TMI Blog2013 (3) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 5-3-2013 - GIRISH CHANDRA GUPTA AND TARUN KUMAR DAS, JJ. For the Appellant : J.P. Khaitan, Senior Advocate and Nirmalya Biswas For the Respondents : Abhrathosh Majumder and Soumitra Mukherjee The undisputed facts and circumstances of the case are as follows: In or about 1989 a reference was made to the BIFR under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. By an order dated April 1, 1991 a rehabilitation scheme was sanctioned. On the basis of the prayer of the company the Board passed an order dated March 13, 1996 holding that the company had ceased to be a sick industrial company. Mr. Khaitan, learned senior advocate appearing for the petitionercompany submitted that the company had really ceased to be sick in February 1995 and on that basis the prayer was made but the consequent order was passed by the BIFR on March 13, 1996. Prior to March 13, 1996 the company had been enjoying the benefit of deferment of payment of tax under the old Act. After the West Bengal Sales Tax Act, 1994 was introduced and the remission was made available to the jute industry under section 43 thereof, the petitioner-company applied and obtain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on would not even suggest that while calculating the value of plant and machinery, depreciation of those equipment will have to be taken into consideration in computing the valuation of the plant and machinery. In our view, in computing the valuation of plant and machinery, only the cost price/purchase price of the equipment invested by the assessee will have to be taken into account. The expression 'investment' in plant and machinery is not subject to the impact of depreciation in the value of plant and machinery. Since the assessee's investment is more than ₹ 5 lakhs before the periods in question and since the investment continues to remain unchanged, the assessee is not entitled to exemption from payment of sales tax either under the Rules or under the notification. He also drew our attention to a judgment in the case of Commissioner of Income-tax, Amritsar v. Strawboard Manufacturing Co. Ltd. reported in [1989] 177 ITR 431 (SC) wherein the apex court opined that a liberal construction was necessary. To be precise Mr. Khaitan drew our attention to these lines from the penultimate paragraph of the report at page 434. . . . It is necessary to remember th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day under any scheme approved by the State Government. (2) The benefit of deferment of payment of tax under section 40 or remission of tax under section 41 shall be available to a new owner of the business relating to such unit if- (a) the ownership of such business is taken over by, and is transferred to, the new owner who- (i) is deemed to be registered as a transferee under section 99, or (ii) has been registered dealer prior to such transfer, or (iii) gets himself registered on a date subsequent to such transfer, and (b) such unit is rehabilitated or revived by such new owner on or after the appointed day under any scheme approved by the State Government in this behalf. (3) A sick unit, after being rehabilitated or revived, shall be deemed to be a newly set up industrial unit in West Bengal, and the part of the eligible period, if any, for which the dealer availed of the benefit before the rehabilitation or revival, shall not be reckoned for computation of the eligible period for the dealer or transferee-dealer, as the case may be, after such rehabilitation or revival. (4) The amount of tax or the aggregate of the amounts of tax payable by, or due fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch sick industrial unit. It would appear from the Explanation noticed above that the gross value of the fixed capital assets as stood on the date of rehabilitation/revival of a sick unit and the cost of new plant and machinery purchased and installed have to be taken into account. Therefore with respect to a new plant and machinery purchased and installed it is not difficult to find out the extent of investment because actual price paid can be taken into account. But with regard to the existing machinery or fixed capital assets the value which can be taken into account is the value which stood on the date of rehabilitation or revival of the sick unit. Mr. Khaitan contended that the value of the machinery is that at which the machinery was purchased, the value of the land is the cost at which the land was purchased, which would also appear from the balance sheet. He submitted that the depreciated value cannot be taken into account because that was not the intention of the Legislature. If that were so the Legislature could have provided that the depreciated cost of the fixed capital assets shall be taken into account. The Legislature has not done so. We are not inclined to acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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