Statutory exemption under section 4-A and interest on refundable deposits were upheld, while the suo motu order was struck down.

A statutory exemption granted by the competent committee under section 4-A could not be displaced by a suo motu order under section 22 merely on a different view of the record; the exemption for chemicals and their derivatives was upheld. The note also states that, once the deposit made under the stay order became refundable in effect, the department was liable to pay interest on it as normal accretion on capital, and interest from the date of deposit was directed. The Tribunal's impugned order was quashed and consequential relief followed.

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Issues: (i) Whether the Trade Tax Tribunal was justified in exercising suo motu power under section 22 of the U.P. Trade Tax Act, 1948 to disturb its earlier remand order and whether the assessee's exemption facility under section 4-A extended to chemicals and their derivatives; (ii) whether interest was payable on the amount deposited pursuant to the stay order.

Issue (i): Whether the Trade Tax Tribunal was justified in exercising suo motu power under section 22 of the U.P. Trade Tax Act, 1948 to disturb its earlier remand order and whether the assessee's exemption facility under section 4-A extended to chemicals and their derivatives.

Analysis: The exemption facility had been granted by the statutory committee under section 4-A on the basis of the industrial policy and the notification dated 27 July 1991, and the committee's decision fixed the maximum tax benefit for the relevant unit. The record also showed that the committee later accepted that the facility applied to derivatives as well. In these circumstances, the assessing authority could not ignore the statutory grant of exemption or treat the matter as involving a mistake apparent from the record merely because the Tribunal had earlier remanded the matter. The order passed under section 22, which disturbed the earlier relief, was therefore not sustainable.

Conclusion: The Tribunal's order under section 22 was unsustainable, and the assessee's exemption claim for the chemicals and derivatives was upheld.

Issue (ii): Whether interest was payable on the amount deposited pursuant to the stay order.

Analysis: Once the assessee succeeded and the deposit was found refundable in effect, the amount retained by the department carried interest as normal accretion on capital. The Court applied the same principle that had been followed in the cited precedent and directed payment of interest on the deposited amount from the date of deposit.

Conclusion: Interest at 15 per cent per annum was directed to be paid on the deposited amount from the date of deposit.

Final Conclusion: The revision succeeded, the Tribunal's impugned order was quashed, and consequential monetary relief was granted in favour of the assessee.

Ratio Decidendi: Where a statutory exemption has been granted by the competent authority under section 4-A, the assessing authority or Tribunal cannot disregard that grant in the absence of a legally sustainable basis, and an order under section 22 cannot stand if it merely substitutes a different view without any true mistake apparent from the record.

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