Liberal construction of exemption law requires proof of actual delivery before denying new machinery status and tax benefits.

Section 4-A exemption for a tax holiday incentive must be construed liberally, and a claim cannot be rejected by treating machinery as old without addressing actual delivery and the relevant material. The record showed that the previous buyer had closed business, never took delivery of the digestor, and delivery was made directly by the fabricator to the petitioner. As the remand directions on actual delivery were ignored, the finding that the machinery was old had no factual basis. The refusal of exemption and rejection of review were therefore illegal, and the petitioner was entitled to the eligibility certificate and consequential tax benefits.

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Issues: Whether the petitioner was entitled to exemption under section 4-A on the footing that the digestor was new machinery, and whether the rejection of the review application was arbitrary and illegal.

Analysis: Section 4-A is intended to grant tax holiday or exemption to encourage new industries and must be construed liberally. The material on record showed that M/s. Nanda Chemicals had closed its business before the relevant transaction, had not taken delivery of the digestor, and that delivery was made directly by the fabricator to the petitioner. The earlier remand required the authority to address the specific question of actual delivery, but that question was ignored. In these circumstances, the finding that the machinery was old had no factual basis, and the rejection of the review application was unsupported by the record.

Conclusion: The machinery was new, the rejection of exemption was illegal, and the petitioner was entitled to the eligibility certificate with consequential benefits.

Final Conclusion: The writ petition succeeded and the impugned orders refusing exemption were set aside, resulting in grant of the claimed tax benefit.

Ratio Decidendi: A claim under section 4-A cannot be rejected by branding machinery as old without addressing the decisive question of actual delivery and without considering the relevant material; the provision, being incentive-oriented, requires liberal construction.

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