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TMI Blog2006 (11) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... and lastly the assessee instead of manufacturing has traded in marbles on which no tax has been deposited in the State of Uttar Pradesh. To the show cause notice so issued, the assessee submitted reply vide his letter dated November 13, 1987. Not being satisfied with the explanation so furnished by the assessee, the Commissioner, Trade Tax, by means of the order dated 18/21st November, 1987 under section 4A(3) of the U.P. Trade Tax Act, cancelled the exemption granted in favour of the assessee from the date of grant of exemption itself, i.e., May 1, 1984. Feeling aggrieved by the said order of the Commissioner, Trade Tax, the assessee filed second appeal under section 10 of the U.P. Trade Tax Act, before the Trade Tax Tribunal, U.P., Lucknow, which was numbered as Second Appeal No. 4 of 1991. The second appeal so filed by the assessee has been dismissed by the Trade Tax Tribunal vide order dated October 28, 1998 and the order passed by the Commissioner, Trade Tax, has been affirmed. On behalf of revisionist-assessee it is contended that an industrial unit at A-2, Sector 3, Noida, was established by one M/s. Glossica Laminates (P) Ltd., on April 10, 1984. The said M/s. Gl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lastly it is contended that cancellation proceedings under section 4A(3) of the U.P. Trade Tax Act, cannot be initiated by the Commissioner, Trade Tax, only if the machinery installed at the unit was used or acquired for use for any other factory or workshop. Reference may be had to the judgment of this court in the case of Shama Rice Mill, Rampur v. Commissioner of Trade Tax reported in [2005] UPTC 825 (paras 10 and 15) and Raj Oil Mills, Dehradun v. Commissioner of Sales Tax reported in [1998] UPTC 204. On behalf of department-respondent, it is submitted that during the relevant period, under the Explanation to section 4A of the U.P. Trade Tax Act, the definition of new unit , itself excluded factory or workshop where used machines or accessories or components were used. According to the learned Standing Counsel, if the machines have, in fact, been used earlier, the factory or the workshop of revisionist-assessee would not be covered by the definition of new unit entitled for exemption. He submits that the Commissioner, Trade Tax, as well as the Trade Tax Tribunal have recorded a categorical finding of fact that the machines, which were earlier purchased by M/s. Glossic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Corporation for running the cement mosaic tiles factory situate at A-2, Sector-3, Noida and accordingly, the land, building, plant and machinery were initially given by the agreement dated February 1, 1984 by M/s. Glossica Laminates Private Ltd., for running the factory for manufacture of cement mosaic tiles at A-2, Sector 3, Noida. The copy of this agreement dated February 1, 1984 between M/s. Glossica Laminates Private Ltd., and M/s. Northern India Tiles Corporation was filed on August 31, 1984 which is already on record. 5.. That since M/s. Northern India Tiles Corporation also could not finalise the installation of factory and the said factory was subsequently given on lease along with the land, building, plant and machinery to the present applicant by M/s. Glossica Laminates Private Ltd., vide agreement dated April 10, 1984, a copy of which was filed along with the exemption application dated August 14, 1984. 6. That the three machines, namely, marble cutting machines, polishing machines and complete hydraulic power pressure pump sets with necessary accessories were purchased by Northern India Tiles Corporation for the purposes of installation in the factory premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., vide agreement dated February 10, 1984. The Commissioner, Trade Tax, U.P., in its order of cancellation of the exemption has specifically recorded, amongst others, as follows: Issey pramarit hota hai ki in machino ka prayog karney ke liye Sarva Sri Glossica Laminates Private Ltd., Delhi dwara arjit ki gayee thi. Yahi nahi balki utpadan meyn prayog bhi ki gai hai. Ish firm key manager ney dinank 18-12-85 ko bikrikar adhikari ke samakchh upasthit hokar byan diye hai ki rupya 7,479=15 ka kachcha mal kharida gaya hai. Nirmit mal meyn sey 7,200 ki bikri prant ke bhitar aur rupya 300 ki antar prantiye bikri ki gayee hai. In respect of other machines which were purchased by M/s. Northern India Tiles Corporation and had been obtained on lease by the assessee, following findings have been recorded by the Commissioner, Trade Tax, in its order: Sarva Sri Nilko Tiles Private Lt. Sey rupya 8,000 ki machine kharidi gayee hai. Yah firm bhi tiles ityadi banati hai jo praman patra diya hai ushmeyn likha hua hai ki bechi gayee machine nayee hai. Stock meyn padi huyee thi, prayog nahi ki gayee. Ishshey Yah pramarit ho jata hai ki Sarva Sri Nilko Tiles Private Ltd., yah machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a categorical finding that the machines, which were obtained on lease from M/s. Northern India Tiles Corporation, Delhi, were purchased by the said firm for its own industrial unit, which fact establishes that the machines were, in fact, purchased for another industrial unit. On both grounds, the Tribunal has come to the conclusion that the assessee was not entitled to the grant of exemption under section 4A of the U.P. Trade Tax Act as it was not covered by the definition of new unit under the Explanation to section 4A. It may be recorded that in their exemption application (enclosed as annexure SA-I to the supplementary affidavit, specifically page 2 of the prescribed form) it has been handwritten that all are new machines . The statement so made in the application is now proved to be fake and therefore, cancellation of the exemption certificate cannot be faulted with. In the opinion of the court the findings of fact recorded by the Commissioner, Trade Tax, as well as by the Trade Tax Tribunal while cancelling the exemption certificate earlier granted to the assessee, cannot be said to be perverse or based on no evidence, so as to call for any interference under the revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Legislature wished to exclude availability of exemption from tax on the ground of ownership of the new unit, it would have specifically said so in some clause of the definition of 'new unit'. The matter would not have been left for speculation. the Legislature has now stepped in and has excluded the purchaser, licencee and lessee from section 4A and has confined their right for exemption only to the extent of unexpired period under section 4B. It is no doubt true that the exemption under section 4A of the U.P. Trade Tax Act is granted to the industrial unit and not to the person, who owns the industrial unit or who runs the industrial unit. The legal position in that regard has been explained in the case of Jagat Machinery Manufacturers Private Limited, Ghaziabad [1987] UPTC 1358, and Commissioner of Sales Tax, U.P. v. Goodluck Rubber and Allied Industries, Lucknow [1983] 53 STC 388 (All); [1983] UPTC 909. At the same time it has to be kept in mind that in all the judgments relied on behalf of the assessee, no transfer of the machines by the original purchaser to a third person claiming the exemption as new unit was involved. The case pleaded by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to purchasers, licencees, lessees of manufacturing units installed by the former manufacturer. Therefore, the conclusion that the purchase of old units where machines were installed and used by another company or firm could not be the basis for grant of exemption to the subsequent purchaser (assessee) under section 4A as it then stood, is fortified by the amendment, which has been incorporated by adding sub-section (2B) to section 4A by Amending Act No. 28 of 1991. In the facts of the case the assessee had never applied for exemption for the unexpired period on the ground that he had purchased old machinery at any point of time even after introduction of sub-section (2B) to section 4A. So far as the claims now set up by the assessee for the first time before this court in rejoinder with reference to section 4A(2B) of the U.P. Trade Tax Act is concerned, it may be recorded that such plea became available to the assessee at the time his appeal was pending before the Trade Tax Tribunal, inasmuch as section 4A(2B) as U.P. Act No. 28 of 1991 had been brought into the statute book in the year 1991. During all this period the revisionist-assessee did not claim any benefit under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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