TMI Blog2014 (6) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... te as a consequence of setting up of such unit. Decisions shall be taken on the basis of location of the unit, employment potential and the possibilities of down stream projects, apart from the contribution to the general economic development of that area. From the aforesaid, it is clear that it was only a proposal and the facility would be provided on a case to case basis depending upon various circumstances. It does not provide exemption itself. Having regard to such policy, the State Government issued notification providing exemption. Such exemption cannot be said to be, not in consonance with the Industrial Policy inasmuch as it is always open to the State Government while issuing the notification relating to exemption to examine that how much exemption is to be granted. The U.P. Industrial Policy, 1994 on which much emphasis has been placed is not an Industrial Policy, issued by the State Government and approved by the Cabinet itself. Under the said policy, no specific exemption has been provided. A Special Incentive to Large Industrial Unit has only been proposed to be granted on a case to case basis depending upon various factors inasmuch as there is nothing in the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19.7.1996 under the Diversification Scheme. The copy of the exemption application has not been annexed along with the writ petition, however, the same has been provided by Sri C.B. Tripathi, learned Special Counsel for the State of U.P. during the course of argument and the same is being kept on record. The exemption application has been processed and an Eligibility Certificate was issued on 17.6.1999. Under the Eligibility Certificate, the petitioner had been granted exemption under the Notification Nos. T.T.-2-1711/xI-9(460)/94-U.P. Act 15-48 Order 96 dated 19.7.1996 and T.T.-2-1712 dated 19.7.1996 to the extent of 100% on the capital investment made upto 31.3.1998 i.e. on Rs. 96,41,67,155/- for the period 13.2.1998 to 12.2.2006, which ever has expired earlier with the further condition that in the last four years the petitioner may be entitled for exemption on the additional capital investment on the application being made. The petitioner started availing exemption under the said Eligibility Certificate. However, filed the present writ petition on 23.10.2007. When the period of exemption has expired on 22.2.2007, however, the Notification nos. 1711 and 1712 had been amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo wheelers, a special notification had been issued on 19.7.1996 providing exemption to the manufactures of the new units and to the units undergone for expansion, diversification or modernisation having fixed capital investment of Rs.50 crores or more. In this notification, the exemption not exceeding the amount fixed capital investment is provided. It further provides exemption on the further investment in addition to fixed capital investment in an assessment year to that extent. Sub-clause (ii) of Clause 4 provides that the facility of exemption of tax under this notification shall not simultaneously be available to a unit availing any tax facility under any other notification issued under section 4-A of the Act. The petitioner after making the capital investment of Rs.94 crores and odds upto 31.3.1998 had moved an application on 13.8.1998, claimed exemption under the Notification dated 19.7.1996 under the Diversification Scheme. On consideration of the application, the Eligibility Certificate has been issued on 19.6.1999 granting exemption under the Notification Nos. 1711 and 1712 dated 19.7.1996, both, under the U.P. Trade Tax Act and under the Central Sales Tax Act on capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansion, diversification or modernisation during the period 1.12.1994 to 31.3.2000. In this notification also, the percentage of exemption and the period of exemption has been provided having regard to the location of the area. When the application was moved in the year 1998, all the three Notifications, namely, Notification No. TT-2-780/XI-9(226)/94-U.P. Act-15/48-Order-95, dated 31.3.1995, Notification Nos. T.T.-2-1711/xI-9(460)/94-U.P. Act 15-48 Order 96 dated 19.7.1996 and Notification No. TT-2-640/XI-9(640)/94-Act-15-48-Order-97 dated 21.2.1997 were available, but the petitioner preferred to seek exemption under the Notification No. 1711, dated 19.7.1996, which is specifically for two wheeler automobiles and provides certain other benefits which were not available to other units under the Notification dated 31.3.1995 and Notification dated 21.2.1997. On consideration of the application, Eligibility Certificate has been issued, therefore, the claim of the petitioner that exemption of 200% should be granted, has no substance. He submitted that the decision of the Apex Court in the case of State of Bihar and others vs. M/s. Suprabhat Steel Limited and others (supra) relied upon by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such notification and where no date is so specified 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 exempted from trade tax on sale of goods] whether wholly or partly or be liable to tax at such reduced rate as it may fix : [Provided that no exemption shall be granted where the facility of concession or exemption has been availed under section 4-AAA.] (2) It shall be lawful for the State Government to specify in the notification under sub-section (1) that the exemption from, or reduction in the rate of tax, shall be admissible (a) generally in respect of all such goods manufactured subsequent to the date of such notification; or (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 and in either case [(bb)] in respect of those finished goods which are manufactured in a unit which has undertaken backward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment of fifty crore rupees or more as also to units which may make additional fixed capital investment of fifty crore rupees or more in expansion, diversification, or modernisation of the existing unit engaged in the manufacture of two wheeler automobiles in the State. 