Octroi exemption limits under the Faridabad Complex notification turned on capital investment, new-unit status, and independent appellate scrutiny.

The octroi exemption notification under the Faridabad Complex Act applied only to specified industrial units meeting defined capital-investment limits, and "capital investment" included land, building, plant, machinery and equipment. On that basis, the unit's investment exceeded the prescribed threshold, so it did not qualify for exemption. The claim that a later television-manufacturing activity created a separate new industrial unit was rejected because the same legal entity continued, and the record also showed an earlier commencement date inconsistent with the requirement that a new unit be set up or come into production on or after 1 November 1983. The appellate authority's reliance on departmental opinion was criticised as an abdication of quasi-judicial duty.

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Issues: Whether the industrial unit was entitled to exemption from payment of octroi under the notification dated 5 April 1985 issued under section 21(3) of the Faridabad Complex (Regulation and Development) Act, 1971.

Analysis: The exemption notification applied only to specified industrial units, namely those in the backward area with capital investment up to one crore rupees and those in other parts of the Faridabad Complex with capital investment up to fifty lakhs. The expression "capital investment" included land, building, plant, machinery and equipment, and on that basis the unit's investment exceeded the prescribed limit. The claim that a later television-manufacturing activity constituted a separate "new industrial unit" was rejected because the unit remained the same legal entity and the record also showed an earlier starting date inconsistent with the statutory requirement that a new unit be set up or come into production on or after 1 November 1983. The appellate authority's refusal to decide the matter independently and its deference to departmental opinion was held to be an abdication of quasi-judicial duty.

Conclusion: The unit was not entitled to exemption from octroi under the notification, and the order granting exemption was unsustainable.

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