Harmonious reading of exemption and moratorium provisions allows successor manufacturers to seek deferred tax benefits under trade tax law.

A successor manufacturer brought within the exemption framework by Section 4-A(2-B) of the U.P. Trade Tax Act can also claim deferred-tax treatment under Section 8(2-A) read with Rule 43, because the provisions must be read harmoniously and the eligibility certificate remains referable to Section 4-A. The High Court held that moratorium could not be denied by restricting the discontinuance-of-business language to the original manufacturer where the statutory scheme extends exemption benefits to the successor for the unexpired period. The rejection of the deferment claim and the consequential demand were set aside, and the authority was directed to reconsider the application by a reasoned order.

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Issues: Whether a successor manufacturer, entitled to exemption for the unexpired period under Section 4-A(2-B) of the U.P. Trade Tax Act, 1948, can also claim moratorium on payment of tax under Section 8(2-A) read with Rule 43 of the U.P. Trade Tax Rules, 1948.

Analysis: Section 4-A(2-B) was inserted to extend exemption benefits to a successor manufacturer for the unexpired portion of the original exemption period. Section 8(2-A) and Rule 43 provide for moratorium in lieu of exemption under Section 4-A, subject to prescribed conditions. The Court held that these provisions must be read together and not in isolation, because the successor manufacturer's eligibility certificate is referable to Section 4-A and the benefit of moratorium cannot be denied merely by confining the expression relating to discontinuance of business to the original manufacturer. The decisions relied upon by the respondents were found distinguishable because they involved cases where the applicant itself had already availed exemption or where Section 4-A(2-B) was not in issue.

Conclusion: The petitioner was entitled to have its claim for deferment under Section 8(2-A) read with Rule 43 considered on the basis of Section 4-A(2-B), and the contrary rejection could not be sustained.

Final Conclusion: The writ petition succeeded, the impugned rejection and consequential demand were set aside, and the competent authority was directed to reconsider the application afresh by a reasoned order.

Ratio Decidendi: Where a successor manufacturer is statutorily brought within the exemption framework by Section 4-A(2-B), the moratorium provision under Section 8(2-A) and Rule 43 must be construed harmoniously so that the successor is not denied deferred-tax benefits on a reading that defeats the retrospective legislative scheme.

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