Fixed capital investment can include indispensable bottling equipment; unchallenged exemption relief cannot be set aside without reasons.

Glass bottles and crates used in a captive soft drink bottling process were treated as fixed capital investment because the statutory definition extended beyond plant and machinery to apparatus necessary for running the factory; the items were indispensable to collection, containment and handling of the finished product, so they qualified under the U.P. Trade Tax Act. The Tribunal's interference with the review order extending the exemption period from ten to fifteen years was also unsustainable because that part of the order was unchallenged and lacked supporting reasons. The assessee's exemption, including the treatment of bottles and crates as fixed capital investment, was upheld.

---

---

Issues: (i) Whether glass bottles and crates used in the manufacture and bottling of soft drinks formed part of "fixed capital investment" as apparatus under Explanation (4)(b)(i) to Section 4A of the U.P. Trade Tax Act, 1948; (ii) Whether the Tribunal was justified in setting aside the review order and the consequent extension of the exemption period from ten years to fifteen years.

Issue (i): Whether glass bottles and crates used in the manufacture and bottling of soft drinks formed part of "fixed capital investment" as apparatus under Explanation (4)(b)(i) to Section 4A of the U.P. Trade Tax Act, 1948.

Analysis: The definition of fixed capital investment under the U.P. Trade Tax Act is wider than a narrow reference to plant and machinery, as it expressly includes apparatus, components, moulds, dyes, jigs and fixtures, and investment in items necessary for establishing or running the factory. On the facts, the bottling process in a captive soft drink unit is a continuous manufacturing process in which bottles and crates are indispensable for collection, containment and handling of the finished product. Those items therefore answer the description of apparatus for the purpose of the statutory definition.

Conclusion: The issue is decided in favour of the assessee and against the Department; bottles and crates are to be treated as fixed capital investment.

Issue (ii): Whether the Tribunal was justified in setting aside the review order and the consequent extension of the exemption period from ten years to fifteen years.

Analysis: The Tribunal set aside the review order even though there was no challenge by the Department to the extension of the exemption period and no discussion showing why that part of the review order should fail. The interference with the review order on that aspect was therefore unsupported by reasons and could not stand.

Conclusion: The issue is decided in favour of the assessee; the extension of the exemption period to fifteen years was not liable to be disturbed.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and the exemption granted to the assessee, including treatment of bottles and crates as fixed capital investment and continuation of the fifteen-year exemption period, was upheld.

Ratio Decidendi: Where a statute defining fixed capital investment expressly includes apparatus necessary for running the factory, items indispensable to a continuous manufacturing and bottling process may qualify as fixed capital investment, and an appellate interference with an unchallenged relief must be supported by reasons.

---