Strict construction of trade tax moratorium rules bars deferment when section 4-A exemption was partly availed.

Section 8(2-A) of the U.P. Trade Tax Act grants a moratorium only as a substitute for exemption under section 4-A and subject to the prescribed conditions. Rule 43(8) expressly denies that benefit where a manufacturer has availed exemption or reduction in tax under section 4-A, even partly. On the stated facts, the returns showed that exemption under section 4-A had been claimed for the relevant months, so the statutory bar applied. The provision was treated as clear and unambiguous, and the taxing language was construed strictly without resort to equity, hardship, or a liberal reading of the deferment scheme.

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Issues: Whether a manufacturer who had availed exemption under section 4-A of the U.P. Trade Tax Act, even for part of the relevant period, could still claim moratorium under section 8(2-A) of that Act in view of rule 43(8) of the U.P. Trade Tax Rules, 1948.

Analysis: Section 8(2-A) grants moratorium in lieu of exemption under section 4-A, subject to the conditions prescribed. Rule 43(8) expressly bars moratorium where the manufacturer has availed exemption from or reduction in tax under section 4-A, wholly or in part. The returns filed by the petitioner showed that exemption under section 4-A had in fact been claimed on the turnover for the relevant months, and the statutory language of rule 43(8) was held to be clear and unambiguous. In such taxing provisions, the Court applied strict construction and declined to read down the express restriction by reference to equity, hardship, or a liberal construction based on the deferment scheme.

Conclusion: The petitioner was not entitled to moratorium under section 8(2-A) because it had availed exemption under section 4-A, attracting the bar under rule 43(8).

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