Industrial exemption under sales tax law cannot be curtailed by adding a non-statutory registration condition

Under section 4A of the U.P. Sales Tax Act, exemption for a new industrial unit runs from the statutory date of commencement of production, and the issuing authority cannot curtail that period by adding an administrative condition not found in the statute. The notification's registration requirement under the Factories Act was only explanatory and could not be used to reduce exemption where the unit otherwise satisfied the statutory criteria. Technical delay in registration did not defeat the incentive scheme for industrialisation, and the eligibility certificate could not lawfully shorten the benefit.

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Issues: Whether the authority granting an eligibility certificate under section 4A of the U.P. Sales Tax Act, 1948 could curtail the statutory period of exemption on the ground that the unit was registered under the Factories Act after the date of application.

Analysis: Section 4A and the notification issued thereunder fixed the entitlement to exemption by reference to the status of a new unit and the date of starting production. The statute did not confer any discretion on the authority to alter the commencement or duration of exemption once the unit satisfied the statutory requirements. The conditions attached to the notification had to be construed in the context of the incentive scheme for industrialisation, and technical defects could not be used to defeat the benefit where the unit otherwise qualified. The registration requirement in the notification was only explanatory and could not be used to reduce the period of exemption otherwise admissible under the Act.

Conclusion: The authority had no power to curtail the exemption period on the ground of delayed registration under the Factories Act. The petitioner was entitled to exemption from the statutory date of production, and the curtailed eligibility certificate was unsustainable.

Ratio Decidendi: Where a taxing statute grants exemption to a new unit from the date of starting production, the authority issuing the eligibility certificate cannot shorten the exemption period by importing an additional administrative condition not found in the statute.

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