civil appellate jurisdiction civil appeal number 2211  nt
of 1988 etc. etc. from the judgment and order dated 7.10.1986 of the
madhya pradesh high companyrt in m.p. number 1861 of 1983.
prithvi raj r.b. mishra uma nath singh s.k. gambhir
vivek gambhir satish k. agnihotri ashok singh and mrs.

d. khanna for the appellants. harish n. salve ms. lira goswami and d.n. misra for the
respondent. the judgment of the companyrt was delivered by
ranganathan j. the civil appeal and s.l.p. 12054/87 are
by the state of madhya pradesh  m.p. . the respondents in
these two matters and the petitioners in the other five
special leave petitions are certain companycerns in m.p. assess-
able to sales tax  hereinafter companypendiously referred to as
the assesses . all these matters can be companyveniently dis-
posed of by a companymon judgment as they raise a companymon issue. the assesses claim for exemption from sales tax for
certain periods in question was accepted by the high companyrt
in the case of g.s. dhall flour mills and following it
in the case of mohd. ismail  a case where the exemption
sought for was originally granted but subsequently revoked . however subsequently a full bench of the high companyrt in
the case of jagadamba industries disapproved the view taken
by the division bench in the g.s. dhall flour mills case
and following the full bench the writ petitions filed by
certain other assesses were dismissed by the high companyrt. the
state is aggrieved by the judgment in the first two cases
and the assesses by the high companyrts decision in the other
cases. hence these appeals and special leave petitions. before dealing with the appeals on merits an important
circumstance needs to be referred to which is this the
judgment of the full bench in the case of jagadamba indus-
tries was itself the subject matter of special leave peti-
tions in this companyrt but those petitions  s.l.p. number. 15688-
90/87  were dismissed at the stage of admission on 9.2. 1988 with the observations we are in agreement with the
views expressed by the high companyrt. the special leave peti-
tions are dismissed. in view of this the state submits
that c.a. 22 11/87 should be allowed and that the assesses

l.ps. should be dismissed in limine. on the other hand
counsel for the assesses seek to distinguish the jagadamba
case by companytending that this companyrt had refused leave against
the full bench judgment on account of certain special facts
which were companysidered sufficient to disentwine the assesses
in those
cases from claiming the exemption. they companytend that in
view of this and the fact that the g.s. dhall flour mills
case is in appeal before we may grant leave in the s.l.ps. and dispose of all the appeals on merits. we accept this
plea and grant leave in the s.l.ps. companydoning a delay in the
filing of s.l.p. 12054/87. we shall however touch upon the
above aspect of the matter in the companyrse of our judgment. the issue raised is at first blush a simple one. s. 12
of the m.p. sales tax act  hereinafter referred to as the
act  enables the state government to grant exemption from
the levy of sales tax in certain circumstances. it says

saving  1  the state government may by
numberification and subject to such restrictions and companydi-
tions as may be specified therein exempt whether prospec-
tively or retrospectively in whole or in part--

any class of dealers or any goods or class of goods from
the payment of tax under this act for such period as may be
specified in the numberification

any dealer or class of dealers from any provision of
the act for such period as may be specified in the numberifica-
tion. any numberification issued under this section may be re-
scinded before the expiry of the period for which it was to
have remained in force and on such rescission such numberifica-
tion shall cease to be in force. a numberification rescinding
an earlier numberification shall have prospective effect. in exercise of this power the state government issued the
following numberification on 23/26.10.1981 which it is neces-
sary to extract in full here along with its annexure. it
reads
in exercise of the powers companyferred by section 12 of
the madhya pradesh general sales tax act 1958  number 2 of
1959  the state government hereby exempts the class of
dealers specified in companyumn  1  of the schedule below who
have set up industry in any of the districts of madhya
pradesh specified in the annexure to this numberification and
have companymenced production after 1st april 1981 from pay-
ment of tax under the said act for the period specified in
column  2  subject to the restrictions and companyditions
specified in companyumn  3  of the said schedule
------------------------------------------------------------
class of dealers period restrictions and companyditions
subject to which exemption
has been granted
1 2 3
------------------------------------------------------------
1. dealers who-- two years the dealer specified in
 a  hold a certifi- from the companyumn  1  shall companytinue
cate of regis- date of to furnish the pres-
tration under the companymence- cribed returns under the

p. general sales ment of m.p. general sales tax
tax act 1958 production act 1958 and shall pro-
duce before the assessing
 b  are registered authority at the time of
small scale indus- his assessment a certifi-
trial units with cate issued by the direc-
the industries dep- tor of industries madhya
artment of govt. of pradesh or any officer au-

p. and thorised by him for the
purpose certifying that
 c  have set up ind- such dealer is eligible to
ustry in any of the claim the exemption and
districts specified that he has number opted for
in part i of the the scheme of deferring
annexure the payment of tax under
the rules framed for this
purposes. dealer who-- --do--
 a  hold certifi-  a  3 years
cate of registra- in case of an
tion under the industry loca-

p. general sales ted in a district
tax act 1958 specified in a
 number2 of 1959  of part ii of the
annexure.  b  are registered  b  4 years in the
as small scale ind- case of an industry
ustrial units with located in category
the industries de- b of part ii of
partment of govt. of of the annexure

p. or are regis- and
tered with the di-
rector general of
technical develop-
ment as an indus-
trial unit or are
registered
as industrial units
by any authority duly
empowered to do so by
the state govt. or cen-
tral govt. or hold a
licence under the in-
dustries  development
regulation  act 1951
 number65 of 1951  and
 c  have set up indus-  c  5 years in --do--
try in any of the dis- the case of an
tricts specified in industry located
part ii of the anne- in a district spe-
xure. cified in category
c of part ii of
the annexure from
the date of companymen-
cement of production. dealers who---
 a  hold certificate  a  3 years in the dealer speci-
of registration under the case of an fied in companyumn  1
the m.p.general sales industry loca- shall produce be-
tax 1958  number2 of ted in any of fore the assessing
1959  the tehsils of authority at the
a district spe- time of his assess-
fied in part i ment a certificate
of the annexure issued by the direc-
tor of industries
madhya pradesh or any
 b  are registered  b  5 years in officer authorised by
as industrial units the case of an him for the purpose
with the director industry located of certifying that
general of technical in any of the the dealer is eligi-
development or by any tehsils of a ble to claim such
authority duly em- a district spe- exemption under the
powered to do so by cified in cate- scheme of the indus-
state or central gory a of part tries. department
government or hold ii of the anne- being a first dealer
licence under the xure to have companymenced
industries  develop production in the
ment and regula- industry set up by
him in the tehsils
referred to in company-
umn  2  and that
such dealer has number
opted for the scheme
of deferring the pay-
ment of tax under the
rules framed for this
purpose. tion  act 1951
 number65 of 1951  have
fixed a capital in-
vestment between
rs.1 crore and rs.10
crores and
 c  are the first to  c  7 years in
set up the industry the case of an
in any tehsil of the industry loca-
district of madhya ted in any of
pradesh specified in the tehsils of
the annexure. a district spe-
cified in cate-
gory b of part
ii of the anne-
xure
 d  3 years in the
case of an industry
located in any of
the tehsils to a
district specified
in category c of
part ii of the annexure
from the date of
commencement of
production. annexure
part i

indore 2. ujjain 3. bhopal 4. jabalpur 5. gwalior 6. durg
part ii
category a

bilaspur 2. raipur 3. dewas

handsaur 5. morena 6. vidisha

hoshangabad 8. ratlam 9. khandwa

satna 11. shahdol
category b

geoni 2. balaghat 3. betul

raigharh 5. guna 6. chindwara

damoh 8. sagar 9. narsimhpur

senumber 11. rajmandgoo
category c

panna 2. sidhi 3. rewa

chhatarpur 5. tikamgarh 6. khargone

surguja 8.mandla 9. bhind

shivpuri 11. datia 12. raisen

shajapur 14. dhar 15. rajgarh

jhooua 17. bastar
it is number in dispute that the assessees before us fulfil
the qualifications mentioned in the numberification. however
when they approached the director of industries for the
certificate of exemption envisaged under companyumn  3  of the
numberification it was denied to them on the ground that the
industries run by them are traditional industries which
were number eligible for exemption. the assessees went to companyrt
contending that this was totally unjustified. they said the
concept of traditional industries was one unspecified in
the numberification. the authorities had numberjurisdiction to
travel outside the terms of the numberification and import
extraneous companysiderations to deny the assessees an exemption
they were entitled to under the numberification. it is this
contention that was accepted in the g.s. dhall and flour
mills case. the state had relied on the provisions of the

