ petitioner, respondent herein, M/s. Mahavir Coke Industries, a private limited company under the Assam Finance (Sales Tax) Act, 1956 (hereinafter referred to in short as, “the State Act”) (since repealed), engaged itself in manufacturing/processing of coal into coke. As per the said Act, coal and coke are the taxable items vide entry No. 46 of the Schedule attached under the State Act. To promote industrial growth and development of the State, the Government of Assam came with a new industrial policy by a notification dated October 12, 1982 (for short, notification) wherein the State Government provided exemption from sales tax and octroi, concession in water and power tariff, transport and capital investment subsidy and various tax concessions. The scheme of exemption of sales tax, etc., was for a period of five years on sale of raw materials and finished goods produced by the newly established industries. To give effect to the aforesaid scheme, the State of Assam passed an Act, namely, the Assam Industries (Sales Tax Concessions) Act, 1987. The petitioner/respondent claims that it is entitled to get exemption from sales tax for the goods produced by it under the State Act as well as the Central Sales Tax Act, 1956 (for short, “the Central Act”) under the provisions of Section 3B of the State Act read with notification and Section 8(2A) of the Central Act. Accordingly, the petitioner submitted its return for the assessment period of 1986-88 before the Superintendent of Taxes, Guwahati, i.e., the assessing authority (for short, “the A. O.”). The A. O. after proper assessment determined the tax liability of the petitioner/respondent for the assessment period of 1986-88 as nil in view of the aforesaid provisions of Section 3B of the State Act and Section 8(2A) of the Central Act. Subsequently, all on a sudden, a show cause notice dated June 6,1992 was served upon the petitioner/respondent on June 17, 1992 by the Assistant Commissioner of Taxes for suo motu revision of the assessment order and the petitioner/ respondent replied to the said show cause notice on August 28,1992. Thereafter, the Assistant Commissioner of Taxes, Zone-B, Guwahati, vide order dated January 28, 1993 cancelled the assessment order on December 31, 1991 which was passed by the A. O. and directed him to make fresh assessment levying due taxes and interest on the petitioner/respondent for the assessment period extending from March 31, 1986 to March 31, 1988 under the Central Act. Consequent thereupon, the A. O, issued a notice dated March 1, 1993 directing the petitioner to appear on March 10, 1993 in connection with suo motu order dated January 28,1993 of the Assistant Commissioner of Taxes under Section 31(1) of the State Act read with Section 9(2) of the Central Act for rectification of the assessment.
4. Being aggrieved by the notice dated March 1, 1993 issued by the A. O. and the order dated January 28, 1993, passed by the Assistant Commissioner of Taxes, Guwahati, the petitioner/respondent filed the writ petition in question for quashing and/or setting aside the aforesaid two orders by declaring that the petitioner/respondent is not liable to pay any tax on the inter-State sales effected by it of the goods produced in the new industrial unit of the petitioner/respondent, as those goods are exempted in general under the notification read with provisions of Section 3B of the State Act and Section 8(2A) of the Central Act.
5. The respondents/appellants filed their affidavit-in-opposition denying the contention of the petitioner/respondent in the writ petition.
6. After hearing the learned Counsel for the parties, the learned single Judge allowed the prayer of the petitioner/respondent vide judgment dated November 11, 2002 passed in Civil Rule No. 569 of 1993. Consequently, the order dated January 28, 1993 passed by the Assistant Commissioner of Taxes, Guwahati as well as show cause notice dated March 1, 1993 issued by the A. O. was quashed.
7. Dissatisfied with the aforementioned judgment and order of the learned single Judge, the respondents/appellants preferred the present writ appeal.
8. The moot questions which arise for decision in this writ appeal are whether the petitioner/respondent is entitled to be exempted from the sales tax under notification read with the provisions of Section 3B of the State Act and Section 8(2A) of the Central Act and in what circumstances, the power of revision under Section 31(1) of the State Act can be exercised; and whether the judgment of the learned single Judge is good in law or not.
