TMI Blog2008 (11) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal No. 6709 of 2008 - - - Dated:- 19-11-2008 - SINHA S.B. AND CYRIAC JOSEPH JJ. Sunil Gupta, Senior Advocate (Manoj Kumar Dwivedi and Gunnam Venkateswara Rao, Advocates, with him) for the respondent. Kavin Gulati, Ms. Rashmi Singh, Avinash and T. Mahipal, Advocates, for the appellant. -------------------------------------------------- The judgment of the court was delivered by S.B. SINHA J. Leave granted. Interpretation and/or application of an exemption notification dated July 27, 1991 is in question in this appeal which arises out of a judgment and order dated July 10, 2006 passed by the High Court of Judicature at Allahabad in Trade Tax Revision No. 141 of 1999. The admitted fact of the matter is as under. The appellant is a private limited company registered under the Indian Companies Act, 1956. It started a new unit on plot Nos. C-28 and C-29, Industrial Area. The Uttar Pradesh State Industrial Development Corporation (UPSIDC) on or about March 14, 1991 and July 11, 1991 allotted plot Nos. C-28 and C-29, Industrial Area, Orai, in the district of Jalaun in favour of respondent. An agreement for lease was executed in its favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1948 and the Rules framed thereunder as also the form in which the application for exemption is required to be filed, in their proper perspective, as in terms thereof there was no necessity to supply a copy of the deed of lease, as, admittedly, the land in question has been allotted in favour of the appellant by the UPSIDC, a Corporation of the State of Uttar Pradesh. Alternatively, it was submitted that as the deed of lease was lying with the U.P. State Industrial Development Corporation, which is a Financial Corporation owned by the Government of Uttar Pradesh, the appellant could not file the same within the stipulated period and, thus, the authorities must be held to have acted arbitrarily in reducing the period of exemption from ten years to eight years. Mr. Sunil Gupta, learned senior counsel appearing on behalf of the respondent, on the other hand, would contend that from a bare perusal of the provisions of the Act as also the Rules, it would be evident that when an allotment is followed by a lease for a period of more than five years, it is incumbent for the applicant to supply a copy thereof, failing which the application would be treated to be incomplete, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) in respect of such of those goods only as are manufactured in a new unit, the date of starting production whereof falls on or after the first day of October, 1982; or . . . (d) only if the manufacturer furnishes to the assessing authority an eligibility certificate granted by such officer, in accordance with such procedure, as may be specified; . . . (5) A manufacturer shall be entitled to the facility of exemption from, or reduction in the rate of tax, notified under sub-section (1) (a) if he applies for such facility within six months from the relevant date of commencement of the period of facility referred to in that sub-section or within six months from the date of notification issued under that sub-section or by September 30, 1992, whichever expires later, for the entire period notified under that sub-section; (b) if he applies for such facility later than the date specified in clause (a) only for part of the period notified under sub-section (1); which shall be computed from the date of the application and not from the relevant date of commencement of the period of facility referred to in sub-section (1) till the end of the period of facility; (c) in relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (industry) of the said authority. (b) The General Manager, District Industries Centre or Area Development Officer (Industry) of the concerned Industrial Development Authority may require the unit to furnish any additional information within sixty days of the receipt of an intimation in this regard. (c) If the application is incomplete or does not contain the required information, the unit may be asked to complete the application or furnish the required information within 60 days of the receipt of an intimation in this regard. If the unit fails to complete the application or furnish the required information or the additional information mentioned in clause (b) within the prescribed time, the date on which the application is completed or the information or the additional information is furnished shall be treated as the date of application of such unit." The form prescribed for filing an application for exemption by the new units is prescribed in form XLVI, clause 10 of which reads as under: "10. Title of land or building (a) Self-owner Enclose the attested copy of title deed. (b) Taken on lease Enclose the attested copy of the regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligibility certificate. An eligibility certificate was granted in favour of the appellant by the Additional Director, Industries Jhansi Division, Jhansi, for the period April 16, 1994 to October 23, 2002 by an order dated August 21, 1995, inter alia, on the premise that a copy of the deed of lease was filed by the appellant only on April 16, 1994. The sole question which, thus, arises for our consideration is as to whether in a case where land has been allotted in favour of an industrial undertaking which was followed by execution of the deed of lease, supply of a copy of the letter of allotment should satisfy only the requirements of the statutory provisions or a deed of lease was also required to be produced. Section 4A provides for grant of exemption. Such exemption is to be granted if an application is filed within the period of six months from the date of first sale. If the land in question on which the unit is constructed has been the subject-matter of lease, the applicant was required to file a copy thereof. If the first sale takes place within six months from the date of starting production, the benefit of the exemption shall be given from the date of first sale. Clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ckdrop, the notification dated July 27, 