Gross value of fixed assets includes part payments for premises and firm-name purchases used in the industrial unit.

Under the West Bengal Sales Tax Act, part payments made during the exemption period towards acquisition of premises used by an industrial unit were treated as admissible investment forming part of the "gross value of fixed assets", even though the conveyance was registered later. Purchase in the name of a registered partnership firm was also attributable to the dealer, since the firm name represented the partners and the premises formed part of the manufacturing unit. The rejected investment was therefore required to be included in the fixed-asset value, and exemption entitlement had to be redetermined accordingly.

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Issues: (i) Whether part payments made towards acquisition of premises during the currency of exemption could be treated as investment forming part of the "gross value of fixed assets" under section 39(4) and Explanation (a) of the West Bengal Sales Tax Act, 1994; (ii) Whether purchase of the premises in the name of a registered partnership firm could be treated as investment by the dealer for the purpose of extending the tax exemption limit.

Issue (i): Whether part payments made towards acquisition of premises during the currency of exemption could be treated as investment forming part of the "gross value of fixed assets" under section 39(4) and Explanation (a) of the West Bengal Sales Tax Act, 1994.

Analysis: The expression "gross value of fixed assets" in the Explanation covers price or premium paid for land and expenditure incurred for the industrial unit, and the provision is to be read as a whole to advance its object. The relevant consideration is not whether the entire price was paid at one time, but whether payments were made towards an asset ultimately acquired by registered conveyance and used for the unit. Part payments made before the exemption ceiling was exhausted, if referable to a duly purchased premises used for manufacturing, constitute admissible investment.

Conclusion: Such part payments were to be taken into account as admissible investment and could not be excluded merely because the conveyance was registered later.

Issue (ii): Whether purchase of the premises in the name of a registered partnership firm could be treated as investment by the dealer for the purpose of extending the tax exemption limit.

Analysis: A partnership firm is not a separate legal entity in the strict sense and its name is a collective description of the partners. Purchase in the firm name, particularly where the deed itself recognises the partners as purchasers and the firm is registered, is in substance purchase by the partners. The objection that the premises was a flat in a multi-storeyed building or that exclusive ownership of the entire land was absent was held irrelevant, since the material question was whether the premises formed part of the industrial unit and was used for manufacturing.

Conclusion: The investment made for purchase of the premises in the firm name was properly attributable to the dealer and was eligible for consideration under the exemption scheme.

Final Conclusion: The impugned orders were unsustainable, the rejected investment had to be included in the gross value of fixed assets, and the exemption entitlement was required to be redetermined accordingly in the assessee's favour.

Ratio Decidendi: For determining "gross value of fixed assets" under the exemption provision, part payments made during the exemption period towards acquisition of premises ultimately used by the industrial unit are admissible investment, and a purchase in the name of a partnership firm is attributable to the constituent partners when the firm acts as the purchasing vehicle.

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