TaxTMI 
TaxTMI 
2013 (8) TMI 807
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.... Trade Tax, U.P. Lucknow." In all the petitions, law point is common though facts like amounts, dates, products are different. For the purpose of adjudication, facts of the leading case i.e. M/s. Pramod Telecommunication (P) Ltd. are taken up. The brief facts of the case are that the petitioner has its registered office at 5, Ashok Nagar, Gautam Budh Nagar, Aishbagh, Lucknow and factory at Plot No. 6-B, Malviya Nagar, Aishbagh, Lucknow. It carries on business of manufacture and sale of electronic push button telephones, electronic energy meters and their parts. The unit was established in 2001-02. The first date of production and sale was 30.12.2001 and 31.12.2001 respectively. For establishing a new unit, State Government has provided an exemption under Section 4A of the U.P. Trade Tax Act, 1948 for the purpose of encouragement to establish the industrial units in the State of U.P. as well as for increasing the production of the goods in the existing units undertaken expansion, diversification and modernization depending upon the fixed capital or additional fixed capital investment. The assessee has installed new machines for enhancement of the production and claimed an exempti....
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....of tax to the industrial units for a period of 8 years, 10 years or 12 years depending upon the district in which the units are situated and also to the extent of 75%, 100% and 150% of the fixed capital investment. However, so far as the electronic industry is concerned, no monetary limit of exemption was fixed by the State Government in pursuance of the Notification No. 2760 and 2761 dated 16.11.1995. Learned counsel for the petitioner also submits that the petitioner has established a unit for the manufacture of electronic push button telephones and electronic energy meters which are electronic goods hence irrespective of the investment made, the petitioner was entitled for grant of exemption for a period of 8 years without any monetary limit of exemption since the unit of the petitioner is situated in the district of Lucknow. In the instant case, he submits that eligibility certificate has been granted to the petitioner for a period of 10 years with effect from 21.02.2001 to 20.02.2011 or to the extent of the monetary limit of Rs.12,80,44,940/- whichever expires earlier. Hence, the petitioner is entitled to get the benefit of exemption from payment of tax to the extent this am....
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....outh of the Revenue to repudiate a circular issued by the Board on the basis that it is inconsistent with a statutory provision. Consequently and discipline are of far greater importance than the winning or losing of Court proceedings." He also relied on the ratio laid down in the following cases:- (i) Commissioner, Trade Tax, U.P. Lucknow vs. S/S S.R. Ice & Cold Storage Pvt. Ltd., Agra, 2006 NTN (Vol. 29) 297; (ii) Assam Company Ltd. & Anr. vs. State of Assam & Ors., 2001 UPTC 751 (SC); (iii) Commissioner of Sales Tax vs. Industrial Coal Enterprises, 1999 UPTC 250 (SC); (iv) Commissioner of Trade Tax vs. M/s. D.S.M. Group of Industries, 2005 UPTC 121 (SC); (v) Venlon Polyester Film Ltd. vs. Joint Commissioner of Commercial Taxes (Admn.) & Anr., (2003) 133 STC 539; and (vi) Jyoti Phoschem vs. State of Punjab & Ors., (2002) 128 STC 466. Learned counsel for the petitioners also submits that the Assessing Authority is bound by the eligibility certificate. It is also a submission that the interpretation sought to be given by the answering respondents to the provisions of Section 4A(6)(2)(c) of the U.P. Trade Tax Act is highly misconceived and misplaced as well as contrary to th....
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....n. For this purpose, he relied on the ratio laid down on the following cases: (i) Novopan India Ltd., Hyderabad vs. Collector of Central Excise and Customs, Hyderabad, (1994) Supp. (2) SCC 606; (ii) State Level Committee and another vs. Morgardshammar India Ltd., (1996) 1 SCC 108; (iii) G.P. Ceramics Private Limited vs. Commissioner, Trade Tax, Uttar Pradesh, (2009) 2 SCC 90; (iv) State of Gujarat and others vs. Essar Oil Limited and another, (2012) 3 SCC 522; (v) Sriniwas Cable Components vs. State of Madhya Pradesh and others, (2012) 10 SCC 421; (vi) State of Jharkhand and others vs. Ambay Cements and another, (2005) 1 SCC 368. (vii) Sushila Chitra Mandir, Delhi vs. State of U.P., and others, 2005 UPTC 44; and (viii) Oudh Sugar Mills Ltd. vs. State of U.P. and others, Writ Petition No. 7433 of 2002, decided on 14.10.2011. It is also a submission of learned counsel for the department that the Assessing Officer/Authority is bound by the eligibility certificate issued to the petitioners in respect of exemption granted on the basis of fixed capital investment made by the petitioner company and which is categorically mentioned in the eligibility certificate issued on the basi....
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....fications vide letter dated 08.06.2005. By means of letter dated 08.06.2005, the State Government has communicated its decision to the effect that in case any unit has been issued eligibility certificate under Section 4A and relevant notification issued in that behalf then if such unit after the grant of eligibility certificate has increased the production capacity through new machines then such units shall not be entitled for any exemption on the additional goods produced from such new machines. The State Government has further directed that the Commissioner to ensure the compliance of the decision of the State Government. The Government Order dated 08.06.2005 as stated is only clarificatory and explanatory in nature. It provides guidelines for proper and fair implementation of Section 4-A read with Rule 25 and the notifications in question so that it does not cause adverse effect upon any one including prospective new units. Hence, there is no infirmity and illegality in the Government Order dated 08.06.2005 in pursuance of which the Circular dated 8/11.07.2005 has been issued by the Commissioner. In support of the same, learned Additional Chief Standing Counsel has relied on the....
