NANAVATI, J. ( 1 ) SAURASHTRA Cement and Chemical Industries Ltd. , has filed this petition as its claim for exemption from levy of electricity duty as contemplated by Sec. 3 (2) (vii) (b) of the Bombay Electricity Duty Act, 1958 with respect to the new machineries and kiln installed by it in the year 1969-70 has been rejected by the authorities. ( 2 ) THE petitioner is a Limited Company engaged in the business of manufacturing portland Cement. It installed a cement manufacturing plant first time in the year 1960. It has capacity of producing 660 M. Tonnes of clinker per day. The petitioner added one more kiln in 1965 and increased its production capacity by 1,000 M. Tonnes. In order to meet with growing demand for cement the petitioner decided to instal one more independent and viable plant capable of producing 1,000 M. Tonnes of clinker per day. Erection of a building for that purpose and installation of machinery was completed by about August, 1969. This time the petitioner installed a new kiln along with separate silos, lepol and nodulizers, coal mill and cement mills. According to the petitioner, this new unit started manufacturing cement on 24-6-1971 incidentally making use of existing idle capacity of crushers, packing machines, coal mill, cranes, raw mill etc. ( 3 ) IT is the case of the petitioner that the machinery and kiln set up and installed in 1969 constitute an independent, self-contained and viable industrial unit for manufacturing cement, and therefore, that unit is a new industrial undertaking as contemplated by Sec. 3 (2) (vii) (b) of the Act. It is also its case that even if it is called an expansion, it was substantial, arid for that reason also it can properly be described as a "new industrial undertaking" and therefore would not be covered by Clause c" of Explanation 1 to Sec. 3 (2) (vii) (b ). ( 4 ) PROCEEDING on that basis, the petitioner made an application on august 4, 19,71, under Sec. 3 (2) (vii) (b) read with Rule 11 of. Bombay electricity Duty (Gujarat) rules, 1968 for obtaining eligibility certificate for exemption from levy of electricity duty. ( 4 ) PROCEEDING on that basis, the petitioner made an application on august 4, 19,71, under Sec. 3 (2) (vii) (b) read with Rule 11 of. Bombay electricity Duty (Gujarat) rules, 1968 for obtaining eligibility certificate for exemption from levy of electricity duty. The Collector of Electricity duty-respondent No. 2 rejected the petitioners application by his reply, dated 16/09/1971 stating therein that a claim for exemption from payment of electricity duty for substantial expansion can only be entertained if the requirements of Government Notification No. GHU-96-1069-4688 (ii)- k, dated 19-9-1969 of Industries Mines AND Power Department, are complied with and that the expansion made by the company cannot be considered as a "new industrial undertaking" as defined by the Act. Aggrieved by that decision the petitioner had filed Special Civil Application No. 120 of 1973 in this Court. The Court directed the State to make a reference under Part iv of the Schedule to the Bombay Electricity Act, 1958 and disposed of the petition in that manner. On 19-10-1974 the State made reference to the statutory authority, i. e. , the second respondent. The second respondent- by his order, dated 29-8-1975 rejected the petitioners claim on the, ground that the petitioner did not, fulfill the conditions laid down in the notification, dated 19-9-1969 and that installation of. new kiln and other machineries did not constitute that establishment a separate industrial undertaking as the petitioner was also making use of existing crushers, belt conveyors, cranes, cement mills and -packing plants. The second respondent also relied upon the statement made by the petitioner in its application made under Rule 11 that the petitioner has made substantial expansion of the existing undertaking It held that installation of the third kiln and other machineries did not amount to establishment of a "new industrial undertaking". Petitioner then filed an appeal before the first respondent-State. By its order. dated 22-3-1978, the State dismissed the said appeal, agreeing with the findings recorded by the "second respondent. ( 5 ) PETITIONER has, therefore, filed this petition under Arts. Petitioner then filed an appeal before the first respondent-State. By its order. dated 22-3-1978, the State dismissed the said appeal, agreeing with the findings recorded by the "second respondent. ( 5 ) PETITIONER has, therefore, filed this petition under Arts. 226 and227 of the: Constitution with a prayer to quash the orders, dated 16-9-1971 29-8-1975 and 22-3-1978 and also to issue a writ of mandamus directing the first and second respondents to issue an eligibility certificate as demanded in its application, dated 4-8-1971 It has also prayed for a declaration that the third undertaking of the petitioner is a new industrial undertaking and therefore exempted from levy of electricity duty under sec. 3 (2) (vii) (b) of the Act. It has also claimed refund of the amount paid by it by, way of electricity duty with respect to the third industrial undertaking with 12% interest. ( 6 ) WHAT is. contended by the learned Advocate for the petitioner is contained, independent and viable, unit. It was established at a substantial cost of Rs. 2. 