2. Now, therefore, in exercise of powers under section 4-A of the Uttar Pradesh Trade Tax Act, 1948 (UP Act No XV of 1948), hereinafter referred to as the Act, the Governor is pleased to declare that the turnover of sales in respect of two wheeler automobiles by the manufacturers thereof shall subject to be conditions and restrictions specified hereafter in this notification be exempt from payment of tax. 3. No tax shall be payable in respect of turnover of sales of such goods. (1) If such goods are manufactured by such a new unit as has fixed capital investment of fifty crore rupees or more and as fulfil the conditions specified in this notification. (2) If such goods are produced in excess of base production by an existing unit under foreign collaboration approved by the Government of India or any authority designated by it and making additional fixed capital investment of atleast twenty-five per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit under section 4-A of the Act. (vi) that the total amount of tax exemption under the Act as also under the Central Sales Tax Act, 1956 (Act No. 74 of 1956) shall not exceed the amount of fixed capital investment of the unit made during the period referred to in paragraph 3 of this notification but the amount of tax exemption under both the aforesaid Acts upto the end of any assessment year shall not exceed the additional fixed capital investment made upto the end of that year. (vii) that the facility of exemption from tax shall be available only for a period of eight years to be reckoned. (a) in the case of a unit falling under sub-paragraph (1) of Paragraph 3 from the date of the first sale or the date following the exemption of six months from the date of starting production, whichever is earlier. (b) in other cases from the first date of production- (i) of goods manufactured by a unit under new foreign collaboration approve by the Government of India or any authority designated by it for the purpose after December 1, 1994; (ii) of goods of a nature different from those manufactured earlier by the unit if it be a case of diversification; and (iii) of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modernisation wherein the production had been started after 1.12.1994 to 31.3.2000. This notification was also almost in terms of the notification dated 31.3.1995. The petitioner had entered into an agreement with New Foreign Collaboration agreement and made an investment upto 31.3.1998 to the extent of Rs.94 crores and odds for the manufacturing of 4 Stroke two wheeler motorcycles. The production had been started on 13.2.1998. The petitioner moved an application claiming exemption under the Diversification Scheme under the notification dated 19.7.1996. The copy of the application has not been annexed along with the writ petition, but the same has been provided by Sri C.B. Tripathi, learned Special Counsel for the State of U.P. and is made part of the record. When the petitioner moved the application in August, 1998, all the three notifications, namely, Notification No. TT-2-780/XI-9(226)/94-U.P.Act-15/48-Order-95, dated 31.3.1995, Notification Nos. T.T.-2-1711/xI-9(460)/94-U.P. Act 15-48 Order 96 dated 19.7.1996 and Notification No. TT-2-640/XI-9(640)/94-Act-15-48-Order-97 dated 21.2.1997 were available. However, the petitioner preferred to claim exemption under the notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , employment potential and the possibilities of down stream projects, apart from the contribution to the general economic development of that area. These facility shall include declaration of functions of such units as 'essential/service' in the interest of production. In all such cases, decisions shall be taken by the Cabinet on the basis of recommendation of Empowered Committee under the Chairmanship of the Chief Secretary. There is nothing to suggest that such Industrial Policy has been approved by the Cabinet of the State Government. However, it does not provide exemption to the extent of 200% on the capital investment in a case where the unit has made an additional investment of Rs.50 crores or more. It only provides that in order to attract large industrial units to the State Government, it is proposed to provide special incentive to such units. This incentive shall be in addition to the ones listed in the policy. This attraction would be in the form of concessions/incentive with reference to land or its value, 'trade tax etc. This facility shall be given on a case to case basis to the units which have an investment of more than Rs.50 crore. It shall be depend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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