STATE OF MADHYA PRADESH AND ANR. versus G.S. DALL AND FLOUR MILLS

Citation: [1990] SUPP. 1 S.C.R. 590 · Decided: 19-09-1990 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

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Judgment (excerpt)

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A 
STATE OF MADHYA PRADESH AND ANR. 
V. 
G.S. DALL AND FLOUR MIJ.,LS 
SEPTEMBER 19, 1990 
B 
[SABYASACHI MUKHARJI, CJ., S. RANGANATHAN AND 
K.N. SAIKIA, JJ.] 
M.P. Sales Tax Act, 1958/M.P. (Deferment of payment of Tax) 
Rules, 1983. Section 12/Rule 13-Sales Tax-Eligibility for exemption 
-Effect of Notification dated July J, 1987. 
· 
.,... 
c 
In exercise of the powers conferred by section 12 of the Madhya 
Pradesh General Sales Tax Act, 1958 the State Government issued a 
notification dated 23.10.1981 exempting the specified class of dealers 
who had set up industry in any of the specified districts of Madhya 
Pradesh and had commenced production after !st April, 1981 from 
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payment of tax under the said Act for a specified period subject to 
certain restrictions and conditions. However, when the assessees 
approached the Director of Industries for the certificate of exemption, it 
was denied to them on the ground that the industries run by them were 
.... 
"traditional industries" which were not eligible for exemption. 
E 
The assessees went to the court and urged that the concept of -
"traditional industries" was one unspecified in the notification; and 
that the authorities had 110 jurisdiction to travel outside the terms of the 
notification and import extraneous considerations to deny the assessees 
an exemption they were entitled to under the notification. 
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The State on the other hand, relied on the provisions of the M.P. 
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(Deferment ~f payment of Tax) Rules, 1983, notified on 1.9.83 (in 
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particular, rule 13 thereof) and on certain instructions that had been 
issued by the Government on 12.1.1983 pertaining to the "grant of 
certificate of eligibility to new industrial units claiming exemption from 
or deferment of payment of sales tax". 
G 
The assessee's claim for exemption from sales tax was accepted by 
the Division Bench of the High Court in the case of G.S. Dhall & Flour 
Mills and, following it, in the case of Mohd. Ismail. The Division Bench 
took the view that these rules and instructions had no relevance to the 
claim for exemption put forward under the notification of 23.10.1981 
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and that, in any event, the executive instructions could not override the 
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provisions of the statutory notification. 
590 
stATE OF M:P .•. o.s. oALL 
591 
Subseqil~ni th tile decision of the Division Bench, the Staie 
Goverrtriierit issiieci a riotificaiioii oit 3. 7 .1987, intended obviously to 
overcome the effect of the said decision. 
StibseqiJeriily, however, a Full Bench of the High Court, in the 
case ot Jagadamba industries disapproved the view taken by the Divi-
A 
sioh Bench in G.S. bhait case. Tlie Full Bench attached iinpottance to 
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the ruies and iiisi~tictibi\s referreil to aiiove and relied considerably on 
his history of the saies-iax ievy ih the Staie as turilishlng ptopet and 
necessary background iii Wllich ilie ierins of the notification ot 
. .., 
23. Hl.i98i had io be read arid iiiierprelM: 
The Full Bench, atier codsideririg the scheme and irlsfructions of 
the (;ovenirilerii, cariie to the conciusioriihat the scope of the exempiioli 
notification of 1981 was noi intended tO be wider than that of the con-
cessions granted earlier, arid that the 198i notification was intended to 
brirtg about oilly a change iii the mode of relief to the same categories ot 
industries as Wete covered iiy the earlier schemes. 
The contention that "lns!tuctlons'; could noi override llie effect 
of the statutory notiflcaticln was repelled by the Fuil Bench on the 
ground that the validity and effectivehess of the ihStructiolis could be 
supported by retetellce to Article 162 of the Constitution as filling up a 
Jack of guidelines in the notitlcaticlh. 
The Full Bench considered the 1983 instructions to be conclusive 
on two grounds on the doctrine of contempotanea expositio and on the 
principle that executive instructions could always be issued to supple· 
ment statutory instrumf!llts so as to fill up areas on which the latter 
were silent. 
The State, aggrieved by the judgment of the Division Bench in the 
two cases, and the assessee by the judgment of the Full Bench in the 
other case, have filed the appeals and Special Leave Petitions. 
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E 
F 
Before this Court the parties reiterated their submissions in sup-
port of either of the two judgnients. The main submission on behalf of G 
the State was that, since the 1981 notification did not set out the CQndi-
tions on which, and the pr

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