TMI Blog2021 (7) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... d PC monitors. No goods similar to those were being manufactured by it, earlier. Therefore, a purposive construction has to be made. Reliance had also been placed on para 11 and 12 of the judgment of Hon'ble Apex Court in COMMISSIONER OF SALES TAX VERSUS INDUSTRIAL COAL ENTERPRISES [ 1999 (2) TMI 530 - SUPREME COURT ]. The Court further observed that it also cannot be disputed that the burden to establish that the assesse had made a single diversification to manufacture refrigerators and PC monitors rested on the assessee. It was a special fact in the knowledge of the assessee. Therefore, the burden would remain on the assessee to prove the same and for the revenue authorities to rebut such evidence as the assesse may produce. Now at this stage it is not expected from this Court to take fresh appraisal of the evidences or fact findings recorded by the Tribunal, or submitted for consideration by the revenue/revisionist. The trade tax revision could not be dealt with and decided as an appeal by this Court as an appellate authority. If fact finding authority comes to certain conclusion honestly and bona fidely, the mere fact that Court may have a different perspective of that q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97 and granted further approval to the parent company to manufacture and market (by the assessee company) various electrical and electronic appliances mentioned in the letter dated 29.01.1997 and also Microwaves ovens and PC monitors. In the light of such approval letters, the assessee company was incorporated and consequently engaged in the activity of manufacture and marketing of various electrical appliances and electronic goods. In the context of the dispute that had arisen, it is seen that the State Government had, vide notification nos. 780 and 781, both dated 31.03.1995, provided for schemes to grant exemption to 'new units' established inside the State and to units engaged in expansion, diversification and modernisation, during the period 01.04.1995 and 31.03.2000. It is a common case between the parties that the aforesaid notifications came to be amended on 16.11.1995, by notification nos. 2760 and 2761, whereby, instead of providing for exemption by way of monetary limit, with respect to other than electronic goods, exemption was provided only with reference to time from the date of start of production. Again, by notification nos. 640 and 641, both dated 21.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so a fact that the aforesaid two applications came to be considered separately by the DLC. The application to claim exemption for manufacture of refrigerators was allowed by the DLC, vide its order dated 12.05.2003, and in that regard, the assessee was granted exemption on the entire investment of Rs.42 crores made by it. However, the second application filed with respect to PC monitors was rejected by the DLC by its order dated 07.07.2005 treating the same to be diversification separate and distinct from diversification to manufacture refrigerators. Accordingly, the investment of Rs. 8.13 crores, made by the assessee, was found to be below the qualifying limit of 25% of the original fixed capital investment (Rs. 51,37,35,446/-). This order was sought to be reviewed. However, the review application was rejected by the DLC on 24.05.2006. Upon appeal, the Tribunal allowed the assessee's appeal and remitted the matter to the DLC with a finding to the effect that it was clear that the purchases regarding machineries to manufacture both products (that is refrigerators and monitors) was carried out during the same period. Also, the Tribunal found that the DLC had not taken into consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that a proper opportunity shall be given to the assessee. The impugned order of the tribunal dated 16.5.2012 is set aside. The revision is disposed of as above. No costs. In compliance of the aforesaid order, the Tribunal has again adjudicated the issue by order dated 22.10.2012 which has given rise to Sales/Trade Tax Revision No.125 of 2013 (L.G. Electronics India Pvt. Ltd. v. commissioner of Commercial Taxes) (in short the previous revision ), which was finally disposed of by judgment and order dated 24.10.2019. In the previous revision the bone of contention was whether under clause (d) of Explanation (5) of the Section 4A of UPTT Act additional fixed capital investment of Rs.42 crores in refrigerator and Rs.8,13,30,080/- in monitor should be treated as joint diversification in terms of the judgment of Hon'ble Supreme Court in the case of DSM Group of Industries and according the Applicant should be granted exemption under Section 4A and further whether the assessee can be denied the benefit of exemption under Section 4-A, when admittedly the assessee's industrial undertaking has made additional fixed capital investment of more than 25% of the original fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diversification in terms of the judgment of Hon'ble Supreme Court in the case of DSM Group of Industries and according the Applicant should be granted exemption under Section 4A? B. Whether for the purposes of clause (d) of Explanation (5) of Section 4-A of the Act, additional fixed capital investment of the 'industrial undertaking' as a whole has to be taken into account or item-wise additional fixed capital investment has to be seen? C. Whether the Applicant can be denied the benefit of exemption under Section 4-A, when admittedly the Applicant's industrial undertaking has made additional fixed capital investment of more than 25% of the original fixed capital investment? D. Whether the Tribunal has wrongly relied upon Clause (d) of the above explanation (4) of Section 4A of UPTT Act to hold that the Applicant has himself separately shown the investment in refrigerator and monitor, therefore it cannot be considered jointly for the purpose of Section 4A? 15. Relying on the plain language of Section 4-A(1) read with proviso as also sub-section 2(c) and 5(b) of the Act as also notification nos. 780 and 781, both dated 31.03.1995, notification n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction has been invoked by relying on the decision of the Supreme Court in Commissioner of Sales Tax Vs. Industrial Coal Enterprises, (1999) 2 SCC 607 and Bajaj Tempo Ltd., Bombay Vs. Commissioner of Income Tax, Bombay City-III, Bombay, (1992) 3 SCC 78 to submit that the rule of strict construction may be applied only for the purposes of determining the eligibility to exemption and no further. 19. In so far as there exists credible and sufficient evidence to establish that the assessee had engaged in a common diversification exercise to manufacture both refrigerators and PC monitors, at a single point in time, at the same unit, the investment made in that exercise had to be taken as composite whole and not truncated by looking at the investment made to manufacture refrigerators as distinct and independent of that made to manufacture PC monitors. The fact that the assessee was forced to or; chose to file two separate applications would remain a factor extraneous to the dispute, inasmuch as, such application became necessary on account of separate notifications providing for separate methods of computation of exemption on manufacture of electronic goods and electrical goods. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bruary 26, 2001. All these documents are claimed to be existing on the record of the Tribunal. Then referring to the written arguments that were placed before the Tribunal, it has been further emphasised that this issue was specifically raised by disclosing (based on evidence on record), the date of Commercial Invoice to purchase separate assembly lines for the two products as common i.e. 26.02.2001 and the date of first investment in plant and machinery for refrigerators as 01.02.2001 whereas that for PC monitors as 15.11.2000. Further, the date of starting production of PC monitors was 11.5.2001 whereas that of refrigerators was 11.07.2001. It also, established existence of a single diversification. 23. Also, it has been submitted, no evidence was led by the revenue to rebut the claim made by the assessee on the strength of the evidence noticed above. The revenue authorities relied on presumptions solely occasioned by the fact that the assessee had filed two separate applications for grant of exemption on manufacture of refrigerators and PC monitors, which ground was found to be irrelevant by the Tribunal itself. 24. Coming to the impugned order of the Tribunal, learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd. v. CIT [(1992) 3 SCC 78] it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision. 12. We find that the object of granting exemption from payment of sales tax has always been for encouraging capital investment and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industry in the State. If the test laid down in Bajaj Tempo Ltd. case [(1992) 3 SCC 78] is applied, there is no doubt whatever that the exemption granted to the respondent from 9-8-1985 when it fulfilled all the prescribed conditions will not cease to operate just because the capital investment exceeded the limit of Rs 3 lakhs on account of the respondent becoming the owner of land and building to which the unit was shifted. If the construction sought to be placed by the appellant is accepted, the very purpose and object of the grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts during the year 2001. The Company is planning to introduce many new models, thus making the company with the widest range of models in all its product category. During the year 2000, the Company has started work to add a Refrigerator Plant to its existing production facilities which would be operational by July 2001. The Company is planning to start assembling of Monitors in India in May 2001. 29. Not only such position appears to have been made clear in such public document, but also the assessee substantiated the same by adducing corroborative evidence in the shape of same date invoices dated 26.2.2001 to purchase vital machineries, being separate assembly lines to manufacture PC monitors and refrigerators. Further corroborative evidence appears to have been filed in the shape of details of plant and machinery, equipments, parts and components, etc. purchased to set up the manufacturing facilities for refrigerators and monitors. Those dates overlapped or ran parallel. Moreover, the date of first investment; starting production and; first sale for the two goods PC monitors and refrigerators were very close to each other as appear to be prima facie supportive of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned undischarged at the hands of that assessee/Kajaria Ceramics. 