Industrial exemption under section 4-A: permanent registration treated as directory, with exemption running from first sale.

Under section 4-A, the requirement of permanent registration was treated as directory where the assessee had applied before commencement of production and had substantially complied with the exemption conditions. Delay in issuing the permanent registration order, when attributable to the authority, did not defeat entitlement to industrial exemption. The scheme and amended definition of a new unit were read liberally to advance industrial development, and the eligibility certificate was held to operate from the date of first sale. The certificate was to be corrected so that the exemption period ran for four years from that date.

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Issues: Whether the requirement of permanent registration for grant of exemption under section 4-A and the corresponding notification was mandatory or directory, and whether the eligibility certificate ought to take effect from the date of first sale.

Analysis: The unit had applied for registration before commencement of production and the delay in issuance of the permanent registration order was attributable to the authority. The scheme of section 4-A, the amended definition of a new unit, and the notification were construed in light of the object of promoting industrial development. A liberal construction beneficial to the assessee was preferred, and the requirement of permanent registration was treated as a condition for grant of exemption rather than a mandatory bar where the substantive conditions had already been met. The cited precedent on section 4-A(5)(c) also supported the view that similar compliance requirements were directory.

Conclusion: The requirement of permanent registration was directory, and the petitioner was entitled to exemption from the date of first sale, with the eligibility certificate to be modified accordingly.

Final Conclusion: The writ petition succeeded, and the eligibility certificate was directed to be corrected so that the exemption ran for four years from the date of first sale.

Ratio Decidendi: Where an assessee has substantially complied with the conditions for industrial exemption under section 4-A, a delayed order of permanent registration by the authority does not defeat entitlement to exemption if the statutory requirement is directory in character.

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