9911796707
TMI Blog1990 (7) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... gal Finance (Sales Tax) Act, 1941 and the West Bengal Sales Tax Act, 1954, and started business on 1st March, 1979. The applicant is also registered as a small-scale industrial unit with the Directorate of Cottage and Small-scale Industries with effect from the 25th February, 1980. The applicant started manufacture of rubber goods from the 1st January, 1980. Thereafter it applied to the Assistant Commissioner of Commercial Taxes for eligibility certificates on 3rd January, 1981, under rule 3(66) of the Bengal Sales Tax Rules, 1941 and under section 4AA of the West Bengal Sales Tax Act, 1954. The applicant claimed that it had produced all the necessary vouchers with regard to the plant and machinery purchased by it. It purchased plant and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered by him unnecessary. It is mainly this particular order of the Additional Commissioner which is under challenge. 4.. In its affidavit-in-reply the applicant has introduced certain facts which were not there in its writ petition filed in the High Court in June, 1982. It has now stated that the applicant had purchased all those leased machineries in the month of September, 1981 and that the total investment on account of all the plant and machinery aggregated Rs. 2,95,788.86. It claimed that since September, 1981, i.e., after the order of the Additional Commissioner was passed, there was no question of leasing of plant and machinery. Curiously enough, this fact as stated earlier was not mentioned in the writ petition filed in 1982. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir actual cost and that the total investment on plant and machinery purchased as well leased would be well within Rs. 20 lacs as stipulated in the explanation appended to rule 3(66) and Notification No. 1809-F.T. dated 1st April, 1976. He, therefore, contended that his client had fulfilled all the requirements as laid down in the relevant statute and the rules for obtaining eligibility certificate. Alternatively, he also argued that in terms of the amended definition of "sale" in section 2(g)(ii) of the Bengal Finance (Sales Tax) Act, 1941, a lease of this nature is also deemed to be sale or purchase, as the case may be. 7.. The alternative argument of Mr. Sen, however, does not hold water inasmuch as the said incorporation/amendment in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner but not considered at the time of revision. 9.. It is necessary to refer to the relevant provisions of law to understand their full import and meaning. The provisions of rule 3(66) and those in Notification No. 1809-F.T. dated 1st April, 1976, as amended are identical. Apart from other conditions, the dealer will be eligible for tax benefit if he "keeps vouchers and other documents for purchases of plant and machinery for establishment of such industry". The benefit is available to a newly set up small-scale industry. A newly set up small-scale industry means a new industrial unit, (i) with an investment up to rupees twenty lakhs on plant and machinery, excluding the value of land and building, (ii) which is registered with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture on lease is not investment, nor is it an expenditure of a capital nature. The ceiling fixed for investment, therefore, relates to a limit fixed for purchase of plant and machinery. The investment on plant and machinery clearly excludes any expenditure by way of rent on leased plant and machinery. We can think of a hypothetical case of an industrial unit which, after having invested in plant and machinery up to the ceiling limit, takes on lease additional plant and machinery worth about a crore of rupees and claims exemption of tax. This is a preposterous situation since this goes counter to the entire scheme of classification of industries for the purpose of tax holiday on the basis of valuation of assets in the shape of plant and mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial unit? Is it not, in fact, an expansion of an existing industrial unit, which has been taken on lease by the applicant? Since the question has not been specifically raised in this form, we have not considered this aspect of the case. 13.. In view of the reasons given above, we hold that the Additional Commissioner was justified in rejecting the applications for eligibility certificates. Since the applicant is not entitled to tax exemption, the Commercial Tax -Officer was competent to assess tax and issue demand notice. 14.. In the result, the application is dismissed. There will be no order for costs. B.C. CHAKRABARTI (Chairman).-I agree. L.N. RAY (Judicial Member).-I agree. Application dismissed. - - TaxTMI - TMITax - CS ..... X X X X Extracts X X X X X X X X Extracts X X X X
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