2 crores. The petitioner installed the new kiln with separate silos, lepol and nodulizers, coal mill and cement mills. Only incidentally it; is making use of existing-idle capacity of crushers, raw; mills, cranes, coal mill, cement mills and packing machineries. Thus, what the petitioner installed in 1969 is a new industrial undertaking and cannot be described as a, mere expansion of the existing undertaking. Necessary avernients to; this effect have been made in the petition. In reply thereto, what is stated by the second respondent in his affidavit is that there were two under takings already in existence and the third one is added with a view to expand the undertaking and business of manufacturing cement. The petitioner did not install other plants and machineries like crusher, cement; mills etc. along with installation of an additional kiln. After, production of clinker further process has to he carried out and that is done by sucb other machines. It is then stated that a kiln by itself cannot work as an independent plant for production of cement though it is, an integral part or component, in the whole-process of manufacture of cement. along with installation of an additional kiln. After, production of clinker further process has to he carried out and that is done by sucb other machines. It is then stated that a kiln by itself cannot work as an independent plant for production of cement though it is, an integral part or component, in the whole-process of manufacture of cement. Even on inspection it was not possible to identify the unit as a separate self-productive viable unit What is required to be onted is that neither in his reply nor in the order Which he had passed in the reference the second respondent has disputed that along with the kiln the petitioner has also" installed separate silos, lepol and nodulizers, coal mill and cement mills. What is asserted is that crushers, cranes, raw-mills, packing machine and old cement mills are also used to complete the process. ( 7 ) IN order to appreciate whether setting up of this new unit amounts to, establishing a new industrial undertaking it is necessary first to under-" stand the process of manufacturing porfland cement. Lime-stone and clay are first crushed into small pieces and brought to raw-mills, where they are,1 mixed in proper proportion and ground into fine powder. The mixture is stored in silos. It is then fed in the form of pellets into the kiln through nodulizers and lepol. There the pellets are heated and converted into a substance known as clinker; This mixture is thereafter taken to the cement mills where the gypsum and clinker are ground together arid reduced to powder form. This powder is sold in the market as Portland cement. Before the raw-material is brought to raw-mills, help of crushers and conveyers is taken. So also after the clinker is manufactured and mixed with gypsum it is lifted by cranes and the rest of the process is completed in cement mills and by a packing plant, ( 8 ) FROM what is stated above it becomes clear that in the beginning and towards the end of the process the petitioner is making use of the old machinery also. The important part of the whole manufacturing process is performed by the new kiln. As pointed out a earlier, the second respondent has, in his reply and the order, merely stated that the petitioner is also making use of the existing crushers, overhead travel cranes, packing plant etc. The important part of the whole manufacturing process is performed by the new kiln. As pointed out a earlier, the second respondent has, in his reply and the order, merely stated that the petitioner is also making use of the existing crushers, overhead travel cranes, packing plant etc. The averments made by the petitioner that a separate building was constructed and a separate kiln with separate silos, lepol and nodulizers and cement mills was installed are not disputed. ( 9 ) WITH this factual background, we have to decide whether the installation of the third kiln and other machineries amounts to establishing a new industrial undertaking or not. So far as the second respondent is concerned, he held that it did not amount to a new industrial undertaking as it was not an independent and full unit for manufacturing cement since it was also making use of old machinery. According to him what has really happened is that production of cement has increased, and thus, it is an expansion of the industrial undertaking and its business. The first respondent after posing the question whether the installation of third kiln alongwith others constitute establishment of new industrial undertaking or not misguided itself by referring to Government notification, dated 19-9-1969 issued under sub-sec. (3) of Sec. 3 of the Act for the purpose of granting remission of electricity duty. On the basis of that notification, it came to the conclusion that it amounted to industrial expansion but did not constitute a new industrial undertaking. Though both the authorities have recorded a concurrent finding, it cannot be accepted as it is based upon a wrong approach and misconception of correct legal position. ( 10 ) THE Act has been enacted to provide for the levy of a duty on consumption of electrical energy. Sub-sec. (1) of Sec. 3 provides for levy of duty, but it is made subject to the provisions of sub-sees. (2) and (3 ). Sub-sec. (2), inter alia, provides that electricity duty shall not be leviable on the units of energy consumed by certain types of consumers specified1 therein. Sub-sec. (3) empowers the State Government to reduce the rate of duty or remit duty in respect of certain processes carried out by the industrial undertaking or such class of consumers, or such class of premises in such areas and for such period, as the State Government may specify. Sub-sec. (3) empowers the State Government to reduce the rate of duty or remit duty in respect of certain processes carried out by the industrial undertaking or such class of consumers, or such class of premises in such areas and for such period, as the State