STATE OF BIHAR AND ORS. versus STEEL CITY BEVERAGES LTD. AND ANR.

Citation: [1998] SUPP. 3 S.C.R. 5 · Decided: 18-11-1998 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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STA TE OF BIHAR AND ORS. 
v. 
STEEL CITY BEVERAGES LTD. AND ANR. 
NOVEMBER 18, 1998 
[S.P. BHARUCHA, G.T. NANA VAT! AND B.N. KIRPAL, JJ.] 
Bihar Sales Tax Supplementary (Deferment of Tax) Rules, 1990: Rules 
2(v)-3-Proviso. 
A 
B 
Sales Tax-Deferred payment of-Incentives to new industrial units C 
and units under expansion-Company-Business of manufacturing soft drink 
beverages-Deferment claim in respect of investment in bottles and crates-
Held not permissible-Held plant includes apparatus used for manufacturing 
soft drinks or beverages-But does not include crates and bottles used for 
storing the manufactured product. 
D 
Industries (Development & .Regulation) Act, 1951 
Section I 1-B-
Notifications issued under-Applicability of 
Interpretation of Statute-Word-Giving different meaning to-Held 
permissible when defined differently under different provision or if the context E 
so requires. 
Words and Phrases : 
"Plant "-Meaning of~In the context of Bihar Sales Tax Supplementary 
(Deferment of Tax) Rules, 1990, Rule 2(v). 
Respondent-company, engaged in the business of manufacturing soft 
drinks and beverages, claimed benefit of deferment of payment of sales tax 
under the Bihar Sales Tax Supplementary (Deferment of Tax) Rules, 1990. 
The competent authority viz. the District Level Committee held that the 
company was entitled to the benefit of deferment of payment of sales tax to 
F 
the extent of 90 per cent of its fixed capital investment in fixed capital assets. G 
However, the company's claim for benefit of deferment rules in respect of 
investment in bottles and crates was rejected. On appeal, the High Court held 
that bottles and crates employed by the company for its business were also 
"plant" within the meaning of Rule 2(v) of the Deferment Rules and, therefore, 
the respondent-company was entitled to get the benefit of deferment on the H 
5 
6 
SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R. 
A investment made in them. 
B 
In State's appeal to this Court on the question whether under the 
'Deferment Rules' "plant" would include bottles and crates employed by an 
industrial unit manufacturing soft drinks and beverages for carrying on its 
business. 
Allowing the appeal, this Court 
HELD: 1. High Court was wrong in interpreting the word 'plant' in 
Rule 2{v) of the Bihar Sales Tax Supplementary (Deferment of Tax) Rules, 
1990 widely. It failed to consider whether the object and scheme of Deferment 
C Rules permits such a wide interpretation. The Deferment Rules do not define 
plant and, therefore what should have been considered by the High Court was 
what meaning should be given to it in the context of the Deferment Rules. 
(9-G-H; IO-BJ 
2. As. disclosed by the industrial policy and the Deferment Rules, the 
D State agrees to suffer temporary loss of revenue by not requiring immediate 
payment of sales-tax on sale of goods produced or manufactured by an 
industrial unit if it makes new fixed capital investment in the State. What 
the State desires and what the Deferment Rules require for getting the 
benefit tht:reunder, is not capital investment but fixed capital investment. 
E Rule 2(v) defines fixed capital investment to mean investment in land, building, . 
plant and machinery. Thus, the nature of investment contemplated by the 
Deferment Rules is investment in fixed assets which are ordinarily considered 
essential for production or manufacture of goods and have some degree of 
permanency. The second proviso to Rule 3 makes this position further clear. 
Therefore, the context in which the word 'plant' is used in Rule 2(v) indicates 
F that it is not used in its wider sense and does not include within its meaning 
land, building and machinery. The rule-making authority did not intend 
'plant' to mean what is not a fixed asset. By 'plant' what is intended by the 
rule-making authority is that apparatus which is used by the industry for 
carrying on its industrial process of manufacture, in respect of an industry 
G manufacturing soft drinks, it can be said that plant would mean .that apparatus 
which is used for manufacturing soft drinks or beverages and not articles 
like crates and bottles used for storing the manufactured product. 
[10-G-H; 11-A-B-C-D-E) · 
3. Two notifications of the Government oflndia dated 2.4.1991 and 
H 1.1.1993 issued under Section 11-B of the Industries (Development & 
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STATEv. STEEL CITY BEVERAGES LTD. [NANAVATI,J.] 
7 
Regulation) Act, 1951 are also relevant to decide the 

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