Sales tax exemption for expanded industrial units on the same land was upheld under rule 28B.

Sales tax exemption under rule 28B of the Haryana General Sales Tax Rules was upheld where units III and IV were constructed on the same land after the first unit and used for the same product. The later units were treated as expansion of the existing industrial undertaking, not as independent units, and therefore fell within rule 28B(d). As the conditions in the proviso to rule 28B(3)(a) were satisfied, exemption could not be denied and the manufacturer remained entitled to the benefit.

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Issues: Whether units III and IV, constructed on the same land after the setting up of the first unit, satisfied the conditions of rule 28B(3)(a) of the Haryana General Sales Tax Rules, 1975 so as to entitle the manufacturer to sales tax exemption, and whether the Tribunal's order was contrary to rule 28B.

Analysis: The exemption had already been granted for the first unit after considering only the land utilised for that unit. The later units were found to be further expansions raised on the same piece of land, with the same product being manufactured in the expanded units as in the earlier units. On that basis, the construction of units III and IV was treated as expansion falling within rule 28B(d), and not as an independent industrial unit. Since the conditions in the proviso to rule 28B(3)(a) were held to be fulfilled, the claim for exemption could not be denied.

Conclusion: The manufacturer was entitled to sales tax exemption, and the reference was answered in favour of the assessee and against the Revenue.

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