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TMI Blog2002 (5) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... vel (Trade Tax Exemption) Committee, Meerut, by its order dated November 11, 1999 allowed the application of the applicant and granted exemption from payment of tax to the extent of Rs. 3,71,49,000 being 150 per cent of the fixed capital investment, i.e., Rs. 2,76,13,000. A copy of eligibility certificate dated November 11, 1999 is enclosed as annexure 1 to the revision. The applicant installed second plant for undertaking expansion with fixed capital investment of Rs. 3,04,37,000 after achieving 80 per cent production of the installed annual production capacity of 20,759.213 MT, whereas 80 per cent comes to 20,160 MT and started commercial production in the second plant on December 29, 1999 by undertaking expansion scheme as per Explanation (5) to section 4-A of "the Act". 3.. The first installed capacity of the plant was 25,200 MT per year and the installed capacity of the second plant was 42,000 MT, thus the total capacity for exemption was 67,200 MT. The production and sales of industrial solvent of the first plant from April, 1999 and continued up to March, 2000 was 34,397.658 MT, whereas, up to month of December, 1999 the applicant achieved more than 80 per cent production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred against the above order dated December 31, 2001. 5.. In the present facts and circumstances the applicant has submitted the following questions for consideration: (i) Whether a unit can undertake expansion even if its production period of more than one year has not expired; and if the expansion is undertaken after 8 months and 10 days will it go out of the field of eligibility under Explanation 5 to section 4-A of U.P. Trade Tax Act? (ii) Whether the learned Tribunal was legal to reject the applicant's appeal on the ground that clauses (a) and (b) of explanation (6) to section 4-A of "the Act" are mutually inclusive as is to be read in conjunction with each other especially when the applicant had achieved 80 per cent of installed annual capital investment before undertaking expansion on December 29, 1999? (iii) Whether the clause (b) of the amended Explanation (6) to section 4-A of "the Act" is at all applicable in the case of the applicant when 80 per cent of the installed capacity was achieved? (iv) Whether the learned Tribunal was correct to interpret explanation (6) as amended by U.P. Act No. 26 of 1998 that looking into the unamended explanation (6) which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 4-A of the Act. Section 4-A, explanation (5) defines the meaning of the unit undertaking expansion. 7.. It has been argued on behalf of the applicant/revisionist that the field of eligibility is one thing and grant of exemption under the scheme of the expansion after a certain period is absolutely another thing. Explanation (5) to section 4-A of the Act defines the field of eligibility as follows: "Explanation (5) 'Unit which has undertaken expansion, diversification or modernisation' means an industrial undertaking,- (a) of a dealer who is not defaulter in payment of any dues under this Act or the Central Sales Tax Act, 1956 or under any loan scheme administered by the Pradeshiya Industrial and Investment Corporation of Uttar Pradesh regarding trade tax on sale or purchase of goods; (b) whose first date of production of goods- (i) of a nature different from those manufactured earlier by such undertaking in case of units undertaking diversification, and (ii) manufactured in excess of base production in such undertaking in case of units undertaking expansion or modernisation, falls at any time after March 31, 1990; (c) the production capacity whereof except as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as declared this production capacity was more than 80 per cent. 10.. The preamble of Notification TT-2-78/XI-9(226)94-UP Act-15/ 48-Order No. 95 dated March 31, 1995 provides as follows: "Whereas the State Government is of the opinion that for promoting the development of certain industries in the State, it is necessary to grant exemption from or reduction in rate of tax to new units and also to units which undertaken expansion, diversification, modernisation or backward integration." Clause 1(B) of the notification dated March 31, 1995 provides for grant of exemption to the unit which has undertaken expansion on or after April 1, 1995 but not later than March 31, 2000 shall be entitled for exemption mentioned in column 3 of annexure 1 to the said notification or till the maximum amount of monetary limit of exemption mentioned in column 5 of annexure 1 is achieved, whichever is earlier, on the turnover of sales. Since the applicant's unit is situate in the district of Meerut, it is entitled for exemption for a period of eight years on the turnover of sales of the goods which is in excess of base production. 