2005 (7) TMI 351 - SUPREME COURT

Whether a unit undergoing expansion is entitled under the notification dated July 27, 1991 to the benefit of exemption on the additional fixed capital investment as a result of such expansion, or the total fixed capital investment (being the aggregate of the original as well as the additional fixed capital investment)?

Whether the respondents' claim of one integrated expansion from 12,000 TPA to 60,000 TPA during the period August 12, 1988 to March 28, 1994 is sustainable in fact or in law?

Whether or not certain pre-operative expenses form part of "fixed capital investment" for the purpose of section 4-A of the U.P. Trade Tax Act and the notification dated July 27, 1991?

Whether the respondents (allegedly) not having collected or realised any tax on the strength of the eligibility certificate, granted pursuant to the High Court's judgment, and which was not stayed by this honourable Court, are entitled to any relief?

Held that:- Appeal allowed. The High Court has found that the respondent had taken the benefit of the increased capacity of the unit which came about by reason of the first two expansions in the sense that the exemption on entire sales turnover relatable to such increased capacity had been enjoyed by the respondent under the 1985 notification. The DLC had also granted tax benefit to the respondent only in respect of the third expansion excluding the pre-operative expenses. Albeit for other reasons, in our opinion, having regard to our decision on the various issues against the respondent, this is the highest relief that the respondent could claim and which the appellants concede would be the most equitable.