TaxTMI 
TaxTMI 
1979 (10) TMI 224
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....licence was in respect of three crushers of size 11"X14" with three Non-hydraulic rollers. The licence was applied for in August, 1974 and a declaration was made by the petitioner in Form XIII appended to the Rules in accordance with Rule 13-A of Chapter III of the Rules. Undisputably, the petitioner exercised the option envisaged by the proviso to sub-section (1) (b) of Section 3. The petitioner started its'Unit' on 12th December, 1974 and it has been found that the functioning of the 'Unit' was ceased with effect from 4th May, 1975. According to the petitioner, all the three power-crushers comprising its 'Unit' worked upto 31st December, 1974. On the 28th December, 1974, however, the petitioner intimated to the Khandsari Inspector concerned (Respondent No. 2) that due to shortage of sugarcane supply and labour problems, it would not run one of the crushers for the rest of the season. According to the petitioner in the months of January and February, 1975 it worked only two of the crushers. It is claimed that when on the 8th February, 1975 the Khandsari Inspector inspected the petitioner's 'Unit', he found and recorded a report to the effect tha....
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....the assumed basis only in respect of the number of crushers worked by it for different periods and that this had already been done. The Assistant Sugarcane Commissioner rejected the contention. It was held that the declaration made by the petitioner in accordance with the requirements of the Act and the Rules was in respect of a 'Unit' comprised of three crushers. The view was taken that all the three power-crushers comprised a single 'Unit' and irrespective of the question as to whether any particular crusher functioned or was out of commission for any interim period or not, the liability of the petitioner for taxation for the entire assessment period was to be judged treating all the crushers as a single Unit. Aggrieved by the notice dated 12th May, 1975 and the appellate order passed by the Assistant Sugarcane Commissioner dated 7th February, 1979, the petitioner has invoked the jurisdiction of this Court under Article 226 of the Constitution and prays for a writ, order or direction in the nature of certiorari for quashing the notice as well as the appellate order. 3. It was urged by learned counsel for the petitioner at the time of the admission of this petit....
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.... opinion, without any substance. Section 13 (2) of the U. P. General Clauses Act states that the singular will include the plural and vice versa. It may be noted here that even if one of the several crashers of which the petitioner's "Unit" was composed was out of commission while the remaining worked it was still engaged in the manufacture or production of "gur, rab or khandsari sugar with the aid of a crusher driven by any mechanical power", and consequently continued to be a "Unit". An examination of various sub-sections of Section 3 and of Rule 13-A to which we will refer to presently shows that in these provisions throughout the word used is "Unit". and they nowhere mention crusher or crushers. A "Unit" in our view, has to be taken as an undivided whole and the crushers comprising it are mere components thereof. 6. Sub-section (1) of Section 3 of the Act which is the charging section makes the tax leviable basically on the purchase of sugarcane by the owner of a factory or a unit at the rates laid down therein. The taxable incident primarily is the purchase of sugarcane and not the utilisation or consumption thereof. When the owner of a 'unit' exercises the opti....
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.... in such multiples thereof as there are power-crusher set up in the unit. (e) Where a unit comprises more than one power-crusher of different categories the quantity of assumed purchases of cane shall be worked out separately for each category according to column 4 above and the quantities thus worked out shall be totalled." An analysis of the Schedule clearly discloses that a "Unit" is not the same as a crusher. By merely working a crusher the owner of a "Unit" cannot engage himself in the "manufacture or production of gur, rab or khandsari sugar... " He cannot possibly do so without installing "bels' also because without them crushers by themselves would not be "capable of handling sugarcane juice produced......" As is apparent from Note (c), the specifications given in the Schedule relate to a 'unit' comprising on power-crusher only. Since the crushing capacity of a 'unit' is bound to vary according to the size of the crusher or crushers and would also depend on their being of the Hydraulic or Non-Hydraulic category column no. 4 provides for different quantities of sugarcane assumed to have been purchased each month. Notes (d) and (e) make it furt....
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....ze and capacity." Item No. 6 (b) requires the applicant to set out "the number of Bhatties (Furnaces) set up." Again under Item No. 8, the applicant for a licence has to disclose the number of power-crushers. In the application itself under Item No. 11, an applicant for a licence has to state as to whether he proposes to pay the purchase tax under the provisions of the Act according to Schedule I. The prescribed form for application for a licence also thus shows that the crushers are merely parts of the unit. Form XII in which licences are issued also uses both the words 'power-crusher' and 'unit'. A licensee thus obtains a licence for such number of crushers and of such sizes as he has mentioned in his application for licence in Form XII as comprising his unit. 10. According to sub-rule (1) of Rule 13-A the owner of a unit who chooses to exercise the option referred to in the proviso to sub-section (1) of Section 3 is required to do so by way of a declaration in Form XIII which has to be sent under registered cover to the Sugar Commissioner and the Assessing Officer so as to reach them by the 31st of January of each year or 15 days before the start of the unit, ....
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....etitioner's unit has to be taken as an undivided whole and the three crushers which comprised it were merely component parts thereof. Its liability to pay tax rested on the functioning of the Unit which undisputably did continue to be engaged in handling sugarcane juice produced by sugarcane crushers driven by mechanical power. 12. The submission that our interpretation of the Act and the Rules will work hardship on owners of units who exercise an option according to the proviso to Section 3 (1) (b) and hence must be avoided has no substance. The owners of such units have made their own choice and must be assumed to have had in mind the expected and natural hazards of a possible mechanical breakdown of the parts of their unit, failure of supply of electrical energy, labour problems etc. which result in disruption of the manufacturing process. Moreover even owners of factories and units who are liable to taxation on actual sugarcane purchases made by them run similar business risks. Khandsari sugar and gur manufacturers must of necessity make purchases in advance assuming that their factories and units will normally function. Such an assumption may be frustrated by mechanical....