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2022 (7) TMI 347 - HC - VAT and Sales TaxGrant of eligibility certificate - ownership of the land in the name of the Promoter Director can be considered to be the land of the unit or not - non-consideration of the fact that the final registration with the Industries Department was in continuation of the provisional registration granted in 1996 and 2001 - twisting the fact of the case and without proper appreciation of fact Tribunal has recorded the perverse finding - entitlement to exemption under Section 4-A of the Act in view of notification no. 3867 dated 22.12.2001 - non-consideration of basic legislative intent of the provisions of Section 4-A granting incentives for promoting growth and development - impugned order passed on the basis of extraneous consideration - whether the conditions laid down would be directory or mandatory? HELD THAT - Commissioner of Income-tax, Amritsar v. Straw Board Manufacturing Co. Ltd., 1989 (4) TMI 339 - SUPREME COURT , the Supreme Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd. Bombay v. Commissioner of Income-tax, Bombay City - III, Bombay, 1992 (4) TMI 4 - SUPREME COURT , it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision. The object of granting exemption from payment of sales tax has always been for encouraging capital investment and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industry in the State - the Eligibility Notification lay down conditions for seeking benefit of Exemption Notification, which have to be fulfilled and are mandatory in nature and have to be strictly complied with by the dealer if he wishes to claim exemption. In case any of the conditions are not fulfilled, same would dis-entitle the dealer from being granted benefit under the said notification. Thus, in view of the facts of the present case, it is noticed that even though the land did not belong to the Promotor/Director of the revisionist firm, but the same was sought to be transferred to the revisionist and that transfer can be said to have been completed on 17.01.2001, when UPSIDC directed for transfer of plot no. F-63 in favour of the revisionist firm. It cannot be said that prior to 17.01.2001, the land was transferred in favour of the revisionist. The validity of the agreement to sell dated 25.11.1999, has been doubted by the Tribunal as the original copy was never produced before the Tribunal nor were the documents produced before the Divisional Level Committee, which was considering the case of the revisionist firm. Even before this Court no material has been placed so as to doubt the correctness of findings recorded by the Tribunal and hence there is no material before this Court to interfere with the concurrent findings of authorities below that the condition required for transfer of land was not completed prior to last date i.e. 31.01.2000. Thus, no interference is required with the findings recorded by the Tribunal that the land was not transferred prior to cut off date prescribed in the exemption notification dated 22.12.2001. It is also noticed that one of the condition required for grant of exemption was that the unit should be registered with the Industries Department and both the plots were jointly registered with the Industries Department on 21.03.2001, which is clearly beyond 31.03.2000, which is cut-off date, and consequently, it is noted that revisionist did not fulfill the conditions before the cut-off date fixed and hence is not entitled for exemption. The present revision is dismissed.
Issues Involved:
1. Justification of the Tribunal in not considering the decision in Kanhaiya Beverages Pvt. Ltd. case. 2. Continuation of final registration with the Industries Department. 3. Alleged twisting of facts by the Tribunal. 4. Ownership and registration of plot No. F-63. 5. Material dates for registration and amendment in the registration certificate. 6. Legislative intent of Section 4-A for promoting growth and development. 7. Ignoring legal precedents by the Tribunal. Detailed Analysis: Issue 1: Justification of the Tribunal in not considering the decision in Kanhaiya Beverages Pvt. Ltd. case. The revisionist argued that the Tribunal failed to consider a precedent where ownership of land in the name of the Promotor Director was deemed sufficient for granting an eligibility certificate. However, the Tribunal found that the specific conditions of the exemption notification dated 22.12.2001 were not met, particularly concerning the valid transfer of land before the cut-off date. Issue 2: Continuation of final registration with the Industries Department. The revisionist contended that the final registration was in continuation of provisional registrations granted in 1996 and 2001. The Tribunal, however, emphasized that the registration of the plot in the name of the unit occurred on 25.03.2002, beyond the prescribed cut-off date of 31.03.2000, thus disqualifying the unit from exemption. Issue 3: Alleged twisting of facts by the Tribunal. The revisionist claimed that the Tribunal twisted facts and recorded perverse findings. The Tribunal, upon examining the lease agreement and the validity of the agreement to sell, found that the land transfer was not validly completed before the cut-off date, and the machinery used was old, thereby upholding the rejection of the exemption application. Issue 4: Ownership and registration of plot No. F-63. The Tribunal held that plot No. F-63, allotted to Ajay Kumar Gupta, Promotor Director, could not be deemed the unit's plot until registered in the unit's name. The transfer of the plot was completed on 17.12.2001, and the registration with the Industries Department occurred on 25.03.2002, both dates being beyond the cut-off date. Issue 5: Material dates for registration and amendment in the registration certificate. The Tribunal found that the registration and amendment in the registration certificate with the Industries Department were material dates. Since these were completed after the cut-off date, the applicant was not entitled to exemption under Section 4-A of the Act as per notification no. 3867 dated 22.12.2001. Issue 6: Legislative intent of Section 4-A for promoting growth and development. The revisionist argued for a liberal interpretation of Section 4-A, intended to promote industrial growth. The Tribunal, referencing Supreme Court precedents, held that exemption provisions must be strictly construed, and the conditions laid down in the notification must be strictly complied with. Issue 7: Ignoring legal precedents by the Tribunal. The revisionist alleged that the Tribunal ignored precedents set by higher courts. The Tribunal, however, adhered to the principle that exemption notifications must be strictly interpreted. The Tribunal found that the revisionist failed to fulfill the mandatory conditions by the cut-off date, thus justifying the rejection of the exemption application. Conclusion: The Tribunal's decision was based on the strict interpretation of the exemption notification and the fulfillment of conditions by the prescribed dates. The revisionist failed to meet the required conditions, including valid land transfer and the use of new machinery, by the cut-off date. Consequently, the Tribunal's findings were upheld, and the revision was dismissed. No question of law arose for adjudication, affirming the Tribunal's decision.
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