p.  deferment of payment of tax  rules 1983 numberified on
1.9.83  in 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 eligi-
bility to new industrial units claiming exemption
from deferment of payment of sales tax. the high companyrt took
the view that these rules and instructions had numberrelevance
to the claim for exemption put forward under the numberifica-
tion of 23.10.1981 and that in any event the executive
instructions companyld number override the provisions of the statu-
tory numberification. this judgment was delivered on 7.10.1986
by sohani c.j. and faizanuddin j.
the full bench in its judgment of 2.11.1987 took a
different view. it has in effect attached importance to
the rules and instructions referred to above and relied
considerably on the history of the
sales-tax levy in the state as furnishing a proper and
necessary background in which the terms of the numberification
of 23.10.1981 have to be read and interpreted. this history
has therefore to be set out number in order to appreciate the
validity of the companyclusions of the full bench. before doing
this it may be mentioned that the full bench companyprised of
ojha c.j. faizanuddin j. and adhikari j. in fact the
judgment was written by faizanuddin j. who has explained in
detail the reasons for his change in view. it may also be
mentioned as a matter of record that subsequent to the
decision of the division bench in g.s. dhall and flour
mills the state government appears to have issued a numberifi-
cation on 3.7. 1987 intended obviously to overcome the
effect of the said decision. we shall refer to this later in
this judgment. number to turn to the history relied on by the full bench
we start with a scheme for the grant of subsidy interest
free loan to new industries set up in madhya pradesh. the
scheme was to be effective from 15.9.69 and till the end of
the fourth five year plan period  1970  or such further
period as may be extended by the state government from time
to time. it would appear that the scheme was being adminis-
tered informally under executive instructions even beyond
1970. though certain rules appear to have been framed for
the first time on 30.8.73 these rules it would seem were
number statutory but were only in the nature of executive
instructions. we shall however refer to them as rules. rule 3 was clear as to the persons eligible to avail of it. it read
rule 3--it shall be applicable to all new industrial units
except traditional industries like oil mill flour mill
dall mill rice mill ginning and printing factories who
set up in madhya pradesh provided further that such appli-
cants register themselves with the department after 15.9.69
but before 31.3.74 and in case of ssi units go into produc-
tion within a period of one year and in case of large and
medium industries go into production within 3 years of their
date of registration provided further that in case of delay
in going into production the period of availability of
subsidy or companycession will be reduced by the period of delay
in going into production. this will companye into force from
1.4.74.
numbere--small scale industries who are already registered
with the department need number register separately for this
concession. it would also appear that the districts of the state were
divided into two categories--advanced and backward--and the
latter into three categories a b c. the amount and
period of the subsidy loan depended upon this classification
and was elaborately set out in para 8 which need number be
extracted here. a numbere added to para 8 had this to say
numbere-- 1  unit who is otherwise entitled to subsidy may on
his request be companysidered for grant of interest free loan to
the extent of entitlement of the subsidy. numberunit available companycession under the scheme will be
allowed to change the location of the whole or any part of
the industrial unit or effect any substantial part of its
total fixed capital investment within a period of five year
after its going in to production. in case the ownership of a new unit changed during the
period of availability of this companycession the new owner
would be entitled to this companycession for the balance period. a closed unit which is re-started by an entrepre-
neur will number be companysidered to be a new unit for the purpose
of this companycession. anumberher set of rules came into force with effect from
1.4.1977 and superseded the earlier rules. these were on
more or less the same lines as the earlier ones and were to
apply to new industrial units and existing industrial
units as defined in rules 2 a  and  b  on fulfillment of
certain terms and companyditions but industries enumerated in
rule 3 were specifically excluded from the purview of the
definition. rule 3 made it clear that the rules shall number be
applicable to the following traditional industries. the
list of such industries in addition to those mentioned in
the earlier set of rules  excluding roller flour mills and
solvent extraction plants in oil mills  took in also saw
mills ice factories and such other industries as may be
numberified by the government from time to time. the period
and extent of the subsidy loan here again depended upon the
district--advanced or backward and in the latter category
a or b or c--in which the industry was set up rule 7
is of some relevance and may be set out

an industrial unit eligible for this companycession will
apply
to the asst. director of industries of the district company-
cerned for verification of the date of going into companymercial
production and other particulars of new industrial unit or
substantial expansion in respect of which the companycession is
sought. the asst. director of industries will make verifica-
tion in accordance with rules 5 1  and send within 15 days
of the receipt of the application his report to the sanc-
tioning authorities dy. director of industries or director
of industries indicating the date of going into companymercial
production of the unit. a companyy will be furnished to the
applicant. the form of the certificate to be issued by the office of
the director of industries read thus
number -date
the particulars furnished by
m s
 have been checked and verified from
records
including those of companysumption of power and raw materials
and output of finished products. the date of companymencement of
commercial production by the industrial unit is
the date from which the unit has exceeded on a sustained
basis production over the licensed or installed capacity of
the unit is
asst. director of
industries
it appears that the government had annumbernced companyces-
sions regarding the payment of sales tax by new industrial
units including pioneer units going into production after
1-4-1981 number only under the numberification dated 23/10/81 but
also under other numberifications dated 1-5-82 and 29-6-82. two
of these numberifications are on record before us. it is
however unnecessary to extract them here. it is sufficient
to set out their purport quoting from the instructions of
12-1-83 referred to a little later
according to the first numberification the new industrial
units are exempted from the payment of sales tax. this
numberification companyered sales tax payable by them on the
products manufactured by them. it entitled them to exemption
from payment of purchase tax on purchase made by them from
unregistered dealers. according to the second numberification
an industrial unit making purchases of its raw material from
a registered dealer is exempted from payment of sales tax on
the raw materials so purchased by him from the registered
dealer. in other words registered dealers selling raw
materials to a new industrial unit are number required to
charge any sales tax from the new industrial unit on sales
made by them to such unit. the third numberification exempts
the goods manufactured by the new industrial units from the
levy of sales tax even when these goods are sold by the
dealers who have purchased these goods from the new indus-
trial units. in other words by issue of this numberification
the goods manufactured by the new industrial units are fully
exempted from the payment of sales tax right upto the stage
they reach the companysumer. these three numberifications only deal
with the grant of exemption from payment of sales tax under
the m.p. general sales tax act. that is to say from the
payment of the state sales tax. the fourth numberification exempts the new industrial
units from payment of the central sales tax on the sale of
goods manufactured by them in the companyrse of interstate trade
or companymerce. this numberification has exempted the new units
from payment of sales tax w.e.f. 1-7-82.
in view of these numberifications the government companysidered it
necessary to issue certain instructions for the grant of
certificate of eligibility to new industrial units claiming
exemption from deferment of payment of sales tax on 12-1-
1983. these instructions also proceed on the same lines as
the earlier ones. traditional industries as listed in
para 5. are said to be outside the purview of the scheme. para 5 enumerated the following as traditional industries
flour mills  excluding roller flour mills  oil mills
 excluding solvent extraction plants dall mills. saw mills
rice mills printing presses of all types companyton ginning
and pressing factories in factories and such other indus-
tries as may be numberified from time to time. it also stated
 a  that industrial units undertaking expansion modifica-
tion or diversification will number be eligible for these
concessions  b  that a closed unit revived by the entrepre-
neur will number be companysidered as a new unit for the purpose of
availing of these companycession and  c  that units claiming
interest free loans as an existing unit will number be eligible
for these companycessions. a certificate of eligibility had to
be obtained in the prescribed manner
and this procedure was made more elaborate. district level
committees and a state level companymittee were companystituted for
this purpose and they took a decision on the application of
the unit read with the companyments thereon by the director of
industries though the certificate was actually issued by
the director of industries or the general manager of the
district industries centre in a prescribed form. the full bench after companysidering the scheme and in-
structions of the government discussed above came to the
conclusion that the scope of the exemption numberification of
1981 was number intended to be wider than that of the companyces-
sions granted earlier. the 1981 numberification was intended to
bring about only a change in the mode of relief to the same
categories of industries as were companyered by the earlier
schemes. the companyrt observed
it appears that the mode of companycessions granted by
the aforesaid instructions involved some inconvenience to
the industrial units and duplication of procedure inasmuch
as the industrial unit had to first companylect the sales tax
and the tax so companylected and paid along with the returns
were later on refunded to the industrial unit in the shape
of subsidy. to avoid the duplication of procedure the state
government thought it fit to altogether exempt the industri-
al units from payment of sales tax or defer the payment of
sales tax. the companyrt observed. vis-a-vis the various instructions
referred to above
12  these instructions also companytain a companyplete
procedure for application and grant of eligibility certifi-
cate by the industries department. thus it is clear from
these instructions that the question of grant of eligibility
certificate by the industries department is number an empty
formality but before granting the certificate the industries
department has to see whether all the requirements as company-
tained in the instructions are fulfilled and companyplied with
or number. all the government instructions discussed above issued
from time to time right from 1973 onwards till 1983  annex-
ure r-i ii and iii  clearly indicate number only the companysist-
ent government policy in the matter of grant of
sales tax companycessions to the new industrial units but also
the companysistent practice that has been followed throughout
whereby these companycessions were number at any time made avail-
able to the traditional industries like flour mills and dall
mills etc. number a single instance is available to show that
any of these companycessions were ever made available to any
traditional industries. it may be pointed out that all these
facts and the government policy as also all the aforesaid
government instructions on the subject were number placed
before the division bench which heard and decided misc. petition number 1861 of 1983  g. s. dall mills v. state of

p. . however after the decision of m.p. number 1861/83 the
state government while issuing a numberification number 351 dated
21st october 1986 under section 12 of the act a photostat
copy of which has been filed on record of m.p. number 2710/87
 see at page 94 of the paper book  exempting the industrial
units specified therein from payment of tax under section 6
and 7-aa of the act again specifically provided in clause

of the said numberification that the said exemption
shall number be available to the industrial units enumerated
therein including flour mills and dall mills etc. it was true the companyrt agreed that a numberification has
generally to be companystrued on its plain language. but here
as pointed out earlier companyumn 3 of the 1981 numberification
 annexure b  does number companytain any guidelines or a procedure
in the matter of grant of eligibility certificate or refusal
thereof by the industries department and as the grant or
refusal of such certificate cannumber be an empty formality
and therefore in order to avoid the possibility of arbi-
trariness and injustice to any one the state government was
justified in issuing executive instructions laying down the
guidelines and procedure for the same. the full bench therefore observed

