Strict construction of exemption law: machinery acquired for use in another factory disqualifies a unit from "new unit" status.

A unit did not qualify as a "new unit" under section 4-A of the U.P. Sales Tax Act where its machinery had been acquired for use in another factory or workshop in India, even though that machinery had not actually been used there. The expression "acquired for use" was treated as a distinct disqualifying condition from "already used", and the provision was read strictly according to its plain language. The Court held that no additional words could be read in to confine the clause to an existing factory or workshop, and that substantial compliance could not override the statutory text.

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Issues: Whether a factory or workshop qualifies as a "new unit" under section 4-A of the U.P. Sales Tax Act, 1948 when it uses machinery that had been acquired for use in another factory or workshop in India, even if that machinery had not actually been used there.

Analysis: The expression "acquired for use" in clause (a) of the Explanation to section 4-A was held to be distinct from "already used" and both expressions were given separate meaning. The provision was construed according to its plain language, and the words "acquired for use" were treated as creating a disqualification irrespective of actual prior use in the other factory or workshop. The Court further held that an exemption provision must be strictly construed, that no words could be added to confine the clause to an "existing" factory or workshop, and that substantial compliance could not override the clear statutory text.

Conclusion: The unit was not entitled to be treated as a "new unit" merely because the machinery acquired from another concern had not actually been used there; the disqualification applied once the machinery had been acquired for use in another factory or workshop in India.

Ratio Decidendi: In an exemption provision, where the statutory language is clear, "acquired for use" is an independent disqualifying condition distinct from "already used", and actual prior use in the other factory or workshop is not required.

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