Contemporaneous business assessment can defeat an expansion claim and support eligibility certificate for a new manufacturing unit.

Contemporaneous assessment of the dealer's business activity for the relevant period was given due weight, and on that basis the unit was treated as carrying on resale of medicines only till 31 December 1981, with manufacture confined to hair-oil during that period. The tribunal held that the Uttarpara unit could not be characterised as a mere expansion of an earlier homeopathic medicine unit because the earlier manufacturing activity was not established for that period. The endorsed registration certificate under the industrial registration regime supported treatment of the unit as eligible under the notification, and the applicant was entitled to an eligibility certificate for manufacture of hair-oil and livasol from 4 September 1981.

---

---

Issues: Whether the applicant was entitled to an eligibility certificate under section 4AA of the West Bengal Sales Tax Act, 1954 for the unit manufacturing hair-oil and livasol from 4 September 1981, and whether that unit was merely an expansion of an earlier industrial unit.

Analysis: The assessment order for the relevant period was given due weight, and on that basis the applicant was treated as carrying on resale of medicines till 31 December 1981, with manufacturing activity confined to hair-oil during that period. On that footing, the finding that the Uttarpara unit was an expansion of an earlier unit manufacturing homeopathic medicines was not sustainable. The registration certificate of the Cottage and Small Scale Industries Directorate, as ultimately endorsed, supported the view that the new unit could be treated as registered under the relevant notification. Since the controversy centred on the manufacture of hair-oil and livasol from 4 September 1981, the unit was held fit for eligibility certificate for that activity.

Conclusion: The applicant was entitled to an eligibility certificate for the unit manufacturing hair-oil and livasol with effect from 4 September 1981, and the contrary orders were set aside.

Ratio Decidendi: For grant of an eligibility certificate under the sales tax incentive scheme, the contemporaneous assessment of the dealer's business activity for the relevant period must be accorded due weight, and a unit cannot be treated as an expansion of an earlier industrial unit unless the earlier manufacturing activity is established for that period.

---