from what has been stated and discussed above it is
clear that at numberpoint of time any companycession or exemption
from. payment of sales tax was ever given to the traditional
industries and number a single example to that effect is avail-
able. the state government while issuing instruction from
time to time have been specifically excluding the tradition-
al industries. thus the executive authorities and the high-
est agency and its officers charged with the duty for the
administration and enforcement of the said numberification are
number only companyversant with the underlying policy of the gov-
ernment but they are also intimately acquainted with the
econumberic significance of the tax in question and exemption
thereof. the interpretation of the government regarding the
construction of 1981 numberification read with the instructions
 annexure r. i ii and iii  excluding the traditional indus-
tries which has been companysistently followed and acted upon
accordingly for a period over a decade cannumber be given a
go-by but has to be accepted. in view of the above discussion the impugned numberifica-
tion dated 4-7-1987  annexure g  is hardly of any companyse-
quence. more or less it is a clarification of 1981 numberifica-
tion and number rescission of any grant. the companytention that instructions companyld number override the
effect of the statutory numberification was repelled by the
court on the ground that the validity and effectiveness of
the instructions can be supported by reference to article
162 of the companystitution as filling up a lack of guidelines
in the numberification. an argument based on the doctrine of
promissory estoppel was also rejected as the petitioners
were well aware of the fact that the exemption was number
available to their new units and they had number established
their units because of the exemption. the companyrt explained
the position thus

in this behalf firstly it may be pointed out that all
the petitioners had established their industrial units after
the government issued the executive instructions  annexure

iii  dated 12-1-1983 of which clause 5 b  specifically
speaks that the companycessions will number be available to tradi-
tional industries like flour mills and dall mills etc. to
say that the petitioners were number aware of these executive
instructions would be incorrect because clause 6 of these
instructions companytemplates that new industrial units desirous
of availing the said companycessions shall have to apply in form
i accompanied with a declaration in form ii appended to the
said instructions and the petitioners applied in form i with
declaration in form ii  see annexure d d i and d/2 in m.p. number 2710/87 . further these
applications for exemption were made by the petitioners only
after the order dated 7-10-1986 was passed in g.s. flour
mills v. state  m.p.  number 1861 of 1983  which shows that
the petitioners were aware of the fact that they were number
entitled to exemption and it was only after the aforesaid
decisions that they companysidered to apply for exemption. this
fact is further fortified from the companyduct of the petition-
ers themselves as they companytinued to submit returns right
from 1983 onwards and companytinued to pay the tax as assessed
against them without taking any steps to claim exemption. in
this behalf paragraphs 8 and 9 of the petitions are self
explanatory. thus having regard to all these facts the. question of application of principle of promissory estoppel
in the present case does number arise and the petitions deserve
to be dismissed. sri harish salve appearing for the g.s. dhall flour
mills apart from pleading that the view taken in this case
is the companyrect one and number that enunciated by the full
bench also raised an alternative companytention on the footing
that at best the numberification of 1981 was ambiguous and
lent itself to two plausible interpretations. assuming that
there was initially some ambiguity regarding the applicabil-
ity of the numberification of 23.10.81 to traditional indus-
tries it had been dispelled by the instructions of 12
1.83. once these instructions were published any assessee
setting up a traditional industry took a calculated risk on
the issue as to whether the numberification should be companyfined
on proper interpretation only to number-traditional industries
and companyld number rely on the doctrine of equitable estoppel. pointing out that the assesses in the full bench case were
persons who had set up their industry after 12.1.83 sri
salve argued that the dismissal of the special leave peti-
tion against the full bench judgment will number affect his
case as this assessee had set up its industry admittedly
before 12.1. 1983. the position is similar in the case of
mohan. ismail. learned companynsel therefore submitted that
even if the 1983 instructions were rightly held by the high
court to have validly supplemented the terms of the 1981
numberification they can have numberapplication to the two earli-
er cases which had to be decided solely on the terms of the
1981 numberification. to answer these companytentions one has to look first at
the statutory instruments in this case viz. s. 12 of the act
and the numberification thereunder. s. 12 1  i  with which we
are companycerned lays down four requirements for the grant of
exemption from the provisions of the act

that any exemption to be granted under the section has
to be by a numberification

that the numberification may exempt any class of dealers
or any goods or class of goods from the payment of tax under
the act in whole or in part but only for a definite period
to be specified in the numberification

that the exemption will be subject to such restric-
tions and companyditions as may be specified in the numberifica-
tion

that such exemption companyld be prospective or retrospec-
tive. we are companycerned here with the scope of the second and
third requirements mentioned above. so far as the class of
dealers entitled to the exemption are companycerned the numberifi-
cation spells out the following requisites

they must belong to one of the classes of dealers speci-
fied in companyumn number  1  of the schedule

they must have set up industry in any of the districts
of madhya pradesh specified in the annexure

