TaxTMI 
TaxTMI 
1995 (9) TMI 43
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....he High Court. In pursuance of the aforesaid order passed by the Supreme Court, this writ petition was taken up for admission and was admitted by this court. This writ petition is accordingly taken up for hearing and being disposed of finally. Petitioner No. 1 was and is en aged in the business of manufacture of banaspati and allied products. In 1976, the petitioner decided to diversify into manufacture and production of writing and printing paper and with this end in view, the petitioner on July 24, 1976, wrote a letter to the Director of Forest Research Institute, at Dehradun, wholly owned and financed by the Government of India, seeking technology process/knowhow for manufacture of writing paper and craft paper from agricultural waste such as cereal straws and sabai grass and sarkanda, etc. The Forest Research Institute carried out an extensive laboratory test and pilot plant runs were carried out at the expense of the petitioner by using agricultural wastes such as rice-straw, kana and kahi grass as the raw materials. Eventually a technology, process/know-how using agricultural wastes and grasses as raw materials by using one common line for cleaning, refining and bleaching of....
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....es only whereas the company has been using rice-straw and wheat-straw along with grasses. (b) The Forest Research Institute stipulated 70 : 30 as the ratio of the rice-straw and grasses in the furnish whereas the company's consumption figure indicated ratio of 60 : 40 (approximately), i.e., 60 per cent. rice + wheat-straw and 40 per cent. grasses. (c) The process parameters as laid down by the Forest Research Institute were compared with those in actual practice as supplied by the company for 60 GSM paper. The comparison revealed that process parameters of the Forest Research Institute were not followed by the company. (d) The Forest Research Institute has informed the Department that they do not have any agreement with the company for the manufacture of writing, printing and craft paper. Learned counsel appearing for the petitioner submitted before us that the petitioners fulfilled all the requirements of section 32A(2B) of the Income-tax Act and, therefore, are entitled to a certificate in terms of the provisions of the Act. According to learned counsel for the petitioners, the respondents in refusing to grant the certificate ignored all the relevant material and information ....
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....roduced before us we may appropriately refer to the provisions of section 32A(2B) of the Income-tax Act, which reads as follows : " Section 32A(2B).--Where any new machinery or plant is installed after the 30th day of June, 1977, but before the 1st day of April, 1987, for the purposes of business of manufacture or production of any article or thing and such article or thing-- (a) is manufactured or produced by using any technology (including any process) or other know-how developed in, or (b) is an article or thing invented in, a laboratory owned or financed by the Government, or a laboratory owned by a public sector company or a University or by an institution recognised in this behalf by the prescribed authority, the provisions of sub-section (1) shall have effect in relation to such machinery or plant as if for the words 'twenty-five per cent.', the words 'thirty-five per cent.' had been substituted, if the following conditions are fulfilled, namely :-- (i) the right to use such technology (including any process) or other know-how or to manufacture or produce such article or thing has been acquired from the owner of such laboratory or any person deriving title from such ....
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....to mandatorily have a contract with the said laboratory owned or financed by the Government. In the light of the aforesaid provisions of law referred to above and the submissions made by learned counsel for the parties on the basis thereof, let us examine as to whether the petitioner is entitled to be issued with such a certificate or not and/or whether the petitioners are entitled to claim benefit of the provisions of section 32A(2B) of the Income-tax Act or not. It is not disputed that the aforesaid technology process or knowhow was developed by the Forest Research Institute, Dehradun, which was handed over to the petitioner and a certificate in that respect has also been issued by the said Forest Research Institute. The only dispute that is raised in the present petition is that the process parameters of the technology including the process and know-how developed and given by the Forest Research Institute were not being used by the petitioners for the purpose of their business of manufacture or production of writing, printing and craft paper. According to the respondents, the petitioners have used wheat-straw instead of rice-straw and there has been substantial variation in the....