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2020 ] PRINCE SPINTEX PVT. LTD. v. UNION OF INDIA 267
in the Finance Department which notification is issued to carry out the ob-
jectives and the policy decisions taken in the Industrial Policy itself. In this
view of the matter, any notification issued by the Government Order in ex-
ercise of power under Section 7 of the Bihar Finance Act, if is found to be
repugnant to the Industrial Policy declared in a government resolution,
then the said notification must be held to be bad to that extent. In the case
in hand, the notification issued by the State Government on 4-4-1994 has
been examined by the High Court and has been found, rightly, to be contra-
ry to the Industrial Incentive Policy, more particularly the Policy engrafted
in Clause 10.4(i)(b). Consequently, the High Court was fully justified in
striking down that part of the notification which is repugnant to sub-clause
(b) of Clause 10.4(i) and we do not find any error committed by the High
Court in striking down the said notification. We are not persuaded to ac-
cept the contention of Mr. Dwivedi that it would be open for the Govern-
ment to issue a notification in exercise of power under Section 7 of the Bihar
Finance Act, which may over-ride the incentive policy itself. In our consid-
ered opinion the expression “such conditions and restrictions as it may im-
pose” in sub-section (3) of Section 7 of the Bihar Finance Act will not au-
thorise the State Government to negate the incentives and benefits which
any industrial unit would be otherwise entitled to under the general Policy
Resolution itself. In this view of the matter, we see no illegality with the
impugned judgment of the High Court in striking down a part of the notifi-
cation dated 4-4-1994.”
3.4 Reliance was also placed upon the decision of the Supreme Court in
State of Jharkhand v. Tata Cummins Ltd., (2006) 4 SCC 57, wherein it was held
thus :-
“16. Before analysing the above policy read with the notifications, it is
important to bear in mind the connotation of the word “tax”. A tax is a
payment for raising general revenue. It is a burden. It is based on the prin-
ciple of ability or capacity to pay. It is a manifestation of the taxing power
of the State. An exemption from payment of tax under an enactment is an
exemption from the tax liability. Therefore, every such exemption notifica-
tion has to be read strictly. However, when an assessee is promised with a
tax exemption for setting up an industry in the backward area as a term of
the industrial policy, we have to read the implementing notifications in the
context of the Industrial Policy. In such a case, the exemption notifications
have to be read liberally keeping in mind the objects envisaged by the In-
dustrial Policy and not in a strict sense as in the case of exemptions from tax
liability under the taxing statute.”
3.5 Reference was made to the decision of the Supreme Court in the
case of W.P.I.L. Ltd. v. Commissioner of Central Excise, Meerut, UP, 2005 (181) E.L.T.
359 (S.C.) = (2005) 3 SCC 73, wherein the Court held thus :-
“14. In our opinion, therefore, the authorities were in error in upholding
the demand and in directing the appellant to pay excise duty.
15. The Learned Counsel for the appellant is also right in relying upon a
decision of this Court in Collector of Central Excise, Shillong v. Wood Craft
Products Ltd., (1995) 3 SCC 454. In that case, this Court held that a clarifica-
tory notification would take effect retrospectively. Such a notification mere-
ly clarifies the position and makes explicit what was implicit. Clarificatory
notifications have been issued to end the dispute between the parties.
16. In view of the consistent policy of the Government of exempting parts
of power driven pumps utilized by the factory within the factory premises,
it could not be said that while issuing Notification No. 46/94 of March 1,

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