9. Mr. Choudhury, learned Senior Counsel for respondents/appellants, supporting the order of the Assistant Commissioner of Taxes submits that the tax authority (for short, “Revenue”) has the right to set aside and/or cancel the order of the assessing authority as the assessing authority committed error providing the benefit of exemption to the petitioner/ respondent, even when it is not entitled to the said benefit of exemption under Section 8(2A) of the Central Act as the notification issued by the State providing exemption of sales tax is conditional, not general in nature. Mr. Choudhury also submits that as the scheme/notification issued by the State is a conditional one, the same does not cover the requirement of Section 8(2A) of the Central Act. Therefore, the petitioner is in no way entitled to tax exemption as allowed by the assessing authority, particularly by the Explanation given thereunder. Mr. Choudhury, learned Senior Counsel, again contends that the learned single Judge failed to consider the ratio of the case law cited before him by the parties. The law ought to have been considered on the day of assessment and/or order of the Assistant Commissioner passed in review, i.e., the law prevailing at the time of assessment. But the learned single Judge failed to do so, as the learned single Judge considered the case of Pine Chemicals Ltd. v. Assessing Authority , wherein it was held that the tax on the sale of products, which is exempted under the State Act is also exempted from taxes under the Central Act in respect of inter-State sale and the judgment of this Court in Victor Cane Industries v. Commissioner of Taxes , wherein this Court held:
From the above, it can reasonably be said that despite the fact that it was brought to the notice of the apex court that the earlier view expressed in Pine Chemicals Ltd. v. Assessing Authority stood reversed in Commissioner of Sales Tax v. Pine Chemicals Ltd. , yet the apex court did not review the order passed in the S.L.P. inasmuch as the division Bench judgment of this High Court in Mahavir Coke Industries case [1995] 97 STC 186 case was on the basis of the then existing law, i.e., Pine Chemicals Ltd. v. Assessing Authority and could not be said to be wrong just because later on that view was upset in Commissioner of Sales Tax v. Pine Chemicals Ltd. . We agree with the learned Counsel that law laid down in tax matters should normally be applied prospectively. No tax was collected by the appellant from the purchasers as per the law then existing.
On the basis of what has been observed above, we are of the view that on the day the assessment order was passed and even on the day when the Assistant Commissioner of Taxes passed the order on July 31, 1992 the law then existing was as per Pine Chemicals Ltd. v. Assessing Authority as also the earlier law of this Court and the various other High Courts. The orders of assessment could not be said to be erroneous and prejudicial to the interest of the Revenue. We are in respectful agreement with the view expressed by the Punjab and Haryana High Court in State of Haryana v. Free Wheels (India) Ltd. [1997] 107 STC 332 that simply because the law has been changed or earlier law laid down has been reversed, that would entitle the revisional authority to reopen the earlier assessments. The learned single Judge has not gone into this aspect of the matter.
10. According to Mr. Choudhury, learned Senior Counsel, the aforesaid cases are not the law on the field at the time of order of assessment as well as review of the order of the Assistant Commissioner. According to him, the law on the date was the case of Indian Aluminium Cables Ltd. v. State of Haryana , wherein it has been held that the Explanation to Section 8(2A) of the Central Act takes away the exemption where it is not general in nature and has been granted in specified circumstances or under specified conditions. He also tried to make out a distinction between the goods and the industries. According to him, general exemption means that the goods should be totally exempted from tax before similar exemption from the levy of Central sales tax can become available. But in the instant case, the scheme of the State is for exemption for newly established industries for five years. Hence, it is a conditional one, not for any specific goods and the exemption of taxes is not general in nature, rather it has been granted in specific circumstances or under specific conditions. Therefore, the petitioner is not entitled to the benefit of exemption under the Central Act. Referring to a decision of this Court in the case of Muli Bash Hasta Silpa Samabaya Society Ltd. v. State of Assam , Mr. Choudhury submits that though in the said decision, the division Bench of this Court stated what is to be seen as to what is the law prevailing on the day when the assessment order is passed, but the court in that case also decided that all products of village industries sold by producers or organisation certified as aforesaid are exempted from tax under the State law and the exemption is general in nature and not in the particular circumstances or under specified conditions; the exemption has to be treated as a general one within the meaning of Section 8(2A) of the Central Sales Tax Act, 1956 which is itself a contradictory one. The division Bench ought to have decided the case of Muli Bash Hasta Silpa Samabaya Society Ltd. [1992] 1 GLR 46 in the light of decision rendered by the apex court in Indian Aluminium Cables Ltd. [1976] 38 STC 108 (SC); [1976] 4 SCC 27 as that was the law on the date of assessment in that case. He also submits that the said decision in Muli Bash Hasta Silpa Samabaya Society Ltd. [1992] 1 GLR 46 is per incuriam in view of the law laid down by the apex court in the aforesaid cases. According to Mr. Choudhury, the decision of Muli Bash Hasta Silpa Samabaya Society Ltd. [1992] 1 GLR 46 is not binding on us though the said decision is a decision of a co-ordinate Bench of this Court as the said decision is contrary to the law laid down by the apex Court in the case of Indian Aluminium Cables Ltd. .