1991 and, in particular, paragraph 2 thereof is required to be construed. The fact that the appellant was entitled to grant of exemption is not in dispute. It is also not in dispute that a statutory corporation has allotted a land in its favour on which the unit was started. It is furthermore not in dispute that the first sale from the said unit had taken place on October 24, 1992 and application in the prescribed form has been filed on March 12, 1993, i.e., within a period of six months therefrom. Section 4A of the Act does not provide for any procedure for filing of an application. The procedures are laid down in the Rules. For the purpose of grant of eligibility certificate, the conditions attached thereto, inter alia, are that an application must be filed in the prescribed form. Such an application is required to be filed in eight copies and indisputably the said condition has been complied with. The power of the General Manager to ask for any additional information within a period of sixty days from the date of receipt of intimation in this behalf is also not in dispute. Clause (c) of sub-rule (1) of rule 25 of the Rules assumes impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cent area of the plot by covering it by roof/permanent shed within the specified period as contained in the licence agreement/lease deed, failing which the allotment of the plot(s) will be cancelled. 6.. It will be your sole responsibility to get NOC from UP/CB (U.P. Pollution Control Board) and if it is not furnished to this Corporation, you will be liable for action according to law and UPSIDC would not be responsible for any of your act for omissions which may be in contravention in the U.P. Pollution Control Board Rules environmental laws." It is true that an instrument of lease was entered into on September 18, 1991 whereby a lease for a term of 90 years was executed on October 28, 1991. It is, however, one thing to say that the order of allotment by a statutory Corporation was followed by execution of a deed of lease but it is another thing to say that only because an order of allotment is followed by execution of a deed of lease, the documents in regard to both were required to be furnished. The eligibility criteria are laid down in the notification, which, as noticed hereinbefore, provide for three contingencies. They are disjunctive in nature and not conjunctive. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Kerala [2007] 2 SCC 725 and Reiz Electrocontrols (P) Ltd. v. Commissioner of Central Excise, Delhi-I [2006] 6 SCC 213 [2007] 8 RC 136.). The learned counsel for the parties, however, have drawn our attention to two decisions of this court construing section 4A of the U.P. Sales Tax Act itself. We, therefore, think it proper to refer thereto. In State Level Committee v. Morgardshammar India Ltd. [1996] 1 SCC 108 [1996] 101 STC 1 (SC), the question which arose for consideration before this court was construction of Explanation (i) to section 4A(2) using both the expressions "already used" and "acquired for use" simultaneously to hold that they should not be considered to be carrying the same meaning, stating: "(5). . . It must be remembered that no unit has a right to claim exemption from tax as a matter of right. His right is only insofar as it is provided by section 4A. While providing for exemption, the Legislature has hedged it with certain conditions. It is not open to the court to ignore those conditions and extend the exemption. . . 11(5). It is suggested by the learned counsel for the respondent that section 4A must be literally (sic liberally) construed to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n merely because the whole of the investment is not in any particular unit. Thus even where the investment is made by the company in more than one unit, so long as the total investment is rupees fifty crores or more, the benefit of the notification would be available. Such benefit would then be distributed in the manner set out in the Schedule depending on where a unit in which expansion, diversification or modernisation has taken place, is situated. Thus, for example, in respect of the units situated in Barabanki and Moradabad, the benefit would be to the extent of 200 per cent of the fixed capital investment in those units, whereas in respect of units in Bijnore the benefit would be to the extent of 150 per cent of the fixed capital investment in that unit. Similarly, the base production and the starting date of production could be in respect of those units. However, it is the company which has made the investment. It is the company which is paying the tax. It is the company which would be getting the benefit of the exemption. The manner in which the company gets the benefit would be as set out hereinabove." We do not see any conflict in the ratio laid down in the aforementio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant is not complete or otherwise required. It is not in dispute that the attested copies of the letters of allotment had been furnished. If the same subserved the statutory requirements, we do not see any reason as to why the appellant should not be held to be entitled to grant of exemption for the entire period of ten years beginning from October 24, 1992 to October 23, 2002. It is not a case where the application was incomplete by itself. It was also not a case where having regard to the provisions of the Act, Rules, notifications as also the information required to be furnished in terms of paragraph 10 of form XLVI, any other or further information was necessary to be obtained or furnished. If the appellant, thus, had fulfilled the eligibility criteria for grant of exemption, it had acquired a right in respect thereof and we see no reason why it should have been deprived therefrom. It is in that sense the exemption notification was required to be construed liberally in favour of the appellant. (See State of Orissa v. Tata Sponge Iron Ltd. [2007] 8 SCC 189 para 21). For the reasons aforementioned, the impugned judgment cannot be sustained. It is set aside accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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