TaxTMI 
TaxTMI 
1990 (7) TMI 346
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..... 3.. The case of the applicant may be briefly stated as follows: The applicant is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941 and the West Bengal Sales Tax Act, 1954, and started business on 1st March, 1979. The applicant is also registered as a small-scale industrial unit with the Directorate of Cottage and Small-scale Industries with effect from the 25th February, 1980. The applicant started manufacture of rubber goods from the 1st January, 1980. Thereafter it applied to the Assistant Commissioner of Commercial Taxes for eligibility certificates on 3rd January, 1981, under rule 3(66) of the Bengal Sales Tax Rules, 1941 and under section 4AA of the West Bengal Sales Tax Act, 1954. The applicant claimed that it ha....
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....e applicant was disentitled to obtain the eligibility certificates. He, however, did not deal with other issues as it was considered by him unnecessary. It is mainly this particular order of the Additional Commissioner which is under challenge. 4.. In its affidavit-in-reply the applicant has introduced certain facts which were not there in its writ petition filed in the High Court in June, 1982. It has now stated that the applicant had purchased all those leased machineries in the month of September, 1981 and that the total investment on account of all the plant and machinery aggregated Rs. 2,95,788.86. It claimed that since September, 1981, i.e., after the order of the Additional Commissioner was passed, there was no question of leasing....
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....le to work out the total cost of the plant and machinery taken on lease either by capitalising the lease rent or obtaining their actual cost and that the total investment on plant and machinery purchased as well leased would be well within Rs. 20 lacs as stipulated in the explanation appended to rule 3(66) and Notification No. 1809-F.T. dated 1st April, 1976. He, therefore, contended that his client had fulfilled all the requirements as laid down in the relevant statute and the rules for obtaining eligibility certificate. Alternatively, he also argued that in terms of the amended definition of "sale" in section 2(g)(ii) of the Bengal Finance (Sales Tax) Act, 1941, a lease of this nature is also deemed to be sale or purchase, as the case may....
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.... the case might be remanded to the Additional Commissioner for consideration of the other objections raised by the Assistant Commissioner but not considered at the time of revision. 9.. It is necessary to refer to the relevant provisions of law to understand their full import and meaning. The provisions of rule 3(66) and those in Notification No. 1809-F.T. dated 1st April, 1976, as amended are identical. Apart from other conditions, the dealer will be eligible for tax benefit if he "keeps vouchers and other documents for purchases of plant and machinery for establishment of such industry". The benefit is available to a newly set up small-scale industry. A newly set up small-scale industry means a new industrial unit, (i) with an inves....
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....llows "To lay out money, make a purchase." 10.. It is obvious that "investment" connotes "purchase" or capital expenditure on purchase. Expenditure on lease is not investment, nor is it an expenditure of a capital nature. The ceiling fixed for investment, therefore, relates to a limit fixed for purchase of plant and machinery. The investment on plant and machinery clearly excludes any expenditure by way of rent on leased plant and machinery. We can think of a hypothetical case of an industrial unit which, after having invested in plant and machinery up to the ceiling limit, takes on lease additional plant and machinery worth about a crore of rupees and claims exemption of tax. This is a preposterous situation since this goes counter to t....