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TMI Blog1987 (10) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... chine was fabricated for purposes of sale before October 1, 1982. 3. Under Section 4-A of the U.P. Sales Tax Act, the State Government issued a notification dated September 30, 1982. Under it the State Government came out with a scheme for grant of exemption from payment of sales tax to the new Units set up in the State. The Company made an application on the prescribed form for grant of exemption under Section 4-A before the General Manager, District Industries Centre, Ghaziabad. This application was rejected by an order dated June 4, 1986. The order was assailed before this Court in Civil Misc. Writ petition No. 729 of 1986 : Messrs Jagat MachineryManufacturers v. State of U.P. and others (reported in 1986 U.P.T.C. 1387). The petition was disposed of by this Court on August 5, 1986 by a Division Bench with the direction that the application, which had been rejected by the District Level Committee, may be considered by the appropriate authority, namely, the Divisional Level Committee. On October 4, 1986, the application was rejected again. The order was challenged once again in a petition under Article 226 of the Constitution. The Writ Petition (No. 304 (Tax) of 1987, Messrs Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Directors of the Company and all the assets and liabilities of the firm have been taken over by the Company would make no difference in the matter because the power connection, which was given in the name of the firm, could not be treated to be power connection obtained by the Company which was necessary to entitle the company to get an Eligibility certificate. 7. The second reason given in the impugned order is that from the list of machinery filed by the petitioner, it appeared that 16 machines had been purchased by the partnership firm prior to November 1, 1982 and only two machines had been purchased in the name of the Company after that date. The Government Order dated September 30, 1982 showed that a new Unit meant the unit in which such machines were used which had not been used in any other Unit in the country nor were purchased for use in such other Unit in the country. In the case of the petitioner, the purchase of 16 machines was for the use of old partnership firm. Irrespective, therefore of the fact that they had not actually been used, the circumstance that they had been purchased by the partnership firm for use was enough to take the view that they v ere old mach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such of those goods only as are manufactured in a new unit, the date of starting production whereof falls on or after the first day of October 1982, or (c) only if the manufacturer had not discontinued production of such goods for a period exceeding six months at a stretch, (d) only if the manufacturer furnishes to the assessing authority an Eligibility Certificate granted by such Officer, in accordance with such procedure, as may be specified. (3) Where the Commissioner of Sales Tax is of the opinion that facility of exemption from, or reduction in the rate of tax obtained on the basis of an Eligibility Certificate referred to in clause (d) of sub-section (2) has been misused in any manner whatsoever, he may, by order in writing, cancel the Eligibility Certificate from such date, whether before or after the date of such order, as may be specified therein : Provided that no order under this sub-section shall be passed without giving the dealer concerned a reasonable opportunity of being heard. Explanation : Explanation : (i) 'new unit' means a factory or workshop whether set up by a dealer already having an industrial unit manufacturing the same goods at an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantive piece of legislation through which the legislature had expressed its intention laying down the meaning to be given to a particular term used by it. Applying this principle, the Court held in Smt. Samundri Devi and etc. v. Nand Kishor Marwah and others, 1987 All. LJ 255 that where, irrespective of the reality,the Legislature had unmistakably provided for assumption of the date of completion of the construction of 00. building in Explanation ITO to Section 2 (2) of the Act (U.P. Act 13 of 1972) it is immaterial whether the landlord admits or avera to a date of completition of construction of the building different from the one contemplated by the fiction. This decision was given by one of us (V.K. Mehrotra, J.) A.N. Verma, J. agreed with it in Punjab and Sindh Bank v. Smt. Shanti Devi, 1987 All. LJ 757. 11. The 'date of starting production' in regard to a new unit must, therefore, be found out by making an enquiry into the question as to the date on which any raw material required for use in the manufacturer or packing of the goods is purchased for the first time and the date of installation of power connection, where needed, whichever is later. In the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation (i) to Section 4-A excludes from the definition of a 'new unit' any factory or workshop using machinery, accessories or components already used or acquired for use in any factory or workshop in India. This clearly means that if any machinery is acquired for use in the factory which is the new unit and the machinery had not been acquired for use in any other factory in India, the fact of acquisition of the machinery by the earlier owner would not render the owner of the new unit ineligible for grant of an Eligibility Certificate under Section 4-A. 14. In the present case, the finding of the Divisional Level Committee is that the list of machineries showed that 16 items of machinery had been purchased by the old partnership firm prior to November 1, 1982 and only two had been purchased in the name of the Company after that date. There is no finding that 16 machines had been purchased by the partnership firm for use in any other factory or workshop in India and that they were not acquired for use in the factory/workshop that was now being set up. The impugned order of the Divisional Level Committee proceeds upon an erroneous impression about the legal position. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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