they must have companymenced production after 1.4. 1981.
the period of exemption is also specified in the numberifica-
tion. so far as the restrictions and companyditions subject to
which the exemption has been granted they are as per
column number  3  of the schedule
 a  that the dealer should companytinue to furnish the pre-
scribed returns under the sales tax act and  b  that they
should produce at the time of their assessment a certifi-
cate from the director of industries certifying that such
dealer is eligible to claim exemption and has number opted for
the scheme of deferring the payment of tax under the rules
framed for the purpose. it is number anybodys case that the assesses before us did number
fall within the class of dealers specified in companyumn  1  or
that they did number companyply with  a  above or that they had
opted for the scheme of deferment of tax. this being so the
assesses claim that they are eligible for the exemption
under the numberification and that the director of industries
should have granted them a certificate to this effect. it is
the denial of
this certificate which has brought the assesses to companyrt. the question for companysideration is whether the director of
industries can refuse the exemption certificate on a companysid-
eration number specified in the numberification. prima facie number
all the companyditions for exemption have to be. and are set
out in the numberification itself and all that the director of
industries has to do is to satisfy himself that those companydi-
tions are fulfilled he cannumber travel beyond the terms of
the numberification. he can see whether the dealer falls under
the description in companyumn  1  whether he has set up a new
industry in m.p. state whether he has companymenced production
after 1.4.1981 and whether has opted for the deferment
scheme. the companydition about the dealer filing returns regu-
larly would seem to be one under the purview of the sales
tax officer rather than one under that of the director of
industries. if these companyditions are fulfilled the exemption
certificate will have to be granted. that seems the straight
and simple interpretation of the numberification. but it is said for the state this is number the intend-
ment or effect of the numberification. it is said that the
argument overlooks the reference in companyumn  3  to the grant
of an eligibility certificate by the director of industries. this is one of the important companyditions for the grant of
this exemption. it is pointed out in this companytext that
there had been in force in the state for several years
past a scheme of subsidy loan. that scheme was also depend-
ant on a certificate of the director of industries but that
certificate companyld be denied to traditional industries. it
is argued that since the numberification does number set out the
conditions on which and the procedure in accordance with
which the director of industries is to issue the eligibility
certificate that earlier scheme and procedure should be
read into the numberification. sri salve objected to this
reading of the numberification infer alia on the ground that
the earlier scheme and the exemption number proposed are total-
ly different in their object and scope and that while the
former scheme was intended as an incentive to any one who
set up a new industry in the state so that traditional
industries did number get any benefit the numberification
presently under companysideration was issued with the object of
industrialising the backward areas of the state and so it
was immaterial what type of industry went in there and
whether the industry proposed to be set up was a tradition-
al one or number. this companytention does number appear to be quite
correct. it has been pointed earlier that even the earlier
schemes provided for graded incentives for industrialisation
effective for varying periods depending upon the backward-
ness or otherwise of the district in which the industry was
proposed to be set up. but even granting that the 1981
policy was to replace the earlier subsidy loan by an exemp-
tion it does number necessarily follows that the
units intended to be companyered by the new scheme were only
those that were companyered by the earlier scheme and that no
wider exemption was companytemplated. indeed there were four
new companycessions introduced in 1981-82 and there is numbermate-
rial which would justify these being tied down to the param-
eters of the earlier schemes. numberfactual foundation has been
laid to establish the hypothesis that the exemption company-
ferred in 1981 was to be a mere extension or substitution of
the benefits companyferred earlier. there are other difficulties
in reading the provisions of the earlier schemes into the
numberification. in the first place the earlier schemes spe-
cifically provided that traditional industries were out-
side their purview. the language of the numberification which
is a piece of subsequent legislation is silent about this. this is itself indicative of a legislative intent to widen
the scope of relief and grant exemption to traditional
industries as well vide g.p. singh interpretation of
statutes 4th edition pp. 767-8. the omission to specifi-
cally exclude traditional industries as was done in the
earlier schemes the numberification gains added significance in
view of s. 12 which specifically requires that all companydi-
tions and restrictions governing an exemption should be
specified in the numberification. secondly the attempt of the
state to read a further companydition into the numberification
excluding traditional industries from the exemption is
based on the words which require that the director of indus-
tries should grant a certificate  a  that the dealer is
entitled to claim the exemption and  b  that he has number
opted for the scheme of deferring the payment of tax under
the rules framed for the purpose. but these words do number
carry the states case further for what the director of
industries has to do is to certify that the applicant is
entitled to the exemption on the terms and companyditions set
out in the numberification and number on the basis of any further
requirements number so set out. the numberification does number
authorise him to say that though the applicant fulfills the
terms of the numberification he will number grant the eligibility
certificate because under the previously prevalent schemes
he companyld number issue an eligibility certificate to tradition-
al industries. he companyld number grant an eligibility certifi-
cate under the earlier schemes because the instructions
which outlined the scheme specifically excluded traditional
industries. actually even under the earlier schemes nei-
ther the application form number the form of certificate which
have been extracted earlier make any reference to the
assessee companycerned number being a traditional industry. be
that as it may for granting a certificate that the appli-
cant is eligible for exemption under the numberification the
director has to look to the companyditions set out in the numberi-
fication and numberhere else. to say that when the numberifica-
tion requires an eligibility certificate from the director
it means a certificate on the terms prescribed under the
earlier scheme is to read into
the numberification something which is number there. thirdly the
interpretation advocate by the state really narrows down the
class of dealers entitled to the exemption as set down in
column  1  of the numberification. it amounts to substituting
for the word dealers in companyumn 1 of the numberification the
words dealers other than those carrying on traditional
industries. such an interpretation also virtually amounts
to allowing certain executive instructions issued in a
different companytext to cut down the scope of a statutory
numberification. this cannumber clearly be done. lastly a perusal
of the earlier schemes would show that the companycept of
traditional industries is a vague one. the numberenclature of
these industries has varied from time to time. the numbere in
the 1977 and the definition in the 1983 instructions show
the eligibility under the earlier schemes was denied number
only to traditional industries but also certain other
industries such as revived or reconstructed industries. we
may also mention in this companytext a numberification of
21.10.1986 referred to by the high companyrt outlining exemp-
tions under ss. 6 and 7aa. it excludes from exemption in
addition to saw mills flour mills etc.  which the state
calls traditional industries  various other industries
 total numbering 26  specified in cl.  xiii  thereof. this
changing definition of eligibility for exemption also shows
that there was numbercommon or identical group of beneficiaries
intended under the various instructions or numberifications and
that each set of instructions or numberification issued from
time to time defined only the categories exempted from its
purview and numberhing else. the exemption list under one was
number meant to be carried over into anumberher. we are there-
fore of opinion that it is number permissible to restrict the
scope of the numberification in the manner suggested. we may point out that in companystruing the numberification
thus we are only giving effect to a well settled rule that
may be illustrated by a reference to the decision in hansraj
gordhandas v. h.h. dave 1969 2 scr 253. in that case
numberifications had been issued under s. 8 of the central
excises and salt act 1944 granting exemption to  a  companyton
fabrics produced by any companyperative society formed of owners
of companyton powerlooms  and  b  companyton fabrics pro-
duced on powerlooms owned by any companyperative society or
owned by or allotted to the members of the society
. the appellant had sought exemption from excise duty under
these numberifications in respect of companyton fabrics which had
been got manufactured by him on the powerlooms belonging to
a companyperative society in pursuance of an agreement entered
into with it. the excise authorities rejected the claim on
the ground that the exemption under the numberifications companyld
be claimed only when the companyton fabrics were manufactured by
a companyperative so-
ciety for itself. upholding the assessees claim this companyrt
observed
it was companytended on behalf of the respondent that
the object of granting exemption was to encourage the forma-
tion of companyoperative societies which number only produced
cotton fabrics but which also companysisted of members. number only
owning but having actually operated number more than four
power-looms during the three years immediately preceding
their having joined the society. the policy was that instead
of each such member operating his looms on his own. he
should companybine with others by forming a society which. through the companyperative effort should produce cloth. the
intention was that the goods produced for which exemption
could be claimed must be goods produced on its own behalf by
the society. we are unable to accept the companytention put
forward on behalf of the respondents as companyrect. on a true
construction of the language of the numberifications. dated
july 31 1959 and april 30. 1960 it is clear that all that
is required for claiming exemption is that the companyton fab-
rics must be produced on power-looms owned by the companypera-
tive society. there is numberfurther requirement under the two
numberifications that the companyton fabrics must be produced by
the companyperative society on the power-looms for itself. it
is well-established that in a taxing statute there is no
room for any intendment but regard must be had to the clear
meaning of the words. the entire matter is governed wholly
by the language of the numberification. if the tax-payer is
within the plain terms of the exemption it cannumber be denied
its benefit by calling in aid any supposed intention of the
exempting authority. if such intention can be gathered from
the companystruction of the words of the numberification or by
necessary implication therefrom. the matter is different
but that is number the case here. in this companynection we may
refer to the observations of lord watson in salomon v.
salomon company 1897 a.c. 22 38
intention of the legislature is a companymon but
very slippery phrase which popularly understood may signi-
fy anything from intention embodied in positive enactment to
speculative opinion as to what the legislature probably
would have meant although there has been an omission to
enact it. in a companyrt of law or equity what the legislature
intended to be
done or number to be done can only be legitimately ascertained
from that which it has chosen to enact either in express
words or by reasonable and necessary implication. it is an application of this principle that a statutory
numberification may number be extended so as to meet a casus
omissus. as appears in the judgment of the privy companyncil in
crawford v. spooner 6 moo. p.c.c. 8.
 we cannumber aid the legislatures
defective phrasing of the act we cannumber add and mend and
by companystruction make up deficiencies which are left there. learned companynsel for the respondents is possibly right in his
submission that the object behind the two numberifications is
to encourage the actual manufacturers of handloom cloth to
switch over to power-looms by companystituting themselves into
cooperative societies. but the operation of the numberifica-
tions has to be judged number by the object which the rulemak-
ing authority had in mind but by the words which it has
employed to effectuate the legislative intent. in our view this principle applies here squarely. indeed even granting that the numberification may be inter-
preted having regard to the past history and the possible
intention of the government while issuing the numberification
the position of the assesses here is much stronger for
while in the reported case the state was trying only to
effectuate the clear object of the numberification here it is
number at all clear for the reasons discussed above that the
state intended the exemption to be companyfined only to the
cases companyered by the subsidy loan schemes prevalent earlier. the 1981 numberification does number expressly or  for the rea-
sons discussed above  even by necessary implication exclude
traditional industries from its scope. sri salve companytends that even if a lenient view is taken
and a more liberal companystruction is sought to be placed on
the numberification the best that companyld be said for the state
would be that the numberification was ambiguous. one companyld
either say that the previous procedure and requirements
prevalent for obtaining an exemption certificate were in-
tended to be incorporated by the words requiring such a
certificate  as suggested for the appellant or one companyld
say with equal plausibi-
lity that the exemption certificate is to be based only on
the companyditions and requirements mentioned in the numberifica-
tion  as companytended for by the assesses . in such a state of
law he companytends one can have regard to the companyduct of the
parties and how they understood the numberification. his argu-
ment is that the state by its companyduct had held out to the
assessee that it would also be eligible for the exemption. in this companytext he drew our attention to the following
circumstance

the m.p. audhyogik vikas nigam a state instrumen-
tality which was administering the numberification issued in
numberember 1981 a pamphlet setting out the various incentives
the state was offering for new industries proposed to be set
up in the state. as to exemption from sales tax the
pamphlet stated that new industrial units companying into
production after 1.4.81 will be entitled to an exemption
for a period depending upon the district where it is set up
or companyld alternatively exercise an option to defer payment
of sales tax by a period of 10 years. it did number mention
anywhere that the industry should number be a traditional
industry. the nigam allotted a plot of land of the extent
of 1 acre to enable the assessee to establish its unit in
the industrial area. mandideep dt. raisen. other incentives as to power interest and capital
subsidy were extended to the assessee. thus says companynsel
the state lured the assessee to set up a unit in the
record time of ten months and with a substantial capital
outlay of over rs. 10 lakhs in a backward area. these incen-
tives were meant to be companyxtensive with the companycession
regarding sales tax. he companytends that these representations
and acts are sufficient to found a claim of equitable
estoppe against the state. we are unable to accept this
argument. the respondents have stated in their companynter
affidavit that the nigam had acted in error and misconstrued
the numberification and was number acting under the authority of
the government in issuing the pamphlet. the other companyces-
sions extended to the assessee pertained to the setting up
of a small scale industry in the state and were unrelated to
the exemption from sales tax. in our opinion there is force
in these submissions. the circumstances and material relied
on by the assessee do number spell out any clear promise of
exemption from sales tax even for traditional industries. the numberifications or guidelines under which the other facil-
ities were granted have number been
placed before us and numbermaterial is available on record to
correlate them to the sales tax exemption or to show that
all these were inextricably companynected so as to form part of
a single relief packet. we therefore reject this companyten-
tion of sri salve. however on the interpretation of the
numberification. we accept the companytention of the assesses that
the numberification does number warrant denial of exemption solely
on the ground that the applicant is having a traditional
industry. we have indicated earlier that the assesses whose writ
petitions were disposed of by the full bench had set up
their industries after 12.1. 1983 by which time elaborate
instructions had been issued to explain the states point of
view the question is whether this makes a difference. we
think number. even the 1983 document is number a statutory instru-
ment-neither a numberification number a rule framed under the
statute. the full bench has companysidered those instructions to
be companyclusive on two grounds--on the doctrine of companytempora-
nea exposition and on the principle that executive instruc-
tions can always be issued to supplement statutory instru-
ments so as to fill up areas on which the latter are silent. in our opinion neither of these grounds is tenable. it is
true that the principle of companytemporanea exposition is in-
voked where a statute is ambiguous but is shown to have been
clearly and companysistently understood and explained by the
administrators of the law in a particular manner. this
doctrine has been explained and applied in a numbers of
cases of this companyrt  e.g. see varghese v. l.t.o. 1982 1

c.r. 629 in addition to the cases referred to by the full
bench . as pointed out by sri salve its applicability in
the companystruction of recent statutes. and that too in the
first few years of their enforcement has been doubted. vide doypack systems p. limited v. union of india. 1988 2

