TaxTMI 
TaxTMI 
2021 (7) TMI 1346
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.... granted approval by the Government of India (Ministry of Industry), to set up the assessee company - a 100% owned subsidiary company in India to manufacture and market various electrical and electronic appliances including washing machines, refrigerators, air conditioners, colour televisions, audio and video equipments. Then, on 04.11.1997, the Government of India amended its approval letter dated 29.01.1997 and granted further approval to the parent company to manufacture and market (by the assessee company) various electrical and electronic appliances mentioned in the letter dated 29.01.1997 and also Microwaves ovens and PC monitors. In the light of such approval letters, the assessee company was incorporated and consequently engaged in the activity of manufacture and marketing of various electrical appliances and electronic goods. In the context of the dispute that had arisen, it is seen that the State Government had, vide notification nos. 780 and 781, both dated 31.03.1995, provided for schemes to grant exemption to 'new units' established inside the State and to units engaged in expansion, diversification and modernisation, during the period 01.04.1995 and 31.03.2....
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....onduct of filing two separate applications - one to seek exemption on manufacture of refrigerators (electrical goods), and other to seek exemption to manufacture PC monitors (electronic goods), upon a legal opinion obtained by it. In any case, the assessee first filed an application on 10.01.2002 with respect to manufacture of refrigerators, and another on 28.12.2002 for manufacture of monitors. It is also a fact that the aforesaid two applications came to be considered separately by the DLC. The application to claim exemption for manufacture of refrigerators was allowed by the DLC, vide its order dated 12.05.2003, and in that regard, the assessee was granted exemption on the entire investment of Rs.42 crores made by it. However, the second application filed with respect to PC monitors was rejected by the DLC by its order dated 07.07.2005 treating the same to be diversification separate and distinct from diversification to manufacture refrigerators. Accordingly, the investment of Rs. 8.13 crores, made by the assessee, was found to be below the qualifying limit of 25% of the original fixed capital investment (Rs. 51,37,35,446/-). This order was sought to be reviewed. However, the....
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....he revision was disposed of with the following direction: "Thus this Court directs the tribunal to decide the issues relating to diversification by way of adding new item of manufacture such as T.V. and monitor on merits and in accordance with law within a period of three months from the date of production of a certified copy of this order being placed by the petitioner within 15 days from today. Needless to say that a proper opportunity shall be given to the assessee. The impugned order of the tribunal dated 16.5.2012 is set aside. The revision is disposed of as above. No costs." In compliance of the aforesaid order, the Tribunal has again adjudicated the issue by order dated 22.10.2012 which has given rise to Sales/Trade Tax Revision No.125 of 2013 (L.G. Electronics India Pvt. Ltd. v. commissioner of Commercial Taxes) (in short "the previous revision"), which was finally disposed of by judgment and order dated 24.10.2019. In the previous revision the bone of contention was whether under clause (d) of Explanation (5) of the Section 4A of UPTT Act additional fixed capital investment of Rs.42 crores in refrigerator and Rs.8,13,30,080/- in monitor should be treat....
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....or Counsel assisted by Sri Nishant Mishra, learned counsel for the assessee and Sri B.K. Pandey, learned Standing Counsel for the revenue. 14. Present revision was itself admitted on the following questions of law: "A. Whether under clause (d) of Explanation (5) of the Section 4A of UPTT Act additional fixed capital investment of Rs.42 crores in refrigerator and Rs.8,13,30,080/- in monitor should be treated as joint diversification in terms of the judgment of Hon'ble Supreme Court in the case of DSM Group of Industries and according the Applicant should be granted exemption under Section 4A? B. Whether for the purposes of clause (d) of Explanation (5) of Section 4-A of the Act, additional fixed capital investment of the 'industrial undertaking' as a whole has to be taken into account or item-wise additional fixed capital investment has to be seen? C. Whether the Applicant can be denied the benefit of exemption under Section 4-A, when admittedly the Applicant's industrial undertaking has made additional fixed capital investment of more than 25% of the original fixed capital investment? D. Whether the Tribunal has wrongly r....
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....ct alone was held to be determinative to hold the assessee eligible to exemption. The exact investment made in individual units was found to affect the determination of the limit of exemption available on goods manufactured by each unit. That law is stated to have been followed by the Supreme Court till as late as in G.P. Ceramics Private Limited Vs. Commissioner, Trade Tax, Uttar Pradesh, (2009) 2 SCC 90. 18. Also, the principle of purposive construction has been invoked by relying on the decision of the Supreme Court in Commissioner of Sales Tax Vs. Industrial Coal Enterprises, (1999) 2 SCC 607 and Bajaj Tempo Ltd., Bombay Vs. Commissioner of Income Tax, Bombay City-III, Bombay, (1992) 3 SCC 78 to submit that the rule of strict construction may be applied only for the purposes of determining the eligibility to exemption and no further. 19. In so far as there exists credible and sufficient evidence to establish that the assessee had engaged in a common diversification exercise to manufacture both refrigerators and PC monitors, at a single point in time, at the same unit, the investment made in that exercise had to be taken as composite whole and not truncated by ....
