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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2924 OF 2009 (Arising out of SLP(C) No.1447 of 2008)

COMMISSIONER OF COMMERCIAL TAXES & ORS. ...APPELLANT (S)

VERSUS

SUPREME OIL INDUSTRIES LTD. & ANR. ...RESPONDENT(S)

O R D E R

Leave granted.

In 1994, Government of West Bengal introduced an incentive scheme known as  

West  Bengal  Industrial  Promotion  (Assistance  to  Industrial  Units)  Scheme,  1994,  

(hereinafter  referred  to  as  the  said  `Scheme').   The  Scheme  provided  for  financial  

assistance  to  Industrial  Units  manufacturing  goods  enumerated in  `Schedule  A'  to  the  

Scheme.  That Schedule contains “ Edible Rice Bran Oil” as one of the Items which made  

the claim for assistance admissible under the Scheme.  Respondent No. 1 is a registered  

dealer under West Bengal Sales Tax Act, 1994.

Respondent No. 1 made an application in Form-I claiming assistance under the  

said Scheme in respect of periods mentioned in Synopsis-B.  Respondent No. 1 claimed that  

“Rice Bran Oil Raw Grade-I” manufactured by it formed part of “Edible Rice Bran Oil”  

and as such it was entitled to ninety per cent refund in respect of tax collected on sale in  

terms of the said Scheme.  The dispute ultimately came before the High Court by way of  

Writ Petition as the Special Secretary, Finance Department, Government of West Bengal,  

rejected all the applications made by respondent No. 1 herein holding that “Rice Bran Oil

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Grade-I, manufactured by respondent No. 1 herein was not “Edible Rice Bran Oil” as the  

manufactured  product  required  further  processing  before  it  became  fit  for  human  

consumption.  The learned Single Judge set aside the order of the Special Secretary and  

directed the matter to be heard de novo in accordance with law.  The view earlier taken by  

the Special Secretary came to be re-iterated vide Order dated 16th September, 2002 which  

made respondent No. 1 herein to move the High Court in Writ Petition No. 2170 of 2002,  

which came to be dismissed.  The dismissal of the writ petition was reversed by the Division  

Bench of the High Court vide the impugned judgment, hence this Civil Appeal is filed by  

the Department.

Apart from the reasons given by the Division Bench, we find that the Scheme  

1994 came to be enacted in view of the fact that 16 Units manufacturing Rice Brand Oil of  

Raw Grade-I in  the State of  West Bengal  were facing acute financial  problems and in  

order to alleviate those financial problems the State decided to give financial assistance for  

the very existence of the Units set up prior to 1994.  In this connection we may point out  

that  in  this  case  we are  concerned  with  three  categories  of  Rice  Bran  Oil.   The  first  

category is Rice Bran Oil of Raw Grade-I which goes into the manufacture of vanaspati.  

The second category is Rice Bran Oil of Raw Grade-II not fit for human consumption.  It  

goes in industrial uses.  The third category is Rice Bran Oil Refined Grade which is fit for  

direct human consumption, as such.  On enquiries we were informed that there is no Unit  

in the State of West Bengal which was in the manufacture of Rice Bran Oil of Refined  

Grade in 1994 when the Scheme stood enacted.  Since, we are concerned with the incentive  

Scheme, we have to give weightage to the object behind enactment of 1994 Scheme.  The  

object appears to be to give incentive to those Units set up prior of 1994 which were in the  

manufacture  of  Rice  Brand  Oil  of  Raw  Grade-I  alone.   We have  been  taken through  

number of enactments, namely, Food Adulteration Act, Essential Commodities Act and the

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material indicating how the trade perceives Rice Brand Oil of Raw Grade-I and we find  

that the said product is perceived by the trade as Edible Oil.

For the afore-stated reasons, we find no error in the impugned judgment of the  

Division Bench of the Calcutta High Court.  However, before concluding, we would like to  

point out one important aspect.  Out of 16 Units, Supreme Oil Industries Limited is the  

only Unit which entered into litigation in 2002 under the Financial Assistance Scheme.  We  

are informed that there is one more Unit which had instituted proceedings in the High  

Court vide Writ Petition No. 672 of 2005.  We are specifically  making it  clear that the  

benefit of refund would be admissible to Supreme Oil Industries Limited in the sum of  

Rs.73,00,000/-  (Rupees  seventy  three  lacs)  which  the  State/Competent  Authority  shall  

refund within a period of six months.  It is made clear that if the amount is not refunded  

within stipulated time, then interest will become payable by the State at 9 per cent per  

annum on expiry of the period of six months.

As regards the  the pending Writ Petition No. 672 of 2005, we leave it to the High  

Court to consider moulding of the relief after examining the delay, if any, on the part of the  

assessee in moving the High Court.  We express no opinion in that regard.  However, we  

make it clear that none of the other Units will be entitled to claim refund/adjustment on the  

basis of our order passed today, as they have not asserted their right to refund in the Court  

of Law all these years.

The civil appeal is disposed of accordingly with no order as to costs.  

....................J. [ S.H. KAPADIA ]

New Delhi, ....................J

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April 29, 2009 [ AFTAB ALAM ]  

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ITEM NO.1                  COURT NO.4                   SECTION III

           S U P R E M E   C O U R T   O F   I N D I A                          RECORD OF PROCEEDINGS                      Petition(s) for Special Leave to Appeal (Civil) No(s).1447/2008

(From the judgment and order dated 04/04/2007 in APO No. 439/2004   of The HIGH COURT OF CALCUTTA)

COMMISSIONER OF COMMERCIAL TAXES & ORS.              Petitioner(s)

                     VERSUS

SUPREME OIL INDUSTRIES LTD. & ANR.                   Respondent(s)

(With prayer for interim relief)(For orders )

Date: 29/04/2009  This Petition was called on for hearing today.

CORAM :         HON'BLE MR. JUSTICE S.H. KAPADIA         HON'BLE MR. JUSTICE AFTAB ALAM

For Petitioner(s)    Mr. Rakesh Dwivedi, Sr.Adv.                      Mr. Avijit Bhattacharjee,Adv.

     Mr. Bikas Kar Gupta, Adv.                      Mr. Shantanu Krishna, Adv.                       For Respondent(s)    Mr. S.K. Bagaria, Sr.Adv.                      Mr. Rana Mukherjee, Adv.                      Mr. Siddharth Gautam, Adv.

     Mr. Goodwill Indeevar,Adv.

      UPON hearing counsel the Court made the following                           O R D E R  

Leave granted.

The appeal is disposed of with no order as to costs.

         (S. Thapar)         PS to Registrar

(Madhu Saxena) Court Master

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The signed order is placed on the file.