Government may specify. In this case, we are not concerned with reduction or remission of duty as the petitioner is not claiming any such benefits. We have referred to that provision because the respondents have mixed up the conditions specified by the Government for granting remission with the claim made by the petitioner while rejecting its claim. ( 11 ) THE provision which is relevant for the purpose of this petition is sec. 3 (2) (vii), and it reads as under :"3. (2) Electricity duty shall not be leviable on the units of energy consumed. ( 11 ) THE provision which is relevant for the purpose of this petition is sec. 3 (2) (vii), and it reads as under :"3. (2) Electricity duty shall not be leviable on the units of energy consumed. xxx xxx xxx (vii) for motive power and lighting in respecf of premises used by an industrial undertaking for industrial purpose, until the expiry of the following period, that is to say ; (a) in the case of an industrial undertaking which generates energy for its own, use, ten years from the date of the commencement of the Bombay Electricity Duty (Gujarat Second Amendment) Act, 1961 (hereinafter referred to as "the commencement date") or the date of starting the generation of such energy, whichever is later; (b) in the case of a new industrial undertaking established on or after 1/05/1960, which does not generate energy for its own use, five years from the commencement date or the date on which the industrial undertaking commences for the first time manufacture or production of goods, whichever is later:; provided that no industrial undertaking shall be entitled to exemption from payment of Electricity duty under this clause, unless it has obtained a certificate regarding eligibility for such exemption in prescribed form by making an application therefor in prescribed form and within prescribed period to such officer as the State Government may, by notification in Official Gazette, specify explanation 1 :- For the purposes of clause (vii) - (i) "an industrial undertaking" means an industrial undertaking which manufactures or produces goods for sale or use in the manufacture or production of other goods but does not include an undertaking which manufactures or produces any kind of food and drinks, meant ordinarily for consumption on the premises of the undertaking; and (ii)"a new industrial undertaking" means any such industrial undertaking which - (a) is not formed by the splitting up or the reconstruction of a business or undertaking already in existence in the State; or (b) is not formed by transfer to a new business or undertaking of a building, machinery or plant previously used in the State for any industrial purpose, of such value in relation to that investments, as the State Government may, by notification in the Official Gazette, specify; or (c) is not an expansion of the existing business or undertaking in the State. Explanation 2 :- For the purpose of Explanation 1, "premises of the undertaking" includes all premises which are intended for being used for consumption of food and drinks. " ( 12 ) BEFORE it was amended in 1968, it read as under :" (2) Electricity duty shall not be leviable on the units of energy consumed: (vii) by an industrial undertaking (other than an industrial undertaking to which sub-sec. (3) applies) until the expiry of the following period, that is to say : (a) xxx xxx xxx xxx (b) in the case of an undertaking established on or after the 1/05/1960 which does not generate energy for its own use, five years from the commencement date or the date on which the undertaking commences manufacture of goods, whichever is later. " ( 13 ) COMPARISON of unamended and amended clause shows that amended clause is more elaborate and contemplates a new industrial undertaking whereas previously the clause contemplated merely, an undertaking. By way of an explanation the expressions industrial undertaking and new industrial undertaking are now given a statutory meaning for the purpose of clause (vii ). This amended provision was again amended in 1979 and 1983. Though we are not concerned with the said amendments, we are briefly referring to them only for the purpose of pointing out the subsequent changes. By the amendment made in 1979, the definition contained in the explanation is made applicable for the purpose of sub-sec. (2a) of sec. 3 also. By the amendment of 1983, definition of industrial undertaking has been deleted from the explanation and now we find a general definition of that explanation in Sec. 2 (bb ). ( 14 ) THE dispute which has arisen in this case is mainly because of the statutory definition of the expression a new industrial undertaking. If the issue involved was to be decided under the unamended provision, then in view of the decision of this Court in S. C. A. 1077 of 1967, we would have decided the same in favour of the petitioner. What we have now to decide is whether because of the special definition of new industrial undertaking what the petitioner has done can be said to be an expansion of business of the existing undertaking or establishment of a new industrial undertaking. What we have now to decide is whether because of the special definition of new industrial undertaking what the petitioner has done can be said to be an expansion of business of the existing undertaking or establishment of a new industrial undertaking. This Court in the said decision did refer to the amended provision, but did not examine the aspect which we are required to consider, as it was not necessary for it to do so. However, the said decision is still helpful inasmuch as it has pointed out what is meant by an undertaking. This Court negatived the contention that Sec. 3 (2) (vii) (b) contemplates a totally new venture by which all the steps necessary for setting up a factory or business are simultaneously undertaken. If it is found that with a view to extend the existing business or industry a self-contained unit or plant is installed, then such a unit or plant may under the circumstances of the case, constitute an undertaking contemplated by clause (vii) (b) of Sec. 3 (2) of the Act. This Court further held that it is undoubtedly true that every expansion of an existing industry may not amount to an undertaking as contemplated by the Act. If the expansion is by way of a totally new factory or new organisation, management, establishment, assets and machinery, then such expansion would certainly constitute a new undertaking. If the expansion is by way of addition to an existing plant and machinery, then a question may arise whether the addition of a new unit or plant makes any substantial change in the industrial complex. This Court then pointed out some salient features which would help in deciding when addition of a plant amounts to a new undertaking. They are as under : (a) The propertionate out-lay of expenditure which is involved in the installation of the new unit in question. (b) The role which this new unit or plant plays in the process of manufacture. (c) The contribution which the new unit or plant is likely to make in the total production of the factory. (d) The nature of the dependence of the new plant on the existing machinery, and (e) The purpose for which an "undertaking" is to be treated as a new"undertaking" by the statute. (c) The contribution which the new unit or plant is likely to make in the total production of the factory. (d) The nature of the dependence of the new plant on the existing machinery, and (e) The purpose for which an "undertaking" is to be treated as a new"undertaking" by the statute. Applying the test, this Court in that case observed that installation of a new kiln amounted to a new undertaking as it was more or less selfcontained and took the help of the existing plant and machinery only incidentally. In this connection, it will be interesting to note that Sec. 18 of the Industries (Development and Regulation) Act, 1961 contains an explanation which defines substantial expansion to mean the expansion of an existing industrial undertaking which substantially increases the productive capacity of the undertaking, or which is of such a nature as to amount virtually to a new industrial undertaking but does not include any such expansion as is normal to the undertaking having regard to its nature and circumstances relating to such expansion. After referring to that provision and after taking note of the principle that a definition which is meant for the purpose of a different Act cannot apply to an undertaking as contemplated by Sees. 3 (2) (vii) (b) of the Act, this Court in that case observed that substantial expansion can be regarded as a new industrial undertaking. Though we are aware that the amended provision has its own definition of the expression new industrial undertaking we are referring to these observations for the purpose of understanding the true meaning and connotation of the word undertaking. ( 15 ) THE contention of the respondents is that what the petitioner has done is an expansion of its existing business and that cannot be regarded as establishment of a new industrial undertaking. It is also submitted that the word expansion has a very wide meaning and there is no reason why it should not be literally construed. It was submitted that if word expansion is literally construed, then additions made by the petitioner should be regarded as expansion eventhough it is of substantial nature. It was also submitted that if for expanding the existing business the industrial undertaking employs more than 100% capital then only if becomes entitled to remission in view of the notification issued under sec. 3 (2) of the Act. It was also submitted that if for expanding the existing business the industrial undertaking employs more than 100% capital then only if becomes entitled to remission in view of the notification issued under sec. 3 (2) of the Act. Therefore, the answer to the question raised before us depends upon true interpretation of the word expansion as used in clause (ii) (c) of the Explanation to Sec. 3 (2) (vii ). ( 16 ) AS stated earlier, sub-sec. (2) of Sec. 3 provides for exemption from payment of electricity duty. It appears that the Gujarat Legislature amended sub-sec. (2) of Sec. 3 in 1961, providing for more exemptions with a view to see that in the new State of Gujarat, new industrial units were set up with a view to accelerate the industrial growth of the new state. The benefit of exemptions was intended to be given to new industrial undertakings. It also appears that some old entrepreneurs by mere manipulation were making a show that expansion made by them was equal to establishment of new industrial undertakings and they were thus entitled to claim exemption under Sec. 3 (2) (vii) of the Act. Therefore, in order to clarify the position, the Legislature again amended Sec. 3 (2) (vii) in 1968. As pointed out in the Statement of Object and Reasons of the Amending Act No. 20 of 1968, the amendment in clause (vii) has been made with a view to clarify that a new industrial undertaking established on or after 1/05/1960, which is entitled to exemption under this clause, shall not cover an undertaking formed by splitting up or the reconstruction of a business or undertaking already in existence in the State, or by transfer to a new business or undertaking of a building, machinery or plant previously used, or by expanding the existing