33. It was in that factual context, the Supreme Court further observed that the scheme of expansion would necessarily warrant estimates, plants, drawings etc. It then observed, there was not a single piece of evidence, to establish that the expansion was a single step exercise carried out by that assessee. On the contrary, it was found that with respect to each three expansions, separate industrial licences had been applied for and obtained by that assessee. Moreover, separate negotiations had also been entered into at each stage. Therefore, in the face of such evidence, it was concluded that there were three separate expansions carried out by that assessee. 34. Such evidence has not been shown to exist in the present case. In fact, at present, the entire evidence appears to indicate at least on prima facie basis that the decision to diversify and its implementation was a single effort made by the assesse, which for unexplained reasons, came to be described as joint-venture. However, that word description is of no legal consequence. Therefore, the Tribunal has failed to consider material evidence filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture PCB and Microwave Ovens vide eligibility certificate dated 27.9.2000. That issue has also remained from being thrashed out by the Tribunal. 38. Accordingly, I find that the Tribunal has misdirected itself in approach and, therefore, its order cannot be sustained. As to what would be the conclusion to be drawn on facts, is not being commented upon in this order. That would remain for the Tribunal to consider and decide on the strength of evidence placed before it. Insofar as the correct approach to be followed, that has been settled above. 39. In view of the above, the questions of law (as framed above) remain unanswered. 40. Accordingly, the order of the Tribunal is set aside and the matter is remitted to it to pass a fresh, strictly in accordance with law, keeping in mind the observations made above. 41. The aforesaid exercise may be completed as expeditiously as possible, preferably within a period of six months from the date of production of certified copy of this order. 42. With the aforesaid observations, the present revision stands disposed of. In response to the judgment and order passed in the previous revision the Tribunal considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Revisions Nos.499 and 502 of 1999 decided on 12.9.2002 and Commissioner, Commercial Tax v. Dabur India Ltd. , Sales/ Trade Tax Revision Nos.441 of 445, 447, 448, 450, 451, 453, 455, 463 to 465 467 and 507 to 509 of 2014 decided on 25.09.2014. Heard rival submissions, perused the record and respectfully considered the judgments cited at Bar. The Revision No.125 of 2013 was admitted on the following questions of law:- A. Whether under clause (d) of Explanation (5) of the Section 4A of UPTT Act additional fixed capital investment of Rs.42 crores in refrigerator and Rs.8,13,30,080/- in monitor should be treated as joint diversification in terms of the judgment of Hon'ble Supreme Court in the case of DSM Group of Industries and according the Applicant should be granted exemption under Section 4A? B. Whether for the purposes of clause (d) of Explanation (5) of Section 4-A of the Act, additional fixed capital investment of the 'industrial undertaking' as a whole has to be taken into account or item-wise additional fixed capital investment has to be seen? C. Whether the Applicant can be denied the benefit of exemption under Section 4-A, when admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority comes to certain conclusion honestly and bona fidely, the mere fact that Court may have a different perspective of that question, cannot be a ground to interfere with the finding even though another view may be possible. Considering the limited jurisdiction exercisable under the Act such a course is not available. While passing the order impugned, the Tribunal has clearly proceeded to observe:- While passing the order impugned, the Tribunal has no doubt considered para 36 and 37 of the judgment passed by this Court but at the same time has also considered the documents and evidence filed before the Tribunal. The Tribunal has opined that there was single diversification for carrying out the work to set up manufacturing unit for manufacture of refrigerators and monitors. These are findings of fact, which cannot be interfered with by this Court in revisional jurisdiction. The revenue has not been able to place any material, which may indicate that the finding recorded by the Tribunal are based on no evidence or passed on irrelevant consideration. This Court in its judgment dated August 13, 2002 passed in S.T.R. No. 25 of 2001, Naseer (Driver) v. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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