Directorship alone cannot make a separately established unit a second unit and bar eligibility for tax incentive benefits.

Mere directorship in a company that had earlier enjoyed a tax holiday did not, by itself, justify treating a separately established manufacturing unit as a second unit for denying incentive benefits. The unit was set up at a different address with new plant and machinery, and the applicant was a distinct legal entity from the company in which he served as director. On that basis, the refusal of the eligibility certificate was unsustainable, and the unit was recognised as a new industrial unit entitled to the statutory incentive under the relevant notification.

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Issues: Whether the applicant was entitled to an eligibility certificate under section 4AA of the West Bengal Sales Tax Act, 1954 and the relevant notification, or whether the unit could be treated as a second unit of an earlier concern so as to deny the tax holiday.

Analysis: The applicant had set up a manufacturing unit at a separate address with new plant and machinery, and the fact that he was a director of another company which had earlier enjoyed tax holiday did not by itself establish that the present unit was a continuation or a second unit of that company. The finding that the earlier concern's sales had fallen was not supported by the materials on record. The applicant, as an individual dealer, was a distinct legal entity from the company in which he was a director, and there was no legally sustainable basis to refuse eligibility merely on that association.

Conclusion: The applicant's unit was a new industrial unit within the meaning of the notification, and the refusal of the eligibility certificate was unsustainable.

Final Conclusion: The impugned orders were set aside and the applicant was held entitled to the eligibility certificate and consequential revision of assessment, with the application allowed on contest.

Ratio Decidendi: Mere directorship in a company that previously enjoyed tax holiday does not, without more, make a separately established unit of the individual a second unit so as to deny statutory eligibility for incentive benefits.

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