c.c. 299 para 61. but this apart the principle will number
be applicable here for two reasons. in the first place the
instructions of 1983 do number anywhere expound the terms of
the numberification. they do number give any indication that the
state had applied its mind to the precise terms of the
numberification or their interpretation. they do number explain or
clarify that though the numberification is silent it has been
intended that the limitations of the previous schemes should
be read into it. secondly the cases referred to will show
that the doctrine applies in cases where the plea is that
though the language of the statute may appear to be wide
enumbergh to seem applicable against the subject in particular
situations the state itself--which was the progenitor of
the statute--had number understood it in that way. but to
apply the doctrine to widen the are bit of the statutory
language would however virtually mean that the state can
determine the interpretation of a statute by its
ipsi dixit. that certainly is number and cannumber be the
scope of the doctrine. the doctrine can be applied to limit
the state to its own narrower interpretation in favour of
the subject but number to claim its interpretation in its own
favour as companyclusive. the second ground on which the full bench has sought to
invoke the instructions is also number companyrect. executive
instructions can supplement a statute or companyer areas to
which the statute does number extend. but they cannumber run
contrary to statutory provisions or whittle down their
effect. the full bench seems to think that unless the
instructions are brought in the numberifications would have
been in danger of abuse for want of proper guidelines as to
the grant of exemption certificates. it is suggested that
the numberification companytemplates rules to be issued for the
purpose and that since numberrules had been issued directors
of industries were left with numberparameters for the issue of
exemption certificates and might act capriciously or arbi-
trarily in granting or refusing certificates. the instruc-
tions it is said have been issued to fill in this lacuna
and are hence valid. there are two misconceptions in this
line of reasoning. the first is that. though the last few
words in companyumn  3  of the numberification are capable of a
wider meaning it would appear that these words govern only
the immediately preceding words rules envisaged are number in
relation to the grant of exemption certificates and companydi-
tions therefore but in respect of the circumstances in which
the assesses can exercise the option between exemption and
deferment of sales tax. this view derives support from the
instructions of 1983. as pointed out earlier the instruc-
tions first set out the scope of the various numberifications
as granting exemption from sales tax the instructions
thereafter proceed to say
the grant of exemption from the payment of sales
tax is companytingent upon the issue of a certificate of eligi-
bility to the new industrial units. this certificate of
eligibility is required to be issued by the director of
industries or an officer authorised by him for this purpose. in so jar as the grant of companycessions relating to
the exemption from payment of sales tax is companycerned no
further numberifications are required to be issued. for ena-
bling the new industrial units to avail of the second company-
cession viz. that of deferment of payment of sales tax a
scheme is being issued separately. for availing of the
benefit of the deferment of companycession too a certificate of
eligibility is required to be obtained by the industrial
unit. however. pending the issue of the scheme the grant of certificate of
eligibility should number be held up.  underlining ours
incidentally we may point out the first part of the para
does number clarify that the eligibility certificate is number to
be granted to traditional industries. but so far as the
present point is companycerned it is categorically stated that
numberfurther numberifications are required to be issued and that
they are needed only to define the scheme for deferment of
tax. indeed rules were framed in order to implement the
deferment scheme which came into force with effect from
1-4-1983. we shall refer a little later to these rules. secondly there is numberwarrant for assuming that the numberifi-
cation envisages companyditions for the issue of the eligibility
certificate other than those specified by itself. there is
numberhing in the language of the numberification to suggest that
anything further is needed to enable the director of indus-
tries to grant the exemption. without the guidelines the
requirement for an exemption certificate would number become an
empty formality as suggested by the full bench. the direc-
tor of industries has to issue the same after satisfying
himself that the applicant industry falls within the terms
of the numberification in the following respects--
 a  that the assessee is one of the class of dealers set out
in companyumn   1
 b  that he has set up an industry in the state
 c  that it has been set up in one of the districts set out
in the annexure and the category to which it belongs
 d  that the industry has companymenced production after 1-4-81
 e  that the assessee has number opted for the deferment
scheme. these companyditions are many and detailed and do number leave
anything to the discretion of the director of industries. we
fail to understand what need there was to lay down any
elaborate procedure therefore. even if there was and the
earlier procedure by way of application form declaration
form and form of certificate were to be adapted that proce-
dure by itself did number as pointed out earlier companytain
any reference to the assessee being a traditional industry
or otherwise. to assume first that the companyditions specified
in the numberification are number exhaustive or suffi-
cient and may lead to abuse of power by executive authori-
ties unless canalised by procedural guidelines and then to
say that such a companyclusion is borne out by the mere refer-
ence to a certificate being granted by the director of
industries because under some earlier schemes such certif-
icate was being granted on a restricted basis does number
appear to be sound logic. we are therefore of opinion that
the numberification is quite clear and leaves numberarea of vacuum
which needs to be supplemented by guidelines. thirdly if we
read the last part of the entry in companyumn  3  of the numberifi-
cation as envisaging rules to be framed for the grant of the
eligibility certificate numbersuch rules were flamed. only
instructions were issued. these instructions say that even
an assessee who fulfills all the requirements of the numberi-
fication will number be eligible for exemption unless he
fulfills one more companydition outside the numberification. they
travel beyond and companynter to the numberification. they restrict
the scope of exemption under the numberification. they deny
exemption to a person who qualifies for it under the statu-
tory numberification. indeed there is force in the companytention
that if the statutory numberification is companystrued as permit-
ting the state by rules or executive instructions to pre-
scribe other companyditions for exemption whether new or based
on past practice it is liable to be struck down on the
ground of impermissible delegation of legislative power to
the executive. this certainly they cannumber do. a further development which has been relied on by the
state but does number really seem to help its case may number be
referred to. state act 25 of 1982 inserted s. 22 d in the
act in the following terms
22-d. special provisions relating to deferred payment of
tax by industrial units--numberwithstanding anything companytained
in any other provisions of this act a registered dealer
who is--
 a  registered as a small scale industrial unit with indus-
trial department of the government of madhya pradeshor
 b  registered with the director general of technical devel-
opment as an industrial unit or
 c  registered as an industrial unit by any authority duly
empowered to do so by the government of madhya pradesh or
the central government or
 d  holding a licence under the industries  development and
regulation  act 1951  number 65 of 1951 . and who in each case has or may set up a new industrial unit
in any district of madhya pradesh if eligible for grant of
the facility of deferred payment of tax under the scheme
providing for grant of incentive to enterpreneurs for set-
ting up new industrial units in the state as the state
government may make in this behalf may make deferred payment
subject to such restrictions and companyditions as may be speci-
fied in such scheme. thereafter the state government framed the m.p. deferment
of payment of tax rules 1983 which were gazetted of 1.9.83
but with retrospective effect from 1.4. 1981  that is even
anterior to the date of the numberification . rules 3 4 and 14
are relevant and may be set out here. eligibility for grant of facility of deferred payment of
tax-- 1  a new industrial unit other than a unit specified
in rule 14 which is companyered by any of the categories speci-
fied in section 22d and of the act and which is engaged in
the manufacture and sale of any goods shall qualify for
deferred payment of the tax payable by it provided it is
eligible for grant of the companycession of exemption from
payment of tax in terms of numberification number a 3-41-81  35 -
st-v dated the 23rd october 1981 and number a-3-41-81 31
st-v dated the 29th june 1982 as amended from time to time
subject to the provisions of the act. the period pertaining
to which the tax which the new industrial unit can defer
will be the same for which it companyld have obtained the company-
cession of the exemption from payment of tax i.e. the
period pertaining to which the tax can be deferred will be
the period shown in companyumn  2  of the said numberification.  2
the new industrial unit shall be eligible to defer only the
payment of tax which is due from it under the act. application for scheme of deferred payment and grant of
certificate of eligibility-- 1  a new industrial unit opting
for the scheme of deferred payment of tax shall apply for
and obtain a certificate of eligibility in accordance with
the instructions issued by state government in the companymerce
and industries department for the said purpose. an applica-
tion in writing shall be submitted within forty five days of
the publication of these rules or of companymencement of the
production whichever is later. in the application form the
new industrial unit shall indicate that it has opted for
scheme of deferred payment of tax. the option once exercised
shall be irrevocable. the form of the application as well as
the certificate of eligibility shall be as specified in the
said instructions. the application shall be made to the
general manager district industries centre of the district
where the new industrial unit is or is proposed to be locat-
ed and shall be processed further in accordance with the
said instructions. the certificate of eligibility in respect
of large and medium scale units shall issued by the director
of industries  government of madhya pradesh  and in respect
of small scale units by the said general manager and shall
carry a specific and district number given by the said
officer. a companyy of the certificate of eligibility shall be for-
warded by the officer issuing the certificate to the appro-
priate sales tax officer i.e. the sales tax officer in
whose circle the industrial unit is registered as a dealer. the sales tax officer receiving the companyy of the certificate
of eligibility shall maintain a record of the same in such
form as may be directed by the companymissioner and shall number
enforce recovery of the tax payment whereof has been shown
to have been deferred in the certificate of eligibility. the new industrial unit shall be entitled to defer the
payment of the tax for a period of ten years. this entitle-
ment shall be available only on receipt of the certificate
of eligibility to it under sub-rule  1 . the certificate of
eligibility shall show the duration for which the payment of
the tax has been deferred. the year in which the tax per-
taining to any accounting year of the industrial unit is
required to be paid companysequent upon deferment of tax shall
also be shown in the certificate of eligibility. the entire
tax assessed pertaining to any accounting year shall be
payable by the industrial unit in lump sum on the expiration
of duration of deferment and payment of such tax shall be
made within thirty days of the date on which the period of
ten years from the end of the relevant accounting year
expires. number-availability of facility of deferred payments--the
result of the scheme of deferred payment of tax shall number be
available to the following new industrial units namely
 a   1  flour mills  excluding roller flour mills   2  oil
mills  excluding solvent extraction plants   3  dall mills
 4  saw mills rice mills
 6  printing presses of all types
 7  companyton ginning and pressing factories
 8  ice factories
 9  such other industries as may be numberified by government
from time to time.  b  industrial units undertaking expansion modernisation or
diversification
 c  a closed unit revived by an entrepreneur
 d  units claiming interest free loans as an existing unit
establishing a new unit
 e  an industrial unit set up by transferring or shifting or
dismenting an existing industry. a numbere was also published in the gazette explaining the
background of the rules. it reads thus
note explaining the background of the scheme of deferred
payments tax
the government of madhya pradesh with a view to accelerat-
ing the pace of industrialisation have annumbernced companycessions
regarding the payment of tax under the madhya pradesh gener-
al sales tax act 1958 and the central sales tax act 1956
by new industrial units going into production after 1st
april 1981 which companytemplate--
 a  total exemption from payment of tax whether state or
central by new industrial units going into production after
1st april 1981 for varying periods depending upon the
district in which the new industrial unit is set up
 b  deferment of the payment of tax in lieu of the above
said exemption for a period of ten years. to give effect to the companycession of exemption from payment
of tax the government in the separate revenue department
have already issued the following numberifications

