Court enforces tax liability condition; petitioner bound by exemption terms; principle of approbate and reprobate applied

The Court upheld the validity of the condition imposing liability on the petitioner for the tax of the earlier manufacturer under the U.P. Trade Tax Act. The petitioner, who availed exemption under the Act, was held bound by the condition and could not dispute it later. The principle of approbate and reprobate applied, barring the petitioner from challenging the liability after benefiting from the exemption. The Court found the judgments cited by the petitioner's counsel irrelevant and dismissed the writ petition, ruling against granting relief to the petitioner.

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Issues:
Petitioner seeks quashing of recovery certificate due to liability on assets purchased from a company facing trade tax dues. Whether liability on assets purchased by petitioner from a company facing trade tax dues can be enforced against petitioner.

Analysis:
The petitioner bought assets from a company facing trade tax dues. The company was granted exemption under Section 4-A of the U.P. Trade Tax Act. The petitioner sought continuation of the exemption under Section 4-A(2-B) of the Act after purchasing the unit. The provision allows a successor manufacturer to apply for exemption for the remaining period if the business of the former manufacturer discontinues. The liability of tax on the predecessor manufacturer can be transferred to the successor manufacturer under Section 3-C of the Act. The petitioner accepted the condition to pay the tax of the earlier manufacturer when availing the exemption. The petitioner's failure to pay the tax of the earlier period, which became jointly and severally payable by the petitioner, led to the issuance of a recovery certificate against the petitioner.

The Court held that the condition imposed by the competent authority, making the petitioner liable for the tax of the earlier manufacturer, was valid and in accordance with the law. The petitioner, having availed the exemption, cannot challenge the condition at a later stage. The principle of approbate and reprobate applies, preventing the petitioner from benefiting from the exemption while contesting the liability. The judgments cited by the petitioner's counsel were found inapplicable to the present case. The Court concluded that the petitioner is not entitled to relief, and the writ petition was dismissed.

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