IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 17286 of 2011
For Approval and Signature:
HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA HONOURABLE MR.JUSTICE J.B.PARDIWALA
========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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NATURAL PETROCHEMICALS PVT LTD & 1 - Petitioner(s)
Versus
STATE OF GUJARAT & 4 - Respondent(s)
========================================================= Appearance :
MR TANVISH BHATT FOR M/S WADIA GHANDY &CO for Petitioner(s) : 1 - 2.
NOTICE NOT RECD BACK for Respondent(s) : 1, NOTICE SERVED for Respondent(s) : 1,3 - 5.
MS MAITHILI MEHTA, ASST.GOVERNMENT PLEADER for Respondent(s) : 2, =========================================================
CORAM :
HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA
and
HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 21/02/2012 CAV JUDGMENT
(Per : HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA)
1. By this writ-application under Articles 226/227 of the Constitution of India, the writ-petitioners have prayed for quashing of the final eligibility certificate dated July 18, 2006 issued by the respondent no.1 and for a direction upon the respondent no. 2 to issue fresh eligibility certificate for an amount of Rs. 1006.32 Lac.
2. The following facts are not in dispute:
[a] The petitioner no. 1 is a company duly incorporated under the provisions of the Companies Act, 1956, having its registered office at S. No. 443, Village:Bhimasar, Taluka : Anjar Road, District-Kutch, and the petitioner no. 2 is a shareholder of the petitioner no. 1 company and is concerned with day-to-day affairs of the petitioner no. 1 company.
[b] There was a devastating earthquake on January 26, 2001, which, among other districts, hit Kutch district of the State of Gujarat and because of the said natural calamity, the economic activities in Kutch district came to a standstill.
[c] On November 9, 2001, by a Resolution No. 10200-9031, the respondent no.1 promulgated a scheme for the economic development of Kutch district [“Scheme”] for any existing industrial undertaking or a new industry setting up a unit in Kutch district. By virtue of the scheme, the above types of the units became eligible for the benefit of sales tax exemption or sales tax deferment on eligible fixed capital investment under the provisions of Section 49[2] of the Gujarat Sales Tax Act, 1969.
[d] On September 13, 2004, the respondent no.1 extended applicability of the Scheme from October 31, 2001 to December 31, 2004 and thereafter, by further order dated January 7, 2005, it was extended to December 31, 2005.
[e] On July 18, 2005, on the basis of an application filed by the petitioner no.1 for availing the benefit, the registration was duly granted to it under the Scheme and on December 29, 2005, the petitioner no.1 commenced commercial production which was duly intimated to the respondent authorities.
[f] On April 28, 2006, the petitioner no.1 filed an application for availing of the ad-hoc sales tax incentives under the Scheme, which was required to be filed within 120 days from the commencement of commercial production by the petitioner no. 1.
[g] As the investment of the petitioner no. 1 in plant and machinery had exceeded Rs. 1.00 Crore, the petitioner no.1, on June 26, 2006, filed an application before the respondent no. 2 for registration of the petitioner no. 1 as a Medium Scale Industry.
[h] On September 26, 2006, an ad-hoc eligibility certificate under the Scheme was issued to the petitioner no.1 for an amount of Rs. 337.66 Lac. Though the certificate identified the eligible investment in the fixed assets to be Rs. 1420.73 Lac and 25% of Rs. 1420.73 Lac amounted to Rs. 355.1825 Lac, the provisional certificate was issued to the petitioner no. 1 for a reduced amount of Rs. 337.66 Lac.
[i] On July 18, 2009, while the final eligibility certificate identified an eligible investment in the fixed assets amounting to Rs. 1006.32 lac under the Scheme, the tax benefit to the petitioner no. 1 was granted only for an amount of Rs. 956.69 Lac. The reason for such reduced benefit was explained by alleging delay of seven days on the part of the petitioner no. 1 in submitting the application dated April 28, 2006 for seeking ad-hoc eligibility certificate. The respondent authorities informed the petitioner no.1 that the application for seeking ad-hoc eligibility certificate filed by it on April 28, 2006 was received on May 4, 2006 and therefore, there was delay in filing the said application beyond the period of 120 days from the date of commencement of commercial production, i.e., December 29, 2005.
