Exemption for expansion units is computed on annual turnover above base production, not only from the date base production is reached.

An exemption notification under section 4-A of the U.P. Trade Tax Act, 1948 granted relief to units undertaking expansion or modernisation on turnover of goods manufactured in excess of base production. The Court held that, read with the definition of assessment year, entitlement had to be computed on the basis of the entire assessment year, not from the date base production was first achieved. Monthly returns and interim tax payments did not change that annual computation. Exemption therefore applied to the year's turnover above base production, rather than only to sales made after base production was reached.

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Issues: Whether, under the exemption notification issued under section 4-A of the U.P. Trade Tax Act, 1948, a dealer undertaking expansion or modernization is entitled to exemption on the turnover of sales for the whole assessment year after deducting base production, or only on sales effected after the base production is actually achieved.

Analysis: The notification granted exemption to units undertaking expansion or modernization on the turnover of sales of goods manufactured in excess of base production. Clauses 6(a) and 6(b) showed that the turnover of sales in any assessment year, to the extent covered by base production, was to be treated as base production turnover, and exemption was available only on the turnover in excess of that quantity. Reading the notification along with the definition of assessment year in section 3(j), the relevant unit of computation was the entire assessment year, not the point of time when base production was first achieved. Monthly returns and interim tax payments did not alter the character of the final annual assessment.

Conclusion: The assessee was entitled to exemption on the turnover of sales for the assessment year in excess of base production, and not merely on sales made after the date on which base production was achieved.

Ratio Decidendi: Where an exemption notification ties relief to turnover in excess of base production for an assessment year, the entitlement must be determined on the basis of the annual turnover of that year and not by reference to the date on which base production is reached.

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