New unit exemption under sales tax law denied where old machinery and same business continuity showed no qualifying notified industry.

Section 5CC of the Rajasthan Sales Tax Act, 1954 grants remission only to a registered dealer commissioning a notified industry within the prescribed period, and the notification excludes units using machinery already used elsewhere or existing factories merely extended to make the same goods. On the facts, the concern had earlier carried on the same business as a proprietary concern, later converted into a partnership firm, with substantially old machinery and continued manufacture of the same goods. The unit was therefore not treated as a new notified industry, and exemption under section 5CC was denied.

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Issues: Whether the petitioner was entitled to exemption under section 5CC of the Rajasthan Sales Tax Act, 1954 as a notified industry treated as a new unit.

Analysis: Section 5CC grants remission of tax to a registered dealer who commissions a notified industry within the prescribed period. The notification issued under that section treats all industries with new units as notified industries, but excludes a factory or workshop using machinery already used elsewhere and also excludes an existing factory or workshop that is merely extended or added to for manufacturing the same goods. On the facts, the industrial concern had been carrying on the same business earlier as a proprietary concern, later converted into a partnership firm, and the machinery used was substantially old. The finding was also that the same goods continued to be manufactured in the existing factory, so the case did not fall within the concept of a new unit under the notification. The partnership firm was also treated as a distinct legal entity from the earlier proprietary concern, which further negatived entitlement to the exemption as claimed.

Conclusion: The petitioner was not entitled to exemption under section 5CC of the Rajasthan Sales Tax Act, 1954. The issue was decided against the petitioner and in favour of the Revenue.

Final Conclusion: The claim for tax remission failed because the unit was not accepted as a qualifying new notified industry under the statutory notification.

Ratio Decidendi: A mere conversion of an existing business into a partnership firm, together with use of substantially old machinery and continuation of manufacture of the same goods, does not constitute a new unit entitled to exemption under section 5CC of the Rajasthan Sales Tax Act, 1954.

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