11. In reply to the submission of Mr. Choudhury, learned Senior Counsel for the appellants, Dr. Saraf, learned Senior Counsel for the petitioner/ respondent submits that the case in hand is fully covered by the judgment of this Court in Muli Bash Hasta Silpa Samabaya Society Ltd. and the case of Pine Chemicals Ltd. v. Assessing Authority as those cases were the law of the State and land, respectively. Dr. Saraf also submitted that the Assistant Commissioner wrongly exercised his jurisdiction under Section 31(1) of the State Act, as there was no wrong in the decision of the assessing officer as the assessment order was not prejudicial to the interest of the Revenue. According to him, satisfaction must be done which is objectively justifiable and cannot be ipso dixit of the Commissioner. He further submits that power under Section 31(1) must be exercised on the basis of the material available at the time the power is exercised. In support of his contention, Dr. Saraf submitted a decision of the apex court in Commissioner of Income-tax, Bhopal v. G.M. Mittal Stainless Steel P. Ltd. , wherein it was held:
… Given the fact that the decision of the jurisdictional High Court was operative at the material time, the Assessing Officer could not be said to have erred in law. The fact that this Court had subsequently reversed the decision of the High Court would not justify the Commissioner in treating the assessing officer’s decision as erroneous. The power of the Commissioner under Section 263 of the Income-tax Act must be exercised on the basis of the material that was available to him when he exercised the power. At that time, there was no dispute that the issue whether the power subsidy should be treated as capital receipt had been concluded against the Revenue. The satisfaction of the Commissioner, therefore, was based on no material either legal or factual which would have given him the jurisdiction to take action under Section 263 of the Income-tax Act.
12. Dr. Saraf also relied on a case of State of Haryana v. Free Wheels (India) Ltd. reported in [1997] 107 STC 332 (P&H) to show that law on the day of the assessment has covered the field in the decision subsequent to the order of assessment. He also supports the decision of this Court in Victor Cane Industries . In reply to the submission of Mr. Choudhury, he also placed reliance on some more decisions on the principle of doctrine of sub silentio and when the decision of a co-ordinate Bench is binding on another division Bench. We are not referring those decisions in this judgment, as those are not necessary for adjudication of the present case. Dr. Saraf also submits that there is no wrong in the judgment of the learned single Judge. According to him, mere citation of two case laws, namely the case of Pine Chemicals and Victor Cane Industries , cannot be a ground for quashing the said judgment when the judgment is based on the law on the subject, i.e., the case of Muli Bash Hasta Silpa Samabaya Society Ltd. and Pine Chemicals . We find sufficient force in the submission of Dr. Saraf, learned Senior Counsel for the petitioner/respondent. Therefore, we are fully in agreement with him and unable to accept the submissions of Mr. Choudhury, learned Counsel for the respondents/appellants.
13. We have given our anxious thought in the matter. According to us, the conditions imposed in the notification are the statutory conditions as in Section 3B of the State Act, and whether it is there in the notification or not it is immaterial. For better appreciation, Section 3B of the State Act is quoted hereunder:
3B. Exemption for new industrial units.-Notwithstanding anything contained in this Act the State Government may, by notification in the Official Gazette and subject to such conditions as may be specified therein, direct that no dealer shall be liable to pay tax under this Act in respect of sale of such goods produced by him in any such new industrial unit as may be specified in the notification for a period of five years from the date of commencement of production in such new industrial unit:
Provided that exemption under this section shall not be granted in respect of any sale where the dealer has collected any amount by way of sales tax in any form or manner in respect of such sale.
14. The benefit provided by the provisions of Section 3B of the State Act to the dealers, the newly established industries, like the writ petitioner/respondent for the goods produced by it was again confirmed by the notification/ scheme relating to exemption. Hence it cannot be said that the notification issued by the State is conditional but general in nature as by the said notification benefit was provided to the goods produced by the newly established industries. We have considered all the citations referred by the rival parties as well as the records available to us. We come to a conclusion that the case of Indian Aluminium Cables Ltd. cannot be the law at the time of order of assessment of the petitioner, as their Lordships did not consider in that case regarding the exemption to the goods produced by the new industries, rather the case of Muli Bash Hasta Silpa Samabaya Society Ltd. and the Pine Chemicals are the law on the relevant time. The decision of the learned single Judge in the impugned judgment is fully based on the division Bench in Muli Bash Hasta Silpa Samabaya Society Ltd. . For mere reference of the decisions of Pine Chemicals and Victor Cane Industries , would not alter the decision of the learned single Judge in the impugned judgment. We are with full agreement with the decision of the learned single Judge except the facts relating to reference of case of Pine Chemicals and Victor Cane Industries . According to us, when the provisions of Section 3B of the State Act provided certain benefits of exemption of sales tax to the petitioner being a new industrial unit, notwithstanding anything contained in that Act and the State Government, when consequent thereupon, issued the notification for promoting the growth of speedy industrial development in the State providing for exemption of sales tax to the goods produced by those industries for a period of five years, the Assistant Commissioner of Taxes should not take away the benefits of exemption of sales tax of goods produced by the new industries established in the State including the petitioner/respondent. We find that the Assistant Commissioner wrongly exercised his power under Section 31(1) of the State Act because he failed to consider the law covered the field relating to exemption of tax to a new industry at the relevant time of order of assessment and passed an order quashing the order of assessment on a wrong presumption.
15. In the aforesaid facts and circumstances of the case, we affirm the order of the learned single Judge and dismiss the writ appeal. No order as to costs.