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....h additional land, building, plant, machinery, equipment apparatus and component shall be taken into account as were acquired on or before the relevant date of commencement of the period of facility notified under sub-section (1) of Section 4-A of the Act." (Emphasis supplied). This paragraph therefore links original fixed capital investments to new units and additional fixed capital investments to already established units undertaking expansion, modernization etc. for the purposes of Clauses (4) and clause (5) (d) of the Explanation. There appears to be no clause (4) or (5) to any Explanation in the 1991 Notification. Clearly the reference is to the Explanation in Section 4A of the Act which has defined "fixed capital investment" and "unit which has undertaken expansion diversification or modernization" in clauses (4) and (5) respectively. The relevant extracts of these clauses read as follows:- "(4) 'Fixed capital investment' means investment in land and building and such plant, machinery, equipment apparatus, components, moulds, dyes, jigs and fixtures as have not been used or acquired for use in any other factory or workshop in India: (5) 'unit which has undertaken expansio....
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....espondent, of the original investment made under the 1985 Notification subject to the old unit making a further investment and the benefit was limited to a percentage of that investment. Similarly the 1995 Notification further extended the benefit to units which had undertaken backward integration again limiting the benefit to the investment made. All the three notifications were issued under the same section and for the same purpose of effecting development and were part of a chain of progress without any overlapping. Not only would the contents of each notification derive its meaning from Section 4A as each is derived from and refers back to the section, but also if a phrase used in one of the notifications is still ambiguous, then for the purpose resolving the ambiguity the contents of the previous or subsequent notifications can be looked into, as per the ratio laid down in the case of Pappu Sweets & Biscuits vs. CTT, U.P. (1998) Supp 2 SCR 119. Because the 1995 notification explicitly states in Annexure 1 to that notification that the exemption is calculatable on the fixed capital investment or as the case may be 'additional fixed capital investment'. In Collector vs. Andhra ....
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....ixed capital investment of five crore rupees or more in expansion, diversification, modernization and backward integration or in any one of them, within such period not exceeding five years as may be specified in the notification, the exemption from or reduction in the rate of tax may be granted. (2) ... ... ... (3) ... ... ... (4) ... ... ... (5) ... ... ... (6) Where the State Government is of the opinion that the purpose for which the facility of exemption from or reduction in the rate of tax was granted under this section has been fulfilled or that the continuation of such facility is no longer in public interest or is against the public interest, it may, by notification, withdraw such facility granted to any industry, dealer or class of dealers: Provided that no such facility shall be withdrawn with retrospective effect. Explanation: For the purposes of this section:- (1) 'new unit' during the period ending with March 31st, 1990 means an industrial undertaking set-up by a dealer on or after October 1, 1982 but not later than March 31, 1990:- (a) which is licenced or in respect whereof a letter of intent has been issued or which is registered, permanently or otherwise....
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....bstituted; (ii) in relation to a new unit whose date of starting production falls before August 27, 1984 and the capital investment wherein is not less than three lakh rupees, the condition of registration or application for registration under the Factories Act, 1948, shall not apply; (iii) in relation to a new unit whose date of starting production falls before March 6, 1986, the condition regarding lease for a period of not less than seven years shall not apply; (iv) the unit which has fulfilled all or any of the conditions specified in clause (a) or (d) of the Explanation (1) on a date later than the date of commencement of the period of facility notified under sub-section (1), shall be deemed to be new unit for entitlement to the facility of exemption from tax only for part of the period, notified under sub-section (1), to be computed from the date on which all the conditions specified in clauses (a) to (d) of the said Explanation (1) are fulfilled, or July 20, 1992, whichever be later till the end of the period of such facility. (2) 'New Unit' after March 31, 1990 means a factory or workshop set-up by a dealer after such date and satisfying the conditions laid down under t....
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.... April 1, 1990 under Section 4-A of the U.P. Trade Tax Act. General Manager, Area Development Officer (Industry), District Industries Centre Industrial Development Authority Sir, I/we have established a new unit/undertaken a programme of expansion, diversification or modernization on or after April 1, 1990. My/our unit M/s._______________________ is licenced or registered as industrial unit with the appropriate authority and is entitled to exemption from or reduction in rate of tax under Section 4-A of the U.P. Trade ....
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....e period of facility Certificate of valuation of additional fixed capital investment (i) Land ________________ Collector of District. (ii) Building______________ Evaluator approved by the Income Tax Department. (iii) Plant, machinery, equipment, apparatus and components Chartered Accountant Note: A certificate from Chartered Accountant about original fixed capital investment shall also be enclosed. (b) Production Capacity - Commodity Annual Production capacity prior to such expansion or modernization Increase in production capacity due to expansion and modernization (i) ... ... ... (ii) ... ... ... (iii) ... ... ... From Para 6 of the above, it appears that exemption is granted on the fixed capital investment made by the entrepreneur. Further, if any further investment is made by installing new machines then the benefit of exemption to the production of goods from such new machines is not available. It was expected that the petitioners will apply for fresh certificate regarding the installation of the new machines/investment, which resulted into extra production. But the same was not done in the instant cases. Moreover, provisions of Section 4A relat....