Statutory exemption period under trade tax law cannot be curtailed because factory registration was obtained later.

Once a new industrial unit is found entitled to exemption under section 4A of the U.P. Trade Tax Act, 1948, the statutory exemption period cannot be reduced merely because registration under the Factories Act was obtained later. The relevant exemption period runs according to the statutory scheme from the date of first sale or production, as applicable, and later compliance with factory registration does not authorise curtailment of that period. The curtailment was therefore held unsustainable on the facts and statutory framework considered.

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Issues: Whether the exemption period granted under section 4A of the U.P. Trade Tax Act, 1948 could be curtailed on the ground that the factory was registered under the Factories Act on a later date.

Analysis: The exemption had been granted to a new unit under section 4A, and the relevant period was to run from the date of first sale or the date of production as contemplated by the statutory scheme. The Court relied on the settled principle that once an eligibility certificate is granted to a unit satisfying the conditions of section 4A, the authority has no power to reduce or curtail the statutory exemption period merely because the registration under the Factories Act was obtained later. The impugned curtailment was therefore unsupported by the statutory framework governing exemption.

Conclusion: The curtailment of the exemption period was held to be unsustainable and the assessee succeeded on this issue.

Ratio Decidendi: Once a unit is found entitled to exemption under section 4A of the U.P. Trade Tax Act, 1948, the statutory exemption period cannot be curtailed by the authority on the basis of a later registration under the Factories Act.

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