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TMI Blog2003 (1) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... e partners of the firm were Sri Arvind Arora, Sri Alok Arora and Smt. Seema Arora. One of the partners, Sri Arvind Arora was having land of his own which he got in the family settlement from his parents in the decree passed by the Civil Judge in Original Suit No. 25 of 1983. In the said suit a settlement took place and the disputed land on which a building was constructed by the petitioner-firm came to the share of Arvind Arora. Sri Arvind Arora has given this land to the partnership-firm for establishing the unit in question. 4.. In paragraph 6 of the writ petition it is stated that on the said land the petitioner-firm constructed a building and has invested a sum of Rs. 2,50,000 for the construction of the building. Photocopy of the balance sheet of the firm is annexure 1 to the writ petition. A perusal of the balance sheet shows that the fixed assets as per Schedule G of the firm was valued at Rs. 4, 15, 753.39 and a perusal of Schedule G shows that a sum of Rs. 2, 50,550 has been invested by the firm in the construction of the building. Photocopy of the certificate of the chartered accountant in this connection is annexure 2 to the writ petition. 5.. The petitioner applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lease deed in respect of the both land and building were filed. In these circumstances the petitioner had no other alternative but to get a lease deed executed from Arvind Arora who was himself one of the partners of the petitioner-firm. True copy of the registered lease deed dated November 11, 1987 executed by Arvind Arora in favour of the petitioner-firm is annexure 5 to the writ petition. 8.. The petitioner's application for exemption was processed by the District Level Committee and by the Divisional Level Committee. The Divisional Level Committee then by order dated April 22, 1988 granted exemption of trade tax, w.e.f. October 15, 1985 for a period of three years. True copy of the eligibility certificate dated April 22, 1988 is annexure 6 to the writ petition. The petitioner enquired from the office and came to know that as the investment of the building has not been included in the capital investment hence the exemption was granted only for three years. On coming to know of this petitioner filed a review application dated October 6, 1988 before the Divisional Level Committee copy of which is annexure 7 to the writ petition. 9.. However, by order dated January 19, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground that the lease deed has been executed for the land and building and hence its value cannot be taken into consideration. It is submitted that the land having belonged to one of the partners of the firm, there was no necessity for a lease deed in favour of the firm but a superfluous document was written on the direction of the industries department. 11.. A counter-affidavit has been filed on behalf of the respondents. In paragraph 5 of the same it is stated that at the time of filing of an application for exemption it was shown by the petitioner that the land and the building of the firm was on rent for a period of ten years and it was filed for registration in the sub-registrar's office. Since in the application for exemption the petitioner had showed the land and building on rent the said application was processed accordingly. A copy of the lease deed is annexure C.A. 1. In paragraph 6 of the counter-affidavit it is stated that the certificate of the Chartered Accountant dated January 3, 1987 clearly shows that originally the value of the land and building was shown but the said document had been obtained in order to show that the building was constructed by the partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant has only verified the cost of the building and has not shown the cost of the land. 13.. From a perusal of the pleadings of the parties and after hearing the learned counsel for the petitioner and learned standing counsel the factual position which emerges is that the petitioner is a partnership-firm consisting of Arvind Arora, Alok Arora and Smt. Seema Arora as partners. The firm has established a new industrial unit for the manufacture and sale of medicines in pursuance of the scheme announced by the State Government by the G.O. dated September 30, 1982 for granting exemption from payment of tax to the new unit under section 4-A of the U.P. Trade Tax Act. The land in question admittedly belongs to one of the partners of the firm, namely, Arvind Arora. On the said land building was constructed by the firm with an investment of Rs. 2,50,000. Schedule G of the balance sheet of the firm which is part of annexure 1 to the petition clearly shows that a sum of Rs. 2,50,550 was invested by the petitioner-firm in respect of the building, and this is also proved by the certificate of the Chartered Accountant copy of which is annexure 2 to the writ petition. The certificate also shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r opinion both the value of the land as well as that of the building should have been included in the capital investment of the petitioner-firm. Thus the investment is above Rs. 3 lacs. 19.. The review application copy of which is annexure 7 to the writ petition refers to the circular of the Commissioner, Trade Tax dated February 25, 1988 which has not been considered by the Divisional Level Committee. In the said circular it is mentioned that even if the land or building is not the name of the industrial unit but is in the name of the partner/proprietor/ promoter, still the exemption is admissible. Hence even if the land is not in the name of petitioner unit but was in the name of partners of the petitioner-firm in our opinion the value of the land should have been taken into consideration and hence the exemption should have been granted for five years. 20.. In Commissioner of Sales Tax, U.P. v. Indra Industries [2001] 122 STC 100; 2000 UPTC 472 the Supreme Court held that a circular of the Commissioner of Sales Tax is binding on the tax authorities. This is also the view taken by this Court in Raghunatyh Laxminarain Spices Pvt. Ltd. v. State of U.P. 2000 UPTC 554. In Collecto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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