business or undertaking in the State. The Explanation to Sec. 3 (2) (vii) has thus been added with a view to achieve that object and clarifying the correct position of law. The legislature did not intend, by inserting the Explanation, to take away the benefits which were available to new industrial undertakings. The Explanation to Sec. 3 (2) (vii) has thus been added with a view to achieve that object and clarifying the correct position of law. The legislature did not intend, by inserting the Explanation, to take away the benefits which were available to new industrial undertakings. ( 17 ) IT was submitted by the learned Advocate for the petitioner that even the State Government understood the provision in that manner as is evident from the fact that in the prescribed form for making an application for exemption, there is a head under which the applicant is required to furnish information as to whether it is an expansion of the existing business or undertaking. If expansion of existing business or undertaking was in no case to be considered as establishment of a new industrial undertaking, we would not have found such a head in the prescribed form. In our opinion, understanding of the State Government of the correct legal effect of the explanation, while framing the Rules, cannot be regarded as a good aid for the purpose of interpreting the words, "expansion of the existing business or undertaking". It cannot be considered as relevant for finding out the real intention of the Legislature, nor was it proper for the second respondent to refer to and rely upon the said statement in the application form for coming to the conclusion that what the petitioner had done was mere expansion of its existing business or undertaking. ( 18 ) IN our opinion, the phrase "not an expansion of the existing business or undertaking" will have to be construed consistently with. the object of the main provision. If the Legislature had intended to grant an exemption to an industrial undertaking to be newly set up or formed, then it would have defined the expression "new industrial undertaking" in a different and simpler way. Moreover, words used in a Statute concerning trade, commerce and/or industry need not always be construed literally and in our opinion, the correct approach should be to give them a purposeful interpretation. If we interprete the word "expansion" in its literal sense, as contended by the respondents, then, in that case, we would be denying the benefit which was intended to be given to a person setting up virtually a new industrial undertaking and thus frustrating the purpose or object of the provision. If we interprete the word "expansion" in its literal sense, as contended by the respondents, then, in that case, we would be denying the benefit which was intended to be given to a person setting up virtually a new industrial undertaking and thus frustrating the purpose or object of the provision. Because a person having one factory at one place and setting up a new factory at a different place with a new building, new plant or machinery etc. can still be said to have expanded his business or undertaking. But that does not appear to be the sense in which the Legislature has used that phrase. The intention was to deny benefit of the exemption to those industrial undertakings which, without setting up new and more or less independent and complete units and by merely adding some machines or plants to the existing units and still remaining substantially dependent upon the old unit for completion of the manufacturing process, wanted to claim such benefit. We see no reason why setting up a new unit with a new building and a new plant involving huge outlay of expenditure and which substantially increases the production should not be regarded as a new industrial undertaking, merely because it is either set up in the same premises where the sold unit is located, of" as connected with the old unit for certain incidental or ancilliary purposes, or for making use of idle capacity of machineries meant for such purposes. We are, therefore, of the opinion that the word "expansion" contemplated by Explanation to Sec. 3 (2) (vii) (b) means usual or normal expansion, even though it may be substantial, but which is not such as to make the addition an almost independent unit and, in that way, virtually a new undertaking as ordinarily understood. ( 19 ) WE therefore hold that both the authorities namely the Collector and the State Government were not right in giving narrow meaning to the expression "expansion of the existing business or undertaking" and in holding that the petitioner, by installing a new kiln and other machineries, merely expanded its business of manufacturing cement and did not set up a new industry as contemplated by Sec. 3 (2) (vii) (b ). Therefore, the orders passed by them are required to be set aside and it will have to be held that the petitioner having established a new industrial undertaking was entitled to benefit of exemption from payment of electricity duty under Sec. 3 (2) (vii) (b) of the Act. ( 20 ) IN the result, this petition is allowed. The impugned orders at exhs. f, g and i are quashed and set aside and it is declared that the petitioner by installing new kiln and other machineries in the year 1969 had set up a new industrial undertaking and thus was entitled to exemption from payment of Electricity duty under Sec. 3 (2) of the Act. The respondents are also directed to refund the amount of Electricity duty with 6% per annum, if it has been recovered on the basis that the petitioner was not entitled to exemption under Sec. 3 (2) (vii) (b ). Rule is made absolute accordingly with no order as to costs. .