Corporate separateness defeats denial of trade tax exemption where only a director owns the existing manufacturing unit.

Exemption under section 4-A of the U.P. Trade Tax Act could not be denied to a new company merely because one of its directors owned an existing unit manufacturing the same goods. The Explanation targeted cases where the same person establishing the new unit also had a prescribed interest in the old factory or workshop; a separate corporate entity was not disqualified by a director's independent ownership alone. In the absence of material justifying lifting the corporate veil or showing that the company was a mere one-man concern, the exclusionary clause did not apply and the company remained entitled to exemption.

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Issues: Whether exemption under section 4-A of the U.P. Trade Tax Act could be denied to a new company merely because one of its directors owned the existing unit manufacturing the same goods.

Analysis: The Explanation to section 4-A excluded exemption where the same person who established the new unit had an interest as proprietor, partner, agent, promoter, holding company or subsidiary in the existing factory or workshop. The petitioner-company was a separate juristic person. The mere fact that one of its directors owned the existing unit did not, by itself, establish that the company as such had an interest in that unit. The underlying object of the provision was to deny repeated exemption to the same person, not to disqualify a new unit where only an individual director had an independent interest in the existing concern. No material was shown to justify lifting the corporate veil or to prove that the company was a mere one-man show of the director.

Conclusion: Denial of exemption was unjustified. The petitioner-company was entitled to exemption under section 4-A.

Ratio Decidendi: For disqualification under the exclusionary clause of section 4-A, the new unit itself must have the prescribed interest in the existing unit; ownership of the existing unit by a director of the company is not enough.

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