9911796707
TMI Blog1991 (8) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... 1954 (hereinafter called "the 1954 Act"). 2.. The applicant is Rajendra Kumar Das, carrying on business under the trade name and style of Messrs. Otto Cart Manufacturing Company at village Panskura, Domjur, Howrah. 3.. The case of the applicant may be briefly stated as follows: Messrs. Otto Cart Manufacturing Company is a proprietary firm carrying on business of manufacturing motor vehicle trailers at its factory situated at Domjur, Howrah. The said factory was set up in the year 1985 with new plant and machinery; production started on and from October, 1985 and the first sale of manufactured goods took place on October 4, 1985. The applicant is a registered dealer under the 1954 Act as a manufacturer of motor vehicle trailers. The appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant's factory) and which had enjoyed tax holiday during the period July 13, 1981 to April 9, 1986. Messrs. Eastern Trailers Private Limited was previously a partnership firm and subsequently converted into a limited company in which the applicant is a director. The limited company has been separately registered as a dealer as well as a small-scale industrial unit. The applicant, therefore, claimed that the industrial unit set up by him could not be treated as a second unit and was, therefore, entitled to tax holiday under the existing notification. 5.. Let us now consider the grounds on which the application for eligibility certificate has been rejected by the respondents. The Assistant Commissioner in his order dated February 24, 1989 ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ler has made an attempt to avail himself of the tax exemption facility "by opening a second unit of the same nature which he had earlier though with slight modification". He further observed that "the motive behind opening the second unit though with full sanction of law does not show any sign of entrepreneurship in the venture but to avail the facility of exemption himself from payment of tax". He further observed that there is a gradual fall in sales and payment of tax by Messrs. Eastern Trailers after March 31, 1986, thereby suggesting that the dealer's intention was to divert his sales through this dummy newly set up unit and to continue to enjoy the benefit of exemption by adopting this method. 7. We shall now examine, in the light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial unit had no business connection with it and the said unit was not a second unit but a new one and that there was no bar if the director of a company sets up another industrial unit on his own account. This was, according to him, an extraneous consideration for which grant of eligibility certificate could not be refused. 10.. Mr. D. Majumdar, the learned State Representative, did not accept this position. He argued that the application of the dealer had been refused on numerous grounds as set out by the Assistant Commissioner in his order and subsequently accepted by the Additional Commissioner, who in his turn added another ground on his own. He submitted that it is not correct to say that the Additional Commissioner did not atta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividual is a legal entity and a dealer different from the company of which he is a director. The ground, therefore, is not sustainable. 12.. In view of these reasons, the applicant is entitled to the grant of eligibility certificate. The impugned orders of the Assistant Commissioner and Additional Commissioner are, therefore, set aside, with the direction upon the Assistant Commissioner to issue eligibility certificate to the applicant. Interim order is vacated and the assessment for the period February 18, 1986 to June 30, 1986, if made, should be revised in terms of this order. 13.. In the result, the application is allowed on contest. There will be no order for costs. S.P. DAS GHOSH (Chairman).-I agree. L.N. RAY (Judicial Member).-I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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