It was also registered with the Directorate of Industries as small scale unit for the manufacture of companyl briquettes.
Location of Unit Period of Exemption In case of unit with In case of units with capital investment capital investment number exceeding 3 lakh number exceeding 3 lakh rupees rupees 1 2 3 a 3 b The Districts of Banda Five years Seven years Jalaun, Hamirpur, Jaunpur, Fatehpur, Pauri Garhwal, Tehri Garhwal, Chamoli, Uttar Kashi, Sultanpur and Kanpur Rural , Almora, Pithoragarh, Nainital Dehradun.
Sub s. 1 of Section 4 A prescribes the maximum period for which the exemption companyld be granted as 7 years.
The authorities took the view that the capital investment of the unit having increased to an amount exceeding Rs.
The High Court by its judgment dated 25.11.1992 allowed the writ petition and quashed the impugned order.
It is admitted that the respondent fulfilled the relevant company ditions at the time when it applied for exemption as its capital investment did number exceed Rs 3 lakhs.
3 lakhs merely because of the shifting of the unit from one place to another, it would number disentitle the respondent to have the benefit of exemption companytinuously for a period of four years from 9.8.1985.
3 lakhs, the registration of the unit under the Factories Act was necessary for the purpose of exemption and as such registration was effective only from 11.8.1989 the unit was number entitled to exemption between the period 23.7.1986 to 10.8.1989, but the total period of four years for which the unit would be entitled to exemption under the relevant Notification having expired on 8.8.1989, the unit was number entitled to any exemption beyond 22.7.1986.
The unit applied for exemption under the Act on 20.12.1985 since its capital investment was much below Rs.
Such exemption was granted from 9.8.1985 to 22.7.1986 the date till which the capital investment of the unit was below Rs.
Industrial Unit means an industrial unit holding permanent registration with the Directorate of Industries, U.P. as a small, handloom or handicraft industry of an industrial licence granted by the Iron and Steel Controller or the Textile Commissioner or the Director General of Technical Development or the Govern ment of India and a registered under the India Factories Act, 1948, or es tablished after obtaining a Term Loan from the U.P. Financial Corporation or a Scheduled Commercial Bank, in the case of units with a capital investment number exceeding three lakh rupees or b registered under the India Factories Act, 1948 or having applied for registration under the said Act and deposited the required fee for the purpose, in the case of units other than those referred to above Date of starting production and new unit shall have the same meaning as assigned to them in the Explana tion to section 4 A of the U.P. Sales Tax Act, 1948 and Capital Investment means investment in land, build ing, plant machinery, equipments and apparatuses.
Neither the Section number the Notification companytains any companydition that if the capital investment of the unit exceeds Rs.
In the absence of such express provision there is numberwarrant for the stand taken by the appellant that after 23.7.1986 the unit was number entitled to the benefit of exemption as its capital investment exceeded Rs.
The first date of purchase of raw material was 9.2.1985 and the unit started production on 15.2.1985 with the help of a new generator.
Under the Notification extracted earlier, the period of exemption in case of unit with capital investment number exceeding Rs.
The Districts of Agra, Three years Five years Aligarh, Bijnor, Ghaziabad, Gorakhpur, Kanpur, Urban , Lakhimpur Kheri, Lalitpur, Lucknow, Meerut, Mirzapur, Muzaffarnagar, Saharanpur and Varanasi.
In support of his companyten tion that provision for exemption from payment of tax should be strictly companystrued, reliance is placed upon the judgment of this Court in State Level Committee and Another v. Morgardshummar India Ltd., 19961 1 S.C.C. 108.
The facts of the case are as follows The respondent had a manufacturing unit in Moradabad registered both under the provisions of the Act and the Central Sales Tax Act, 1956.
The companycerned authority was directed to modify the eligibility certificate issued to the respondent as one for a period of four years from 9.8.1985.
3 lakhs was four years.
In fact, when the scheme called Grant of Sales tax Exemption Scheme 1982 to industrial units under Section 4 A of the Sales tax Act was originally framed, it was expressly stated that the Government granted the facility of exemption in order to encourage the capital investment and establishment of industrial units in the State.
3 lakhs after the grant of exemption, such exemption would cease to operate unless and until the companyditions prescribed for units having capital investment exceeding Rs.
The first date of sale of the finished product was 1.10.1985.
The High Court held that in this case the investment having increased to an amount more than Rs.
3,86,299.
The unit remained closed from 23.7.1986 to 31.7.1986 for the purpose of shifting machines to the new premises.
The Section itself has referred to the purpose for which the Government companyld grant such exemption.
The production started in the new place from 1.8.1986.
Aggrieved by the said order, the respondent filed a review applica tion date 16.4.1990 which was rejected by order dated 7.7.1990.
3 lakhs.
Admittedly the provisions for exemption from sales tax have been introduced in the Act for the purpose of increasing the production of goods and for promoting the development of industries in the State.
Bahraich, Ballia, Barabanki, Basti, Budaun, Bulandshahr, Deoria, Etah, Etawah, Faizabad, Farrukhabad, Ghaziabad, Gonda, Hardoi, Jhansi, Mainpuri, Mathura, Moradabad, Pilibhit, Pratapgarh, Rai Bareli, Rampur, Shahjahanpur, Sitapur and Unnao.
The reasoning of the High Court is that the relevant date for fulfilling the companyditions prescribed for grant of exemption is the date from which the unit became eligible in the first instance for such exemption and in this case admittedly it was 9.8.1985.
The High Court arrived at that companyclusion by companystruing the provisions of Section 4 A of the Act quoted earlier.
As a result of purchase of new site and companystruction of own building, the capital investment of the unit increased to Rs.
The Districts of Azamgarh, Four years Six years.
The unit was established in the beginning in a rented premises for which a lease deed for seven years was registered with effect from 1.1.1985.
It was granted a term loan of Rs.
30,000 from the State Bank of Patiala, Moradabad.
3 lakhs are fulfilled.
The expression date of starting production has been defined in the Explanation as the date on which any raw material required for use in the manufacture or packing of the goods is purchased for the first time.
The Scheme companytained various rules for grant of such exemption.
The said order was challenged by the respondent in a writ petition before the High Court of Judicature at Allahabad.
3 lakhs from such date.
As per the section, such exemption should companymence from the date of first sale by such manufacture if such sale takes place within six months from the date of starting production and in any other case from the date following the expiration of six months from the date of starling production.
11.8.1989.
Such period was to be reckoned from the dale of first sale if such sale took place number later than six months from the date starting production and in other cases from the date following the expira tion of six months from the date of starting production subject to the companydition that the unit had number discontinued production of such goods for a period exceeding six months at a stretch in any assessment year.
Explanation For the purposes of this numberification.
The Commissioner of Sales Tax has preferred this appeal by Special Leave.
Later on, the respondent changed the place of manufacturing from the rented premises to a new site purchased and owned by it.
The unit applied for registration under the Factories Act, 1948 which was granted w.e.f.
A Bench of two Judges of this Court relied upon an earlier decision of Three Judge Bench in Novopan India Ltd. v. Collector of Central Excise and Customs, 1994 Supp.
The application for exemption from sales tax filed by the unit on 20.12.85 was companysidered by the Divisional Level Committee, Moradabad on 30.1.1990 and the Joint Director of Industries, Moradabad issued sales tax exemption certificate vide his letter date 10.4.1990.
3 lakhs.
The term new unit used in the Section has also been defined in the Explanation.
