9911796707
TMI Blog2011 (11) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. That the petitioner has established a new unit for the manufacturing of stone grits. The production has been started on January 31, 1986 and the first sale was made on December 3, 1986. 3. That inasmuch as the number of workers were less than 10, at the time of starting of the production, the petitioner could not apply for registration under the Factories Act inasmuch as in view of section 2(m) of the Indian Factories Act, the registration under the Factories Act is only required, in case the number of workers are more than 10. In case the number of workers in the factory are less than 10, neither there is any obligation to get the registration under the Factories Act nor, the authorities under the Indian Factories Act are granting registration. 4. That when number of workers exceeded more than 10, the petitioner applied for registration under the Factories Act on November 24, 1988 and accordingly the registration under the Factories Act has been granted with effect from November 24, 1988. The Divisional Level Committee empowered to consider and recommend for exemption, in its meeting dated March 26, 1992 considering the condition of registration under the Factories A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er may enjoy the full period of exemption effective from the date of registration, the latter will be denied the full period and would be entitled to the benefit for the curtailed period only. At the same time, it held that it was not necessary to declare the provision to be ultra vires the Constitution because the reading down of clause (c) would be that it is directory and not mandatory in character. We are afraid that the Division Bench failed to visualise that even if the word 'shall' in clause (c) of sub-section (5) of section 4A is read as 'may' the discretion would be with the authorities to grant or refuse the benefit taking the relevant date as the date of registration. That would permit the authorities to act in an arbitrary manner where in a certain situation they may grant the benefit to an unregistered unit and in others they may refuse. We do not see any reason why the word 'shall' should not be given the meaning it ordinarily carries because we do not think that there is any discrimination of the type envisaged by the High Court. Even if the provision was taken to be directory and if the State refused to grant the benefit for the period during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the industrial unit of the petitioner did not fall within the definition of factory under section 2 (m) of the Factories Act. Section 2(m) with Explanation is quoted as below: 2(m) 'factory' means any premises including the precincts thereof (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, but does not include a mine subject to the operation of (the Mines Act, 1952 (35 of 1952)) or (a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place). Explanation I. For computing the number of workers for the purposes of this clause all the workers in (different groups and relays) in a day shall be taken into account; Explanation II. For the purposes of this clause, the mere fact that an elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further that the occupier shall, before he begins or continues to use any premises as a factory, obtain a licence or renewal thereof, in accordance with the provisions of these Rules. The scheme of the Factories Act, 1948 and the U.P. Factories Rules, 1950 shows that the permission of the State Government or Chief Inspector has to be obtained for the construction or extension of the factory on the proposed site, and further a restriction is placed on the occupier to obtain licence or renewal thereof before he begins or condition to use premises as factory. In the scheme of the Act and the Rules, it cannot be said that there may be any chance of delay in registration of new factory, which will defeat object of granting exemption to new unit for payment of sales tax. The restrictions are wholesome and do not provide a factory to be established or to be used unless the permission and the registration or licence is granted. Before proceeding to consider the question remitted by the honourable Supreme Court, we may observe here that the judgment in Kuchchal Industries [1990] UPTC 481 appears to have been accepted by the State Government, as it is evidenced from the amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to ascertain the date of production as well as the date of first sale. The State Government did not plead in the past that the exemptions are required to be given to only those industries, which have more than 10 workers. The U.P. Sales Tax Act is legislation related to trade and commerce. It is not a legislation in which requirement of more than 10 workers in industrial unit may be accepted for exemption as a labour welfare measure. Where a new unit does not employ 10 or more than 10 workers it is not factory as defined under section 2(m) of the Factories Act, 1948, and thus does not require registration under section 6 of the Factories Act, 1948. In such case requirement of applying for registration and getting registration and licence as pre-condition of grant of eligibility certificate is not necessary. Where the legislation by reference provides for the requirement, to be complied with in law, which is not insisted by the Act to which reference has been made, it is not necessary to comply with that condition. The law does not insist upon something, which is not permissible or provided in the statute. We are of the opinion that where a unit employs less than 10 worke ..... X X X X Extracts X X X X X X X X Extracts X X X X
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