2007 (4) TMI 648 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 4A of the U.P. Trade Tax Act for exemption eligibility.
2. Requirement of obtaining ISI mark for exemption under the Cement Control Order, 1995.

Analysis:

Issue 1: The primary issue in this case revolves around the interpretation of section 4A of the U.P. Trade Tax Act for exemption eligibility. The applicant, who established a new unit for cement manufacturing, sought exemption under Notification No. TT-II-780/XI-9(226)/94-U.P. Act-15/48-Order-95. The Divisional Level Committee denied the exemption due to the absence of an ISI mark obtained from the Bureau at the time of the first sale. The Tribunal partially allowed the appeal, granting exemption from the date of the application for the ISI mark. The High Court analyzed previous judgments and emphasized that the exemption under section 4A should be considered within the ambit of the provision, without a mandatory requirement for an ISI mark. The Court held that the denial of exemption based on the absence of an ISI mark was erroneous, as there is no such condition under the Act or related notifications. The Divisional Level Committee and the Tribunal erred in refusing the exemption on this ground.

Issue 2: The second issue pertains to the requirement of obtaining an ISI mark for exemption under the Cement Control Order, 1995. The Standing Counsel argued that cement cannot be sold without an ISI mark, and granting exemption without it would be against public interest. However, the Court clarified that while production and sale without the ISI mark may violate the control order, it does not automatically disqualify the applicant from exemption under section 4A of the Act. The Court highlighted that the Divisional Level Committee and the Tribunal misinterpreted the law by linking the ISI mark requirement to the exemption eligibility under section 4A. Ultimately, the Court allowed the revision, set aside the Tribunal's order, and directed the Divisional Level Committee to grant the exemption from the date of the first sale.

In conclusion, the judgment underscores the importance of interpreting statutory provisions accurately and ensuring that exemption eligibility is determined based on the specific requirements outlined in the law, rather than imposing additional conditions not mandated by the legislation.