Exemption under section 4-A begins only when lease conditions are satisfied, not before, for the remaining notified period.

A unit established on rented premises becomes eligible for exemption under section 4-A of the U.P. Sales Tax Act only when the statutory lease requirements are satisfied. Applying section 107 of the Transfer of Property Act and the object of promoting industrial growth, the court noted that where the prescribed conditions are fulfilled after the notified period has begun, exemption is available only for the remaining portion of that period from the date of compliance. As the lease was registered on 6 August 1991, the statutory condition was met from that date, and the petitioners were entitled to exemption from then onward.

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Issues: Whether the petitioners were entitled to exemption under section 4-A of the U.P. Sales Tax Act from the date on which the lease deed was later registered, and whether the refusal of exemption for the relevant period was sustainable.

Analysis: The dispute turned on the requirement that, where the industrial unit is established on rented premises, the lease must satisfy the statutory condition of duration and effectiveness. Reference was made to section 107 of the Transfer of Property Act and to the object of section 4-A of the U.P. Sales Tax Act, namely promotion of industrial growth. The proviso governing units which fulfil the prescribed conditions after commencement of the notified period makes such a unit eligible to be treated as a new unit only for the remaining part of the exemption period, computed from the date on which all statutory conditions are fulfilled. Since the lease was admittedly registered on 6 August 1991, the statutory condition stood satisfied from that date.

Conclusion: The petitioners were entitled to the benefit of section 4-A of the U.P. Sales Tax Act with effect from 6 August 1991, and the orders rejecting the claim were set aside.

Ratio Decidendi: Where the statutory conditions for exemption under section 4-A are fulfilled after the commencement of the notified period, the unit becomes entitled to exemption only from the date of fulfilment of those conditions and for the remaining part of the notified period.

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