[j] On receipt of such intimation, the petitioner no.1 on December 18, 2009 addressed a letter to the respondent no.2 thereby informing that the application for availing ad- hoc sales tax incentive was filed within 120 days from the date of commencement of commercial production. However, the said letter had been erroneously stamped with the inward date of May 4, 2006 by the regional office, Bhuj.
[k] On January 16, 2010, the respondent no.3 addressed a letter to the respondent no.2, thereby issuing a clarification on the submission date of the ad-hoc eligibility certificate by the petitioner no.1. The said letter specifically stated that the application seeking ad-hoc eligibility certificate was tendered by the representative of the petitioner no.1 in person on April 28, 2006 and that the said letter was duly stamped and received.
[l] On October 20, 2011, a further representation was made before the Deputy Industries Commissioner [Incentive], apprising him of the above fact and requesting him to issue a fresh eligibility certificate, as according to the petitioners, there was no delay on their part in tendering the application for seeking ad-hoc eligibility certificate.
[m] The respondents having failed to consider the said request, the present writ-application has been filed.
3. The writ-application was opposed by the respondent no.2 by filing an affidavit thereby virtually admitting the statements made in the writ-application. However, it was contended that the application dated April 28, 2006 was delayed by one day and was not filed within 120 days from December 29, 2005, the admitted date of commencement of commercial production of the petitioner no. 1. The reason assigned by the respondent no. 2 explaining the alleged delay has been mentioned in the affidavit-in-reply in the following way:
According to the respondent no.2, 27th April, 2006 should be considered to be the 120th day from the date of commencement of the commercial production of the project as per para 7.C of the Resolution and the petitioner having failed to file such application within that day, a pro-rata deduction of the period of delay has been made. It was further contended that while granting ad-hoc eligibility certificate, the date of inward register, which was 4th March, 2006, was considered as the date of receipt of the application and accordingly, the competent authority deducted the eligibility period and amount available to the petitioners.
4. Therefore, the only question that arises for determination in this writ-application is whether the petitioner no.1 filed the application within 120 days from the date of commencement of commercial production, which is admittedly 29th December, 2005.
5. After hearing the learned counsel for the parties and after going through the aforesaid materials on record, we find that there is no dispute as regards entitlement of the writ- petitioner no. 1 of the aforesaid benefit. The only dispute raised is whether 28th April, 2006 falls within 120 days from December 29, 2005, the admitted date of commencement of commercial production for the purpose of the Scheme.
6. As laid down by the Supreme Court in the case of M/s. Saketh India Ltd. and others v. M/s. India Securities Ltd. reported in AIR 1999 SC 1090, ordinarily in computing the time, the rule observed is to exclude the first day and to include the last. In that case, the Supreme Court was considering the period of limitation for initiating action under the Negotiable Instrument Act and particularly, the conjoint effect of Sections 138 and 142 thereof. In that context, it made the following observations:
“The question would be whether for calculating the period of one month which is prescribed under Section 142(b) the period has to be reckoned by excluding the date on which the cause of action arose?
