2003 (4) TMI 523 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to rejection of exemption application under section 4-A of U.P. Sales Tax, 1948.

Analysis:
The petitioner, a partnership firm, established a new industrial unit for manufacturing sodium silicate and applied for exemption under section 4-A. The application was rejected based on the purchase of a machine from another company. The petitioner filed a review application stating that the machine was not used by the selling company and was directly acquired from the fabricator. Despite evidence supporting the petitioner's claim, the review application was rejected. The High Court previously remanded the matter for consideration of delivery details, which were ignored in the subsequent rejection.

The counter-affidavit admitted the closure of the selling company but focused on the order placement for the machine. The impugned order considered the machine as old based on the order placement by the selling company, overlooking evidence of direct delivery to the petitioner. The High Court deemed the rejection arbitrary and illegal, emphasizing the direct delivery as proof of the machine being new. Precedents were cited where rejection without considering relevant documents was deemed illegal, and conducting inquiries without involving the petitioner was held non-binding.

Referring to the purpose of section 4-A to promote industry development, the High Court concluded that the machinery was new and the review application rejection was unjust. Consequently, the impugned orders were quashed, and the petitioner was granted the eligibility certificate and associated benefits as requested.

In conclusion, the High Court allowed the petition, emphasizing the arbitrary rejection of the review application and directing the issuance of the eligibility certificate to the petitioner with all consequential benefits.