1996 (3) TMI 509 - HC - VAT and Sales Tax

Summary

Issues:
Determining the date of starting production for a private limited company engaged in the manufacture of single super phosphate as per the U.P. Trade Tax Act and related rules.

Analysis:
The petitioner, a private limited company, sought clarification on the date of starting production to avail benefits under a scheme dated September 30, 1982. The company claimed to have started production on October 2, 1982, when raw material was purchased for the manufacture of single super phosphate. However, the authorities argued that the date of starting production was August 23, 1982, when the power connection was obtained. The main contention revolved around whether the date of purchasing raw material or obtaining power connection should determine the starting production date.

The rules under the Government order dated September 30, 1982, emphasized the actual commencement of production rather than an artificial definition. The General Manager was required to consider various aspects, including the date of obtaining power connection and the purchase of raw material, to determine the starting production date. The petitioner's counsel argued that the rules focused on the actual date of production and not a later event like obtaining power connection.

The amendment Act of 1984 introduced a new definition for the date of starting production, but it was deemed to have come into force after the petitioner's claimed starting production date. Therefore, the rules from the Government order dated September 30, 1982, were deemed applicable to determine the starting production date for the petitioner.

The judgment highlighted that the State Government's decision on the starting production date was final, as per the scheme dated September 30, 1982. The court referenced a similar case where the amended provision could not be applied retroactively. Ultimately, the court ruled in favor of the petitioner, directing the authorities to grant the eligibility certificate under the U.P. Trade Tax Act based on the starting production date of October 2, 1982, as determined by the State Government.

In conclusion, the court allowed the petition, quashed the previous orders rejecting the application, and directed the authorities to issue the eligibility certificate within ten days based on the State Government's decision on the starting production date.