6. Similar contention was considered by this Court in the case of Haru Das Gupta v. State of West Bengal (1972) 1 SCC 639 : (AIR 1972 SC 1293), wherein it was held that the rule is well established that where a particular time is given from a certain date within which an act is to be done, the day on that day is to be excluded; the effect of defining period from such a day until such a day within which an act is to be done is to exclude the first day and to include the last day. In the context of that case, the Court held that in computing the period of three months from the date of detention, which was February 5th, 1971, before the expiration of which the order or decision for confirming the detention order and continuing the detention thereunder had to be made, the date of the commencement of detention, namely, February 5th has to be excluded; so done, the order of confirmation dated May 5th, 1971 was made before the expiration of the period of three months from the date of detention. The Court held that there is no reason why the aforesaid rule of construction followed consistently and for so long should not be applied. For the aforesaid principle Court referred to the principle followed in English Courts. The relevant discussion is hereunder (at Pp. 1294 and 1295 of AIR):-
"These decisions show that Courts have drawn a distinction between a term created within which an act may be done and a time limited for the doing of an act. The rule is well established that where a particular time is given from a certain date within which an act is to be done, the day on that date is to be excluded. (See Goldsmith Company v. West Metropolitan Railway Company (1904) 1 KB 1 at 5) This rule was followed in Cart-wrright v. Maccormack (1963) 1 All ER 11 at 13, where the expression "fifteen days from the commencement of the policy" in a cover note issued by an insurance company was construed as excluding the first date and the cover note to commence at midnight of that day, and also in Marren v. Dawson Bentley and Co. Ltd., (1961) 2 QB 135, a case for compensation for injuries received in the course of employment, where for purposes of computing the period of limitation the date of the accident, being the date of the cause of action, was excluded. (See also Stewart v. Chapman (1951) 2 KB 792 and In re, North, Ex parte Wasluck (1895) 2 QB 264). Thus, as a general rule the effect of defining a period from such a day until such a day within which an act is to be done is to exclude the first day and to include the last day. (See Halsbury's Laws of England, (3rd ed.), Vol. 37, Pp. 92 and 95.) There is no reason why the aforesaid rule of construction followed consistently and for so long should not also be applied here."
7. The aforesaid principle of excluding the day from which the period is to be reckoned is incorporated in Section 12(1) and (2) of the Limitation Act, 1963. Section 12(1) specifically provides that in computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded. Similar provisions is made in sub-section (2) for appeal, revision or review. The same principle is also incorporated in Section 9 of General Clauses Act, 1897 which, inter-
alia, provides that in any Central Act made after the commencement of the General Clauses Act, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time, to use the word 'from', and, for the purpose of including the last in a series of days or any other period of time, to use the word 'to'.
8. Hence, there is no reason for not adopting the rule enunciated in the aforesaid case which is consistently followed and which is adopted in the General Clauses Act and the Limitation Act. Ordinarily in computing the time, the rule observed is to exclude the first day and to include the last. Applying the said rule, the period of one month for filing the complaint will be reckoned from the day immediately following the day on which the period of 15 days from the date of the receipt of the notice by the drawer, expires. Period of 15 days, in the present case, expired on 14th October, 1995. So cause of action for filing complaint would arise from 15th October, 1995. That day (15th October) is to be excluded for counting the period of one month. Complaint is filed on 15th November, 1995. The result would be that the complaint filed on 15th November is within time.”
(Emphasis supplied by us).
7. Therefore, under the Scheme, when an applicant is required to file an application within 120 days “from” the commencement of production, that date of commencement of production is to be excluded. If we apply the aforesaid principle, the application filed admittedly on April 28, 2006 was filed very much within 120 days from December 29, 2005 as indicated above. The respondent no. 2 erred in law in including the date of commencement of commercial manufacture while calculating the 120 days as it appears from the chart reflected in the affidavit in reply. The formal recording of May 4, 2006 due to internal transaction/movement of the file in the office of the respondent no.2 cannot affect the right of the petitioner who had no control over such delay due to internal management of the Respondent no. 2.
8. We, therefore, find that in this case, the writ-petitioner complied with the requirement of the Scheme and thus, there was no justification of deducting the amount of eligibility on the ground of delay from 28th April, 2006 till 4th May, 2006 by deducting the proportionate amount of Rs.
49.63 Lac.
9. We, consequently, hold that in the facts of the present case, even in accordance with the Scheme provided by the respondent no.1, the petitioner no. 1 is entitled to an amount of Rs. 1006.32 Lac.
10. We accordingly allow the Special Civil Application and set aside the eligibility certificate annexed as Annexure: F to the writ-application as the same is patently illegal and direct the respondent no.2 to issue fresh eligibility certificate for an amount of Rs. 1006.32 lac within 15 days from the date of this order.
11. The writ-application is thus allowed. In the facts and circumstances of the case, however, there will be no order as to costs.
[BHASKAR BHATTACHARYA, ACTING CJ.] [J.B. PARDIWALA, J.] pirzada/-