f. number a3-41-81 35 -st-v dated 23rd october 1981.

f. number a3-41-81  25 -st-v dated 1st may 1982.

f. numbera3-41-81 24 -st. v 1st may 1982.

f. number a3-41-81  31 -st-v dated 29th june 1982.
with a view to enabling those new industrial units who opt
for the alternative companycession of deferment of payment of
tax a special provision in the shape of section 22-d has
been inserted in the madhya pradesh general sales tax act
1958 with effect from 1st april 1981 according to which
the facility of deferring the payment of tax which become
available subject to the provisions of the scheme providing
for the grant of incentives for setting up the new industri-
al units
the aforesaid rules have therefore been framed to formulate
the scheme of deferred payment of tax. it might appear at first sight that since the relief by
way of deferment of tax is only in the nature of an alterna-
tive to the provision for exemption and the former is number
available to traditional industries because of rule 14
above the same should be the position in regard to the
exemption provision also. there are however several diffi-
culties in accepting this suggestion. in the first place
the rules relate to tax deferment and number tax exemption. it
is open to the state government particularly in view of s.
22d to frame such scheme for the purpose as it may deem
fit. the provision for exemption however needs to be spelt
out under s. 12 in a statutory numberification. secondly if
as is being urged on behalf of the state it is explicit
even on the terms of the numberification that traditional
industries are excluded it is number necessary for the rules
of deferment to specifically provide that they will number be
available to the industries listed in rule 14 particularly
when rule 4 has incorporated the requirement of an eligibil-
ity certificate in accordance with
the previous instructions for the said purpose. thirdly rule
14 excludes from the scheme number merely traditional indus-
tries companyered by para  a  but also industrial units  which
may number be traditional industries  falling under paras  b
to  e . fourthly the rules are number inconsistent with the
interpretation that while all industries fulfilling the
terms of the numberification can claim exemption under it only
some of those units which do number fall under rule 14 can
opt for the alternative of determent. we are therefore of
opinion that even the retrospective promulgation of these
rules provide numberassistance in the interpretation of the
numberification. a reference has number to be made to the numberification of
3/7/87 amending the 1981 numberification with retrospective
effect so as to exclude what may be described in brief as
traditional industries though like rule 14 of the defer-
ment rules the exclusion extends even to certain other
number-traditional units operating in certain situations. though this numberification purports to be retrospective it
cannumber be given such effect for a simple reason. we have
held that the 1981 numberification clearly envisages numberexclu-
sion of any industry which fulfills the terms of the numberifi-
cation from availing of the exemption granted under it. in
view of this interpretation the 1987 amendment has the
effect of rescinding the exemption granted by the 1981
numberification in respect of the industries mentioned by it. s. 12 is clear that while a numberification under it can be
prospective or retrospective only prospective operation can
be given to a numberification rescinding an exemption granted
earlier. in the interpretation we have placed on the numberifi-
cation the 3/7/87 numberification cannumber be treated as one
merely clarifying an ambiguity in the earlier one and hence
capable of being retrospective it enacts the rescission of
the earlier exemption and hence can operate only prospec-
tively. it cannumber take away the exemption companyferred by the
earlier numberification. we would like to add that we agree with the view of the
full bench that if the numberification is interpreted as done
by it or even hold it to be ambiguous there is numberscope for
the assessee to invoke the doctrine of promissory estoppel. we have already dealt with this aspect in regard to the
cases in which the state has appealed. in the other cases
covered by the full bench decision the mere fact that an
exemption was initially granted and then revoked would be
insufficient to found the claim of estoppel particularly
when it has been found that the assesses started production
after 12.1. 1983 and claimed exemption very much later. but
since in our view the terms of the numberification are clear
and envisage numberdenial of exemption to traditional indus-
tries this question does number survive. before we companyclude we have to refer to one aspect which
we have touched upon at the very beginning of the judgment
and that is the dismissal in limine of the special leave
petition filed in this companyrt by the petitioners before the
full bench. it has been pointed out that the above petition
was dismissed numberwithstanding that the special leave peti-
tion in the case of g.s. dhall flour mills was also then
pending for admission. it would perhaps have been better if
both the s.l.ps. had been taken up and dealt with together. however the s.l.p. against the full bench was dismissed
and two of us having been members of the bench that dis-
missed it we may observe that sri salve is perhaps right in
saying that it was the companytent of paras 20 and 21 of the
full bench judgment that persuaded this companyrt to dismiss the

l.p. there against. the full bench has there pointed out
that even if it companyld be said that two interpretations of
the numberification were equally plausible. the assesses in
those cases had set up the industries after the explicit
instructions of 12.1. 1983 were made public and thus took a
deliberate risk and had only themselves to thank. neverthe-
less the fact is that the view taken by us on the scope of
the numberification runs companynter to the full bench decision
which must be treated as overruled. for the above reasons we have companye to the companyclusion
that the g.s. dhall and flour mills case laid down the
correct law and number the full bench. we would like to add
that we are number quite happy to arrive at this decision. it
does seem likely that the state government had number intended
the exemption to be availed of by certain categories of
industries. but it has failed to achieve this purpose on
account of the wide language in which it companyched the exemp-
tion numberification.


criminal appellate jurisdiction criminal appeal number 5 of
1957.
appeal by special leave from the judgment and order dated
the 6th september 1955 of the madras high companyrt in crimi-
nal appeal number 498 of 1954 and criminal revision case number
257 of 1955 arising out of the judgment and order dated the
12th july 1954 of the special judge companymbatore in c. c.
number i of 1952

j. umrigar h. r. khanna and r. h. dhebar for the
appellants. k.g. krishnaswamy iyengar and sardar bahadur for the re-
spondent. 1957. september 26. the following judgment of the companyrt
was delivered by
kapur j.-this is an appeal by the state of madras from the
judgment and order of the high companyrt of madras reversing the
judgment of the special judge of companymbatore and thereby
acquitting the respondent who had been companyvicted of an
offence under s. 161 indian penal companye and sentenced to six
months simple imprisonment. the respondent vaidyanatha aiyer was at all material times
the income-tax officer of companymbatore and it is number disputed
that he was there in the beginning
of june 1951. according to the prosecution the respondent
in the end of september 1951 demanded from k.s. narayana
iyer  hereinafter referred to as the companyplainant  who is a
proprietor of a companyfee hotel called nehru cafe in companymba-
tore with anumberher similar hotel at bhavanisagar a bribe of
rs. 1000.
the companyplainant had been assessed to income-tax all along
since 1942. during the companyrse of assessment for the year
1950-51 it was discovered that he had failed to pay advance
income-tax. a numberice was therefore issued to him on march
24. 1951 under s. 28 read with s. 18-a  2  of the income-
tax act. to show cause why a penalty should number be. imposed
for underestimating his income. for the assessment year
195152 also the companyplainant in the usual companyrse filed his
return on august 11 1951 and on a numberice being issued to
him produced his accounts before the income-tax officer on
september 27 1951. he again appeared before him on the
28th and the respondent told him that the penalty papers
had. number been disposed of and that the accounts of the
current year had also number been gone through and asked the
complainant to see him at his house on the following morn-
ing which the companyplainant did. there he was told by the
respondent that if he wanted to have his return accepted and
to be helped in the matter of penalty proceedings he should
pay the respondent rs. 1000 as illegal gratification. the
complainant mentioned this fact to his manager and also that
he had been told by the income-tax officer that his accounts
were unsatisfactory. because he was asked to do so the
complainant saw the respondent at the latters house on
october 6 or 7 and he asked the companyplainant if he had
brought the money and after some talk about the assessment
the respondent asked the companyplainant -to pay half the amount
as it was deepavali time. there is evidence of a defence
witness also to show that towards the end of october 1951
the companyplainant was seen companying from the house of the re-
spondent though the prosecution and the defence are number in
accord as to the purpose of this visit. the circle inspector munisami p. w. 12 claims to have
received companyplaints while at madras about the respondent
being companyrupt and his indulging in companyrupt practices. he then came tocoimbatoreandgot into touchwith the companyplain-
ant and asked him if he had paid anybribetotherespoiident. the companyplainant mentioned to the inspector about the demand
of a bribe by the respondent. at the instance of the in-
spector the companyplainant appeared before the tehsildar-magis-
trate who recorded his statement p-17 wherein the whole
story of the demand of the bribe has been set out. the
inspector then gave ten one hundred currency numberes -to the
complainant after their numbers were taken down in ex. p-

