1995 (5) TMI 256 - HC - VAT and Sales Tax

Summary

Issues:
1. Quashing of an order by the Divisional Level Committee and modification of eligibility certificate for dissolved acetylene gas.
2. Interpretation of the requirement for a "new unit" under the U.P. Sales Tax Act and the Factories Act.
3. Rejection of a review application based on separate registration under the Factories Act.
4. Justification of rejecting the review application solely on the ground of lack of separate registration.

Detailed Analysis:
1. The petitioner sought to quash an order and modify the eligibility certificate for dissolved acetylene gas, claiming exemption for a longer period than granted by the Divisional Level Committee. The petitioner's contention was based on the starting date of production of the unit. A review application was filed challenging the reduction in the exemption period, which was initially rejected by the Committee. However, a writ petition was allowed, setting aside the order and directing a fresh decision on the review application.

2. The central issue revolved around the interpretation of the term "new unit" under the U.P. Sales Tax Act and the Factories Act. The Explanation to section 4-A defined a new unit as an industrial undertaking set up by a dealer, requiring registration under the Factories Act. The respondent-authority insisted on a separate registration certificate for the new unit, contrary to the statutory requirement. The Court held that the registration under the Factories Act sufficed, and no separate registration was mandated.

3. The rejection of the review application was primarily based on the lack of separate registration under the Factories Act for the dissolved acetylene gas unit. The respondent contended that a separate registration was a condition precedent, which the petitioner failed to fulfill. However, the Court emphasized that the endorsement of the new unit on the existing registration certificate sufficed as per the Factories Act requirements.

4. The Court scrutinized the justification for rejecting the review application solely on the ground of separate registration. It was established that the petitioner had applied for registration as a new unit for manufacturing dissolved acetylene gas, and the Assistant Director of Factories had inspected and approved the same. The rejection based on lack of separate registration was deemed unsustainable, leading to the quashing of the impugned order and a direction for a fresh decision on the eligibility certificate.

In conclusion, the Court allowed the writ petition, emphasizing the statutory compliance with the Factories Act for establishing a new unit and rejecting the insistence on separate registration as a condition for granting eligibility certificates under the U.P. Sales Tax Act.