Industrial exemption eligibility turns on statutory compliance, not the timing of Factory registration under the exemption scheme.

An industrial unit seeking exemption under section 4-A of the U.P. Sales Tax Act, 1948 could not be denied an eligibility certificate merely because its registration under the Factories Act, 1948 was obtained after production began. The governing enquiry is whether the unit is a new unit and whether it satisfies the statutory and notification conditions for exemption, including any registration requirement where prescribed. Once the required registration exists and the other conditions are fulfilled, the timing of that registration is not determinative. The High Court held that rejection of the application on delayed Factory registration alone was unsustainable and the unit remained entitled to the certificate.

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Issues: Whether an industrial unit seeking exemption under section 4-A of the U.P. Sales Tax Act, 1948 could be denied an eligibility certificate merely because its registration under the Factories Act, 1948 was obtained after the date on which the unit went into production.

Analysis: The relevant enquiry under section 4-A is whether the unit is a new unit and whether it satisfies the conditions prescribed by the statute and the notifications issued thereunder. Where the applicable notification requires registration under the Factories Act for units crossing the prescribed capital investment, the material consideration is compliance with that condition, not the date on which such registration was obtained. Once registration exists and the other statutory and notification conditions are fulfilled, the entitlement to the eligibility certificate cannot be defeated on the sole ground that the registration was granted after production began.

Conclusion: The rejection of the application on the ground of delayed registration under the Factories Act was unsustainable and the petitioners were entitled to the eligibility certificate.

Final Conclusion: The unit satisfied the conditions for industrial exemption, and the administrative authority could not refuse the benefit by treating the timing of Factory registration as determinative.

Ratio Decidendi: For eligibility under section 4-A of the U.P. Sales Tax Act, 1948, the decisive question is compliance with the statutory and notification conditions for a new unit, and not the mere chronology of registration under the Factories Act.

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