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TMI Blog1999 (2) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 3 or section 3-A, where the State Government is of the opinion that it is necessary so to do for increasing the production of any goods or for promoting the development of industry in the State generally or in any district or parts of districts in particular, it may on application or otherwise, by notification, declare that the turnover of sales in respect of such goods by the manufacturer thereof shall, during such period not exceeding seven years from the date of first sale by such manufacturer 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 starting production, and subject to such conditions, as may be specified, be exempt from sales tax or be liable to tax at such reduced rate as it may fix. Cl. (2)......................" Explanation.-For the purposes of this section,- (1) 'new unit during the period ending with March 31, 1990' means an industrial undertaking set-up by a dealer on or after October 1, 1982 but not later than March 31, 1990,- (a) which is licensed or in respect whereof a letter of intent has been issued or which is registered, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before August 27, 1984 and the capital investment wherein is not less than three lakh rupees, the condition of registration or application for registration under the Factories Act, 1948, shall not apply; (iii) in relation to a new unit whose date of starting production falls before March 6, 1986, the condition regarding lease for a period of not less than seven years shall not apply; (c) the unit in relation to which the application for registration under the Factories Act, 1948 is made on and the registration is granted with effect from, a date later than the date of commencement of the period of facility notified under sub-section (1), shall be deemed to be new unit for entitlement to the facility of exemption from or reduction in the rate of tax notified under sub-section (1) only for part of the period, notified under sub-section (1), be computed from the date from which such registration becomes effective, till the end of the period of such facility." The remaining part of the section is omitted as unnecessary. 2.. The relevant notification prevalent at that time was in the following terms: Notification No. ST-II-604/X-9(208)/1981-U.P. Act XV/48-Order-85, dated 29th Januar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rban), Lakhimpur Kheri, Lalitpur, Lucknow, Meerut, Mirzapur, Muzaffarnagar, Sacharanpur and Varanasi. Three years Five years. Explanation.-For the purposes of this notification- (1) "Industrial unit" means an industrial unit holding permanent registration with the Directorate of Industries, Uttar Pradesh as a small, handloom or handicraft industry or an industrial licence granted by the Iron and Steel Controller or the Textile Commissioner or the Director, Sugar or the Director-General of Technical Development or the Government of India, and- (a) registered under the Indian Factories Act, 1948, or established 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 not exceeding three lakh rupees; or (b) registered under the Indian Factories Act, 1948 or having applied for registration under the said Act and deposited the required fee for the purpose, n the case of units other than those referred to above; (2) 'date of starting production' and 'new unit' shall have the same meaning as assigned to them in the Explanation to section 4-A of the U.P. Sales Tax Act, 1948; and (3) 'c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Rs. 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 August 11, 1989 the unit was not entitled to exemption between the period July 23, 1986 to August 10, 1989, but the total period of four years for which the unit would be entitled to exemption under the relevant notification having expired on August 8, 1989, the unit was not entitled to any exemption beyond July 22, 1986. 5.. Aggrieved by the said order, the respondent filed a review application dated April 16, 1990 which was rejected by order dated July 7, 1990. The said order was challenged by the respondent in a writ petition before the High Court of Judicature at Allahabad. The High Court by its judgment dated November 25, 1992 allowed the writ petition and quashed the impugned order. The concerned authority was directed to modify the eligibility certificate issued to the respondent as one for a period of four years from August 9, 1985. The reasoning of the High Court is that the relevant date for fulfilling the conditions prescribed for grant of exemption is the date from which the unit became eligible in the first in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs from the date of starting production and in other cases from the date following the expiration of six months from the date of starting production subject to the condition that the unit had not discontinued production of such goods for a period exceeding six months at a stretch in any assessment year. Neither the section nor the notification contains any condition that if the capital investment of the unit exceeds Rs. 3 lakhs after the grant of exemption, such exemption would cease to operate unless and until the conditions prescribed for units having capital investment exceeding Rs. 3 lakhs are fulfilled. In the absence of such express provision there is no warrant for the stand taken by the appellant that after July 23, 1986 the unit was not entitled to the benefit of exemption as its capital investment exceeded Rs. 3 lakhs from such date. 7.. According to learned counsel for the appellant, the provisions of an exemption clause should be strictly construed and if the conditions under which exemption was granted stood changed on account of subsequent event, the exemption would not operate. In support of his contention that provision for exemption from payment of tax should be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subsequent legislation could be taken for the purpose of guidance for interpreting the provisions in the Act as it stood earlier. We are unable to accept this contention. It is pointed out by the Court of Appeal in England in Attorney-General v. Clarkson [1900] 1 QB 156 that subsequent legislation may be looked at in order to see the proper construction to be put upon an earlier Act where that earlier Act is ambiguous. Lindley, M.R. said, "Our duty is to interpret the meaning of the Legislature, and if the Legislature in one Act have used language which is admittedly ambiguous, and in a subsequent Act have used language which proceeds upon the hypothesis that a particular interpretation is to be placed upon the earlier Act, I think the Judges have no choice but to read the two Acts together, and say that the Legislature have acted as their own interpreters of the earlier Act". There is no such situation here. The subsequent Act relied on by learned counsel is one of amendment and it may be remedial. Moreover, in this case, there is no ambiguity in the provisions of the Act as it stood at the relevant time warranting an interpretation by the Legislature. Hence the subsequent legi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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