11.. Once the applicant has fulfilled the requirement of field ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that additional fixed capital investment in case of a unit undertaking expansion should be at least twenty-five per cent of such original fixed capital investment. Shri Bharat Ji Agrawal, learned counsel for the revisionist, has rightly pointed out that the explanation as aforesaid provides only with regard to the field of eligibility. By explaining as to what would be meant by a unit which has undertaken expansion, etc., the explanation provides as to which unit shall be eligible for facility of exemption under section 4-A of the Act. In view of the aforesaid decision, it is absolutely clear that explanation (5) is only regarding for deciding as to whether the unit comes within the field of eligibility." 12.. Admittedly, the applicant's unit comes within the field of eligibility as mentioned in explanation (5) to section 4-A of "the Act" and learned Tribunal was not justified in relying upon explanation (6), which only defines the base production for purposes of deciding the field of eligibility of the unit undertaking expansion. 13.. So long as base production of unit undertaking expansion falls at any time after March 31, 1990 and before March 31, 2000, it shall be a unit wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded and argued on behalf of the applicant-revisionist that even assuming without admitting that explanation (6) has also to be considered (as amended by U.P. Act No. 26 of 1998) still clauses (a) and (b) are not mutually inclusive as held by the Tribunal. By U.P. Act No. 26 of 1998 following amendment was made which is reproduced below: "6(e) For the existing explanation (6), the following explanation shall be substituted and be deemed to have been substituted on April 1, 1990, namely: (6) For the purposes of this section the expression 'base production' means,- (a) eighty per cent of the installed annual production capacity; or (b) maximum production achieved during any one of the preceding five consecutive assessment years or if the unit were in production for less than five years, the maximum production achieved during any one of the preceding assessment years whichever is higher: Provided that where a unit manufacturing more than one goods has not undertaken expansion or modernisation in respect of all such goods, its base production will be determined on the basis of production of goods in respect of which expansion or modernisation has been undertaken: Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be a public servant. The three categories are as held by the learned special Judge, (i) a person in the service of the Government; (ii) a person in the pay of the Government; and (iii) a person remunerated by fees or commission for the performance of any public duty by the Government. One can be in the service of the Government and may be paid for the same. One can be in the pay of the Government without being in the service of the Government in the sense of manifesting master-servant or command-obedience relationship. The use of the expression 'or' does appear to us to be disjunctive as contended on behalf of the respondent. Depending upon the context, 'or' may be read as 'and' but the court would not do it unless it is so obliged because 'or' does not generally mean 'and' and 'and' does not generally mean 'or'. (See Green v. Premier Glynthonwy Slate Co. Ltd. [1928] 1 KB 561 at p. 568, Manmohan Das Shah v. Bishun Das [1967] 1 SCR 836 at p. 839; AIR 1967 SC 643 and Kamta Prasad Aggarwal v. Executive Officer, Ballabgarh [1974] 2 SCR 827 at p. 830; AIR 1974 SC 685 at page 687 and several others which we consider it unnecessary to enumerate here." 19.. The same view has been t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 29-A of the U.P. General Clauses Act, 1904 shall be illegal what to say the circular being contrary to the legislative enactment of Explanation (5) to section 4-A of the Act. A division Bench of this Court in Hindustan Reprographics Limited v. State of Uttar Pradesh [1989] 72 STC 424 (All.); 1988 UPTC 1232, has held that the circulars issued by the State Government dated March 17, 1988 and March 23, 1988 being contrary to the notification dated January 29, 1985 and December 26, 1985 are illegal and cannot be relied upon for reducing the period of exemption under section 4-A of "the Act". 25.. After the judgment was reserved by the learned Tribunal in the appeal on December 11, 2001 the Notification No. 3867 dated December 22, 2001 was issued, which was sent by the Assistant Commissioner of Trade Tax, Head Quarter, to the Registrar, Tribunal, Lucknow, which also provided in clause "kha" that in respect of the unit undertaking expansion "base production" must be achieved on or before March 31, 2001 in order to get exemption under the scheme of expansion. 26.. Neither in the explanation (5) to section 4-A of "the Act" which provides field of eligibility of the unit undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X
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