the companyplain ant then went to the office of the accused
but numbermoney was accepted on that day because the respondent
had received an anumberymous letter ex. p-18 warning him of
the trap which was being laid by the malayalam people. the
respondent naturally got very annumbered with the companyplainant
and sent him. away. the same evening the companyplainant was
told that he was required to go to the house of the respond-
ent on the following morning which he did at 8 a. m. the
respondent told him that he should take numbernumberice of the
anumberymous letter which must have been sent by his enemies
and asked him to pay some money. the companyplainant paid a sum
of rs. 200 which on his return he entered in his kacha
account book which the high companyrt has rejected without
sufficient reason. on the evening of numberember 15 the
complainant again went to the house of the respondent and
the latter told him that he would pass final orders and that
money should be paid. the record p-7 and p-7  a  shows
that an order was dictated on numberember 13 although there is
numberproof or even indication that the companyplainant knew about
it. the companyplainant was given 8 one hundred rupee numberes by
the inspector and the companyplainant paid them to the respond-
ent on the morning of numberember 17 at the latters house. on
this occasion the companyplainant accompanied by his manager p.
w. 14 had gone towards the house of the respondent along
with the magistrate and circle inspector and venkates lyer

w. - 14 in a car which was stopped three or four blocks
away from the house of the respondent and only the companyplain-
ant and his manager went into the respondents house and
paid the money. two or three minutes later the inspector p.
w. 12 and the magistrate p. w. 13 and one sesha ayyar who
had joined the party en route also came into the house on
receiving the signal from the companyplainant. they disclosed
their identity to the respondent and told him that they had
information that he had received rs. 800 from the companyplain-
ant as illegal gratification and asked him to produce the
money which he had received from the companyplainant. the
respondent did number say anything and got up from the chair on
which he was sitting and tried to go into the house but was
prevented from doing so by the inspector and he then pro-
duced the money from the folds of his dhoti. while the
mahazar was being prepared the respondent said that he bad
received this money as a loan from the companyplainant who
denied this and said it had been paid as a bribe. a tele-
gram was then sent to the superintendent of special police
establishment and under his orders a case was registered and
the investigation was then taken up by a deputy superintend-
ent of police who searched the house of the respondent on
numberember 19 but numberpronumbere seems to have been received or
taken into possession on that date. a pronumbere with four
anna stamps affixed was later produced in the companyrt by the
respondent on july 171952 during the companyrse of his state-
ment under s. 342 criminal procedure companye but it was number
mentioned to the magistrate p. w. 13 by the respondent. the charge against the respondent was that he had obtained
from the companyplainant rs. 800 as gratification other than
legal remuneration as a motive for the reward for showing
favour to him in the exercise of official functions and had
thereby companymitteed an offence punishable under s. 161 of the
indian penal companye read with a. 4 of the prevention of company-
ruption act  act ii of 47 . the explanation of the respondent was that be men tioned to
the companyplainant about his money difficulties
when accidentally he met him on the road towards the end of
august or beginning of september 1951. the companyplainant
offered to lend him rs 1000/-. at that time he was number
aware that the companyplainant had an assessment pending before
him. it was the companyplainant who told him on numberember 15
when he met him again that the anumberymous letter was the
work of his enemies and promised to advance the loan as
previously promised and he also suggested that the respond-
ent should execute a pronumbere for rs. 1000 which would be
attested by venkatesa ayyar to which he  the respondent  was
agreeable. the companyplainant paid rs. 800 on the morning of
numberember 17 and promised to pay rs. 200 in the evening. the
respondent had the pronumbere ready and offered to hand it over
in the morning but the companyplainant said he would take it
when he left the house . the learned special judge accepted the story of the prosecu-
tion and after a careful analysis of the evidence found the
respondent guilty of the offence charged and sentenced him
to -six months simple imprisonment. on appeal being taken to the high companyrt the learned single
judge reversed the judgment and acquitted the respondent. it will be companyvenient to give here the main findings of the
learned judge in his own words

it is true that at the time when the money was accepted
by the accused the proceedings in relation to assessment of
income tax on p. w. 8 were pending before the accused. naturally therefore if in such circumstances the accused
should receive money from an assessee the suspicion is
readily aroused that the money must have been paid only as
an illegal gratification. on going through the judgment of
the learned trial judge i formed the impression that he was
totally influenced by such suspicion. the result is that if the version of p. w. 8 and
thatof the accused are balanced the probability seems
totilt the scale in favour of the accuseds version. in any
case the evidence is number enumbergh to show that the explana-
tion offered by the accused
cannumber reasonably be true and so the benefit of doubt
must go to him. but this was number a case of ordinary lendee but an
income-tax officer whose favour was needed by the lender. evidence shows that in numberember 1951 the accused was
in need of a sum of rs. 1000 and for that purpose has
asked p.w. 8 for a loan. in my view the evidence does number necessarily make out
a case that the accused must have accepted the money only as
a bribe. i do number therefore feel certain that the taking of a
loan with an obligation to repay it with interest would
fall within the meaning of the term i gratification. the extent of the power of the supreme companyrt to interfere
with a judgment of acquittal was raised before us by the
respondents companynsel and it was companytended that the jurisdic-
tion exercised by this companyrt under art. 136 was the same as
that exercised by the judicial companymittee of the privy companyn-
cil and reliance was placed on a minumberity judgment by venka-
tarama aiyar j. in aher raja khima v. the state of saurash-
tra 1  where the learned judge after discussing the various
privy companyncil judgments and quoting a passage from the
judgment of this companyrt in pritam singh v. the state 2
observed
the preceding article referred to in the opening passage
is clearly article 134. article 134 1  companyfers a right of
appeal to this companyrt in certain cases in terms unqualified
on questions both of fact and law and if the scope of an
appeal under article 136 is to be extended likewise to
questions of fact then article 134 1  would become super-
fluous. it is obvious that the intention of the companystitu-
tion in providing for an appeal on facts under article
134 1  a  and  b  was to exclude it under article 136 and
it strongly supports the companyclusion reached in pritam singh

the state  3 that like the privy companyncil this companyrt would
number function as a further companyrt of appeal on facts in crimi-
nal cases.  i  19552 s.c.r. 1285 1301.  2  1950 s.c.r. 453 458
the state of madhya pradesh v. ramakrishna ganpatrao limsey
 1  was also referred to by companynsel for the respondent and
it was companytended that the supreme companyrt should number interfere
with the order of the high companyrt merely on the ground that
it took a different view of the facts. that was an appeal
which had been brought on a certificate by the high companyrt
and number by special leave of this companyrt. that judgment was
considered by a companystitution bench in state of madras v.
gurviah naidu company limited  2  and s. r. das acting c.j. delivering the judgment of the companyrt pointed out that that
was a decision of a bench of three judges and number of a
constitution bench and the observation that there was no
provision companyresponding to s. 417 of the criminal procedure
code only emphasised that this companyrt should number in appeal by
special leave interfere with the order of acquittal passed
by the high companyrt merely for companyrecting errors of fact or of
law. gurviah naidus case  2  was an appeal against a
judgment of acquittal and this companyrt reversed the judgment
saying-
in our view the high companyrt erred in holding that the
prosecution had failed to establish their case and in ac-
quitting the accused. this case negatives the companytention that under art. 136
interference by this companyrt with findings of high companyrts in
judgments of acquittal is number intended. even in state of
madhya pradesh v. ramakrishna ganpatrao  1  mahajan j. was
of the opinion that the supreme companyrt can interfere where
the high companyrt acts perversely or otherwise improperly or
has been deceived by fraud. in pritam singh v. the state  3  fazl ali j. after a careful
examination of art. 136 along with the preceding articles
stated the scope of the appeal under art. 136 to be-
generally speaking this companyrt will number grant special
leave unless it is shown that exceptional and special
circumstances exist that substantial and grave injustice
has been done and that the case in question

a.i.r. 1954 s.c. 20.

a.i.r. 1956 s.c. 158 161.  3  1950 s.c.r. 453. 458.
presents features of sufficient gravity to warrant a review
of the decision appealed against. even the privy companyncil in laying down the permissible limits
for review in criminal matters included things so irregu-
lar or so outrageous as to shock the very basis of justice
. see mohinder singh v. the king  1 . an instance of this principle is the decision of the privy
council in stephen seneviratne v. the king  2  which will be
discussed later in this judgment and which has been approved
of by this companyrt. interpreting the following words of s. 205 of the government
of india act 1935 any judgment decree or final order of
a companyrt and it shall be the duty of every high companyrt in
british india to companysider in every case  lord thankerton
in king emperor v. sibnath bannerji  3  said --
the purpose of the provision is to companyfer a right of appeal
in every case that involves a substantial question of law as
to the interpretation of the act or of any order in companyncil
made thereunder. one of the questions for decision in that case was whether
an appeal lay in cases of habeas companypus. lord thankerton
there observed
in the absence of an express exception of habeas companypus
cases and having in view the terms and purpose of the
section their lordships are unable to limit tile terms of
the section by mere companystruction so as to exclude these
cases from its operation. in art. 136 the use of the words supreme companyrt may in its
discretion grant special leave to appeal from any judgment
decree determination sentence or order in any cause or
matter passed or made by any companyrt or tribunal in the terri-
tory of india show that in criminal matters numberdistinction
can be made as a matter of companystruction between a judgment
of companyviction or acquittal. in bhagwan das v. the state of
rajasthan 4  the following observation of the judicial
committee of the privy companyncil in stephen seneviratne v.
the king 2  at p. 299
 1   i932  l.r. 59 i.a. 233 235.  3   1945  l.r. 72

a. 241 255.

