Tax-exemption eligibility turns on direct use of another unit's brand; collateral rebranding by others does not disqualify relief.

A newly set up small-scale industry was not disqualified under the tax-exemption notification merely because its television sets were later re-branded by others; the relevant condition was violated only if the applicant itself used the trade-mark or brand name of an existing industrial unit, and that direct use was not shown. Rejection of the application was also held unsustainable because the authorities relied on collateral assumptions and an enquiry into an alleged understanding among concerns that the notification did not authorise, amounting to an erroneous exercise of jurisdiction and considerations outside the notification. The impugned orders were set aside and the tax benefit was directed to be granted.

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Issues: (i) whether the applicant's use of the goods chain involving a later affixation of another brand name amounted to use of the trade-mark or brand name of an existing industrial unit so as to disqualify it from eligibility under the notification; (ii) whether the rejection of the application was vitiated by want of bona fides, jurisdictional error or extraneous considerations.

Issue (i): whether the applicant's use of the goods chain involving a later affixation of another brand name amounted to use of the trade-mark or brand name of an existing industrial unit so as to disqualify it from eligibility under the notification.

Analysis: The relevant condition in Notification No. 1177 F.T. dated March 31, 1983 excluded only a newly set up small-scale industry that used the trade-mark or brand name of any product of an existing industrial unit. The applicant manufactured the television sets in its own unit and sold them under its own brand name before any later resale and re-branding by others. The mere fact that the sets ultimately reached consumers with another brand affixed at a later stage did not establish that the applicant itself used the brand name of an existing industrial unit.

Conclusion: The condition was not violated, and the applicant was not disqualified on this ground.

Issue (ii): whether the rejection of the application was vitiated by want of bona fides, jurisdictional error or extraneous considerations.

Analysis: The material did not show that the transfer of the case was mala fide or that the order was passed under improper influence. At the same time, the authorities went beyond the scope of the notification by treating an alleged understanding among different concerns as decisive, even though the notification did not authorise such an enquiry. The rejection therefore rested on an erroneous exercise of jurisdiction and on considerations outside the governing notification.

Conclusion: The rejection was vitiated and could not stand.

Final Conclusion: The impugned orders were set aside and eligibility for the tax benefit was directed to be granted to the applicant.

Ratio Decidendi: Disqualification under a tax-exemption notification must be founded on a direct violation of the specified condition, and authorities cannot deny relief on the basis of collateral assumptions or enquiries not authorised by the notification.

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