Eligibility certificate under sales tax law cannot be denied merely because a manufacturer also trades in raw materials.

A manufacturer of oil was held not to lose eligibility under section 4-A of the U.P. Sales Tax Act merely because it also traded in oil-seeds. The text states that section 4-A contains no condition disqualifying a unit from exemption simply due to separate trading activity in a different commodity, and the Commissioner's circular did not bar exemption where trading was limited to raw material rather than the manufactured product. As no valid ground was shown to deny the benefit, the refusal of the eligibility certificate was treated as based on irrelevant considerations and the certificate was required to be issued.

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Issues: Whether the petitioner was disentitled to an eligibility certificate under section 4-A of the U.P. Sales Tax (now Trade Tax) Act, 1948 merely because it also carried on trading in oil-seeds, and whether the rejection of the application could be sustained in the light of the Commissioner's circular.

Analysis: The petitioner had established a new manufacturing unit for oil, and the only reason for rejection was that it also carried on trading in oil-seeds. Section 4-A did not impose any condition that a manufacturer would lose exemption merely because it also conducted trading business in a different commodity. The circular of the Commissioner of Trade Tax likewise did not prohibit exemption where the trading activity was confined to raw material and not the product manufactured by the unit. The respondents did not show that the petitioner was trading in the manufactured product or that any other valid ground existed to deny the certificate.

Conclusion: The refusal of the eligibility certificate was based on irrelevant considerations and could not be sustained. The petitioner was entitled to exemption and the respondents were required to issue the eligibility certificate under section 4-A.

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