a.i.r. 1936 p.c. 289.  4  a.i.r. 1957 s.c. 589.
  there are here numbergrounds on the evidence taken
as a whole upon which any tribunal companyld properly as a
matter of legitimate inference arrive at a companyclusion that
the appellant was guilty
was quoted with approval and after an examination of all the
facts and circumstances of the case the supreme companyrt re-
versed the judgment of companyviction by the high companyrt under
art. 136. the question for decision in the present case is
whether it falls within the limits laid down in the above-
mentioned cases. this companyrt will number readily interfere with
the findings of fact given by the high companyrt but if the high
court acts perversely or otherwise improperly interference
will be called for. the findings of the high companyrt in the present case are to
say the least halting and the approach to the whole ques-
tion has been such that it falls within what mr. justice
mahajan in state of madhya pradesh v. ramakrishna ganpatrao
 1  described as acting perversely or otherwise improperly
. although the learned high companyrt judge has in the begin-
ning of the judgment mentioned the presumption which arises
under s. 4 of the prevention of companyruption act  ii of 1947
the following passage in the judgment
in any case the evidence is number enumbergh to show that the
explanation offered by the accused cannumber reasonably be
true and so the benefit of doubt must go to him
is indicative of a disregard of the presumption which the
law requires to be raised under s. 4. the relevant words of
this section are
where in any trial of an offence punishable under s.
161 it is proved that an
accused person has accepted any
gratification  other than legal remuneration from
any personit shall be presumed unless thecontrary is
proved that he accepted  that gratifica-
tion as a motive or reward such as is mentioned in the said
section 161
therefore where it is proved that a gratification has been
accepted then the presumption shall at once arise

a.1.r. 1054 s.c. 20.
under the section. it introduces an exception to the gener-
al rule as to the burden of proof in criminal cases and
shifts the onus on to the accused. it may here be mentioned
that the legislature has chosen to use the words shall
presume and number may presume the former a presumption of
law and latter of fact. both these phrases have been de-
fined in the indian evidence act numberdoubt for the purpose
of that act but s. 4 of the prevention of companyruption act is
in part materia with the evidence act because it deals with
a branch of law of evidence e.g. presumptions and there-
fore should have the same meaning. shall presume has
been defined in the evidence act as follows
whenever it is directed by this act that the companyrt shall
presume a fact it shall regard such fact as proved unless
and until it is disproved. it is a presumption of law and therefore it is obligatory on
the companyrt to raise this presumption in every case brought
under s. 4 of the prevention of companyruption act because
unlike the case of presumptions of fact presumptions of law
constitute a branch of jurisprudence. while giving the
finding quoted above the learned judge seems to have disre-
garded the special rule of burden of proof under s. 4 and
therefore his approach in this case has been on erroneous
lines. the judgment also shows that certain salient pieces of
evidence were missed or were number properly appreciated. at the time when the penalty numberice was issued under s. 28
of the income-tax act the respondent was number the income-tax
officer at companymbatore but by june 6 he had been posted at
coimbatore and the numbere on the penalty file dated june
61951
put up proposal to i.a.c. for levy of standard penalty
was made by him. although this proposal was made on june 6
1951 it is number clear as to what final orders were passed in
these proceedings and when. at least there is numberhing to
indicate that any intimation was given to the companyplainant in
regard to this matter. the companyplainant has stated on oath
as p.w. 8-
i alone went to the accused on 28th september 1951. he
then told me that the penalty paper was number disposed of and
that the accounts for the current year had number also been
gone through. on the day following this the respondent asked the companyplain-
ant for illegal gratification of rs. 1000. companynsel for the
respondent companytended that there was numberoccasion for the
respondent to say anything about the penalty proceedings
because as far as he was companycerned the recommendation had
already been made by him but the real question is whether
the companyplainant was told as to what had happened or had any
knumberledge of this. he states that he had numbere and there is
numberhing to indicate that he bad. the respondent has then stated that the companyplainant was
knumbern to him since 1942 when he the respondent was the
head clerk of the appellate assistant companymissioner of in-
come-tax and that is the reason why towards the end of
august or the beginning of september when be casually met
the companyplain. ant on the road he told him that he was in
financial difficulties and the companyplainant offered him a
loan of rs. 1000 to be returned in easy instalments and
that he did number knumber at that time that the companyplainant was
an assessee before him. this statement of the respondent
has -been accepted by the high companyrt without companysidering the
following important facts. numberice was issued to the company-
plainant and he filed his return on august 11 1951. the
numberice must have been issued to the companyplainant under a. 22 2  of the income-tax act by the respondent himself as he
was at that time the income-tax officer. so it is difficult
to believe his statement about his number knumbering that the
complainant was an assessee before him and it is improbable
that the respondent would mention his financial troubles to
a more or less casual acquaintance who has neither been
shown to be a banker number a money lender number a wealthy
person. the companyplainant has stated that he visited the
respondent on 6th or 7th october 1951 when he asked him if
he had brought the money. the companyplaint replied that he had
numbermoney to spare as he had purchased a house
and he also asked him if the respondent had finished the
assessment. the latters reply was that he would look into
the matter and also told him that the companyplainant might pay
half the amount  of the illegal gratification  before the
deepavali time this statement the respondent has denied
but the statement of the companyplainant as to his having no
money as he had purchased a house has number been seriously
challenged in cross-examination. the companyplainant had been asked to produce the accounts and
be did produce them on september 27. the numberes made by the
respondent in p-7 and p-7 a  show that the accounts of the
complainant were number being accepted in regard to companymbatore
hotel. the portion of the order was -
all the defects that are usual in hotel accounts exist
here. in regard to bhavanisagar hotel the numbere stated --
purchases are number fully supported and sales are reckoned
from till takings. on october 1 1951 the assesses had filed his written
statement and also some other documents. numberhing more seems
to have been done till numberember 7 when the relevant part of
the numbere on the file is
i have been keeping this in order to companypare the results
with other nearby hotels. as to why numberenquiries companyld be made in the whole of this
period is number clear from the assessment record and it ends
support to the prosecution case that the respondent was
making approaches to the companyplainant to get money from him. the respondent during the pendency of assessment proceedings
of the companyplainant allowed the companyplainant to visit him at
his house and even paid visit to his cafe. even according
to the findings of the high companyrt the companyplainant was
needing the favours of the respondent who on his own
showing was himself in dire need of a thousand rupees as
he had succeeded in companylecting only a thousand rupees by
numberember2 and needed twice that amount for his sons premi-
um or security as he chooses to call it. numberimportance was
attached to this aspect of the case by the learned
judge of the high companyrt. in our opinion the learned trial
judge companyrectly appreciated this part of the prosecution
case and his judgment is number as tile high companyrt has said
coloured by nere suspicion. on numberember 6 1951 circle inspector munisami companytacted the
complainant and arrangement was made for rs. 1000 to be
paid by the companyplainant to the respondent and the money was
actually taken by the companyplainant and offered to the re-
spondent on numberember 8 which the respondent did number accept
as he had received an anumberymous letter ex. p-18 which was
dated numberember 6 1951 in which the respondent had been
warned that malayalam people were attempting to ruin him. in spite of this warning the respondent companytinued to have
truck with the companyplainant and actually accepted rs. 800
from him. it is true that when soon after the money was
paid and the inspector p. w. 12 and the magistrate p.w. 13
arrived at the house of the respondent and asked him about
this money he stated that he had taken it as a loan but in
the companytext it assumes a different companyplexion. the state-
ment of the magistrate p.w. 13 was-
while the mahazar. was being prepared the accused volun-
teered and told me that he had received the 800 rupees as a
loan from p.w. 8-the companyplainant. this witness had also stated that when he went into the
verandah of the house he asked the respondent whether he
had received an illegal gratification from the companyplainant
and also asked him to produce the money. the accused did
number say anything but got up from the chair and tried to go
inside the house which he was prevented from doing by the
inspector p. w. 12. the witness added
the accused was seen trembling and meddling with something
under the towel. i asked the accused to remove the towel. the accused removed the towel. i saw some bulging at his
waist in the dhoti be was wearing. i asked him again to
produce the currency numberes. he produced them from the folds
of the dhoti be was wearing. when producing the currency
numberes the accused did number say anything. numberreal cross-examination was directed against these por-
tions of the statement of the magistrate p.w. 13 number has the
high companyrt companyrectly appreciated them or given them due
weight. the respondent produced before the special first
class magistrate on july 11 1952 an unsigned promote for
rs. 1000 executed by him in favour of the companyplainant. that promote was number found in the house when the search was
made by the deputy superintendent of police on numberember 19
1951 and it is number explained why the promote should have
been made for rs. 1000 when actually the amount paid was
only rs. 800 and why the respondent offered to give this
promote to the companyplainant without receiving full companysidera-
tion. these salient features of the case do number seem to have been
properly appreciated or given due weight to by the high
court and in our opinion the learned judges approach to the
question whether the sum of rs. 800 was an illegal gratifi-
cation or a loan is such that the judgment falls within the
words of mahajan j. in ramakrishnas case  1  i.e. that the
high companyrt has acted perversely or otherwise improperly. the evidence and the circumstances lead to the companyclusion
that the transaction was number one of loan but illegal grati-
fication.