Purposive construction of industrial exemption conditions protects genuinely new units despite incidental old machinery.

Section 4-A of the U.P. Sales Tax Act, 1948 was construed purposively to advance the setting up of genuinely new industrial undertakings, and the Explanation's machinery condition was treated as ancillary to that object. A small or incidental old item of machinery, such as a weighing machine not forming an essential part of the production process, could not by itself defeat eligibility where the unit was otherwise new. On that reading, the rejection of the eligibility certificate was unsustainable and the petitioner was entitled to the exemption benefit.

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Issues: Whether the petitioner was entitled to an eligibility certificate under section 4-A of the U.P. Sales Tax Act, 1948 despite the objection that one item of machinery, namely a weighing machine, was old and had been treated as not qualifying for the exemption.

Analysis: The statutory scheme of section 4-A was held to be directed to the establishment of a new industrial undertaking, and the conditions in the Explanation were treated as ancillary to that object. The requirement in clause (1)(d) that machinery, accessories or components should not already have been used in another factory was read in a reasonable and purposive manner. The Court held that a small or incidental old item, especially one not forming an essential part of the production process, could not defeat the benefit meant for a genuinely new unit. A liberal approach was preferred, supported by the principle that exemption provisions intended to promote industrial development should not be defeated by hypertechnical or narrow construction.

Conclusion: The petitioner was entitled to the eligibility certificate, and the impugned orders rejecting and reviewing the claim were unsustainable.

Final Conclusion: The writ petition succeeded, the rejection of the exemption claim was set aside, and the authorities were directed to grant the benefit under section 4-A.

Ratio Decidendi: Under section 4-A of the U.P. Sales Tax Act, 1948, exemption conditions must be construed purposively so that a genuinely new industrial unit is not denied relief merely because an incidental or insubstantial old item of machinery is present.

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