Sales tax exemption depends on actual commercial production date, not unsupported inference from trial production.

Exemption under the industrial incentive notification turned on the date of actual commencement of commercial production, not a disputed reference to trial production. The authority's adverse finding that production began before the cutoff date was unsupported by the record, which showed only trial production, commercial electricity use starting later, no evidence of raw material purchases for commercial production before the cutoff, and a departmental recommendation consistent with post-cutoff commencement. The exemption claim was therefore upheld because the finding of pre-cutoff production was contrary to the material on record.

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Issues: Whether the appellant was entitled to sales tax exemption under the notification issued under section 4-A of the Uttar Pradesh Sales Tax Act, 1948 on the ground that its unit commenced production after the relevant cutoff date.

Analysis: The exemption scheme under section 4-A was intended for new industrial units commencing production within the specified period, and the relevant date had to be determined with reference to actual commencement of commercial production, not a stray or disputed reference to trial production. The adverse finding of the Committee rested on an assumption that a certificate referring to trial production on 4 December 1981 proved commencement of production before 1 October 1982. The record, however, showed that the appellant's case was of only trial production, that commercial use of electricity commenced only in November 1982, that no material showed purchase of raw material sufficient for commercial production before the cutoff date, and that the departmental recommendation supported commencement of production in December 1982.

Conclusion: The rejection of the exemption claim was unjustified and the appellant was entitled to the exemption under the notification.

Final Conclusion: The assessee's entitlement to sales tax exemption was upheld because the finding of pre-cutoff commencement of production was unsupported by evidence and contrary to the material on record.

Ratio Decidendi: Where exemption under an industrial incentive scheme depends on the date of commencement of production, the authority must base its decision on evidence of actual commercial production and not on an unsupported inference from alleged trial production.

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