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2019 (11) TMI 5 - HC - VAT and Sales TaxDeprivation of assessee of an eligibility certificate viz-a-viz investment of ₹ 8,13,30,080/- made in diversification of it’s new unit to manufacture monitors - whether the assessee was eligible to exemption a strict rule of interpretation had to be enforced? HELD THAT:- Undisputedly, the assessee did engage in diversification upon establishing manufacturing facility to manufacture refrigerators and PC monitors. No goods similar to those were being manufactured by it, earlier. It also cannot be disputed that the burden to establish that the assesse had made a single diversification to manufacture refrigerators and PC monitors rested on the assessee. It was a special fact in the knowledge of the assessee. Therefore, the burden would remain on the assessee to prove the same and for the revenue authorities to rebut such evidence as the assesse may produce. To that extent, the Tribunal has not erred in its approach. It is here that the Tribunal’s approach is lacking. The Tribunal appears to have completely over-looked the most material part of the evidence relied upon by the assessee. In that, it had relied on the original approval letters issued by the Government of India dated 29.1.1997 and 4.11.1997 wherein it clearly disclosed its intent to set up a unit to manufacture, amongst others, refrigerators and PC monitors. Then the assessee is a public limited company. The contention of the assessee that there was evidence existing on record to establish that the entire diversification exercise to manufacture refrigerators and PC monitors was a single step diversification, is prima facie found to be based on evidence on record before the Tribunal. It is not a case where the assessee may not have led any evidence in support of its case. The observations and conclusions of the Tribunal, to the contrary, are found to be perverse. At present, the entire evidence appears to indicate at least on prima facie basis that the decision to diversify and its implementation was a single effort made by the assesse, which for unexplained reasons, came to be described as joint-venture - However, that word description is of no legal consequence. The Tribunal has misdirected itself in approach and, therefore, its order cannot be sustained. As to what would be the conclusion to be drawn on facts, is not being commented upon in this order. That would remain for the Tribunal to consider and decide on the strength of evidence placed before it. Insofar as the correct approach to be followed, that has been settled above - the question of law remain unanswered.
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