Sales tax exemption for new industrial units depends on production and sale by the unit, not ownership, under the notification.

A sales tax exemption under S.R.O. No. 968/80 for goods produced and sold by new small-scale industrial units depends on production and sale by the unit, not on ownership of the unit. The notification, issued under section 10 of the Kerala General Sales Tax Act, 1963, did not restrict the benefit to an owner-investor and applied to the relevant class of goods. A lessee who runs the unit and controls its operations may therefore claim the exemption, subject to the notification's conditions, including the ceiling linked to fixed capital investment.

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Issues: Whether a person running a new industrial unit as lessee, and not as owner, is entitled to exemption from sales tax under S.R.O. No. 968/80 issued under section 10 of the Kerala General Sales Tax Act, 1963.

Analysis: The notification granted exemption in respect of tax payable on the turnover of the sale of goods produced and sold by new industrial units under the small-scale industries, subject to the stipulated conditions. The relevant criterion was whether the goods were produced and sold by the unit, not whether the operator was the owner of the unit. Section 10 empowered the Government to grant exemption either in respect of specified goods or by specified classes of persons, and the notification in question fell within the former category. The language of the notification contained no restriction confining the benefit only to the owner who had invested in the unit. The concession was also controlled by the ceiling linked to the fixed capital investment of the unit, leaving no basis for a separate or expanded claim based on ownership.

Conclusion: A lessee running the industrial unit with control over its operations is entitled to the exemption, and the Revenue's objection was untenable.

Ratio Decidendi: Where an exemption notification grants relief to goods produced and sold by a new industrial unit, entitlement depends on the unit's operation and production, not on ownership of the unit, unless the notification expressly imposes such a restriction.

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