2000 (8) TMI 1068 - HC - VAT and Sales Tax

Summary

Issues:
- Claim for exemption under section 4-A of the U.P. Sales Tax Act
- Interpretation of eligibility criteria for exemption as a new unit
- Justification of remanding the matter to the Divisional Level Committee
- Examination of evidence regarding the use of machinery for production
- Authority to make a decision on machinery utilization

Analysis:
The case involved a revision filed against the Trade Tax Tribunal's order denying exemption from sales tax under section 4-A of the U.P. Sales Tax Act. The applicant, a new unit for manufacturing welding electrodes and wire cables, sought exemption based on total investment. The Divisional Level Committee granted partial exemption due to the purchase of old machinery from a non-manufacturer. The State Level Committee upheld the decision, leading to an appeal before the Tribunal.

During the hearing, the applicant argued that the Tribunal should have decided the appeal on merit rather than remanding it. The applicant contended that the machinery in question was not used for production, as evidenced by department reports. The applicant relied on a previous court decision to support their claim for exemption without remand.

The Standing Counsel argued that the utilization of machinery should be determined by the Divisional Level Committee, justifying the Tribunal's decision to remand the matter. However, the High Court noted discrepancies in survey reports regarding the machinery's status, highlighting the lack of a definitive finding on its use. The Court emphasized that after 8 years, determining machinery utilization was impractical.

Consequently, the Court set aside the Tribunal's remand order, directing it to decide the appeal based on existing evidence. The Court concluded that the Tribunal should have made a merit-based decision, given its role as the final fact-finding authority. The revision was partially allowed, with each party bearing their own costs, concluding the judgment.