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....achinery, equipment, apparatus and component to manufacture refrigerators and monitors, it has been submitted that the diversification into manufacture of refrigerators and PC monitors was carried out simultaneously during the year 2000-01. Emphasis has been laid on the fact that the assembly lines that were the main component of the plant and machinery used to manufacture those goods were purchased by two separate invoices raised on the assessee on same date, being February 26, 2001. All these documents are claimed to be existing on the record of the Tribunal. Then referring to the written arguments that were placed before the Tribunal, it has been further emphasised that this issue was specifically raised by disclosing (based on evidence on record), the date of Commercial Invoice to purchase separate assembly lines for the two products as common i.e. 26.02.2001 and the date of first investment in plant and machinery for refrigerators as 01.02.2001 whereas that for PC monitors as 15.11.2000. Further, the date of starting production of PC monitors was 11.5.2001 whereas that of refrigerators was 11.07.2001. It also, established existence of a single diversification. 23. Als....
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....ssessee did engage in diversification upon establishing manufacturing facility to manufacture refrigerators and PC monitors. No goods similar to those were being manufactured by it, earlier. Thereafter, a purposive construction has to be made. In paragraph nos. 11 and 12 of the Supreme Court decision in Industrial Coal (supra) held as: "11. In CIT v. Straw Board Mfg. Co. Ltd. [1989 Supp (2) SCC 523 : 1990 SCC (Tax) 158] this Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd. v. CIT [(1992) 3 SCC 78] it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision. 12. We find that the object of granting exemption from payment of sales tax has always been for encouraging capital investment and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industry in the State. If the test laid down in Ba....
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.... In that, it had relied on the original approval letters issued by the Government of India dated 29.1.1997 and 4.11.1997 wherein it clearly disclosed its intent to set up a unit to manufacture, amongst others, refrigerators and PC monitors. Then the assessee is a public limited company. In its annual report for the period ending 31 March, it appears, it had been specifically stated as under: "Despite increased competition, your Company is confident of garnering a higher growth in its products during the year 2001. The Company is planning to introduce many new models, thus making the company with the widest range of models in all its product category. During the year 2000, the Company has started work to add a Refrigerator Plant to its existing production facilities which would be operational by July 2001. The Company is planning to start assembling of Monitors in India in May 2001." 29. Not only such position appears to have been made clear in such public document, but also the assessee substantiated the same by adducing corroborative evidence in the shape of same date invoices dated 26.2.2001 to purchase vital machineries, being separate assembly lines to manufac....
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.... fact or in law?" 32. Dealing with that issue, the Supreme Court had held that it was never the onus of the revenue to prove that there were three separate expansions. Admittedly Kajaria Ceramics had later changed its stand and claimed existence of a single scheme of expansion carried out in three phases as against its earlier stand of having engaged in three separate expansions. Considering that crucial fact, the Supreme Court reasoned that the onus to establish a single expansion in three phases remained undischarged at the hands of that assessee/Kajaria Ceramics. 33. It was in that factual context, the Supreme Court further observed that the scheme of expansion would necessarily warrant estimates, plants, drawings etc. It then observed, there was not a single piece of evidence, to establish that the expansion was a single step exercise carried out by that assessee. On the contrary, it was found that with respect to each three expansions, separate industrial licences had been applied for and obtained by that assessee. Moreover, separate negotiations had also been entered into at each stage. Therefore, in the face of such evidence, it was concluded that there wer....
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....lf-contradiction in the claim made by the assessee. It had consistently stated that it had filed two applications under legal advice owing to different treatment of the two items, namely refrigerators and monitors under the relevant exemption notifications. It had also referred to the own interpretation/treatment offered by the State authorities in granting exemption, specific to the investment made to manufacture each commodity. Thus, the assessee had relied on the certificate issued with respect to the diversification to manufacture PCB and Microwave Ovens vide eligibility certificate dated 27.9.2000. That issue has also remained from being thrashed out by the Tribunal. 38. Accordingly, I find that the Tribunal has misdirected itself in approach and, therefore, its order cannot be sustained. As to what would be the conclusion to be drawn on facts, is not being commented upon in this order. That would remain for the Tribunal to consider and decide on the strength of evidence placed before it. Insofar as the correct approach to be followed, that has been settled above. 39. In view of the above, the questions of law (as framed above) remain unanswered. 40.....
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....cts. It was further held that if fact finding authority comes to certain conclusion honestly and bona fidely, the mere fact that Court may have a different perspective of that question, cannot be a ground to interfere with the finding even though another view may be possible. Learned counsel for the respondents has also placed reliance on the judgments in Commercial of Sales Tax v. Swadeshi Metal Works, Sales Tax Revision Nos.75, 76, 77 and 79 of 1986 decided on 30.07.1986; Commissioner of Trade Tax v. New Brij Sudh Deshi Ghee Store, Trade Tax Revisions Nos.499 and 502 of 1999 decided on 12.9.2002 and Commissioner, Commercial Tax v. Dabur India Ltd., Sales/ Trade Tax Revision Nos.441 of 445, 447, 448, 450, 451, 453, 455, 463 to 465 467 and 507 to 509 of 2014 decided on 25.09.2014. Heard rival submissions, perused the record and respectfully considered the judgments cited at Bar. The Revision No.125 of 2013 was admitted on the following questions of law:- "A. Whether under clause (d) of Explanation (5) of the Section 4A of UPTT Act additional fixed capital investment of Rs.42 crores in refrigerator and Rs.8,13,30,080/- in monitor should be treated as joint diversifica....
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....P. Trade Tax Act, 1948 was held to be unsustainable. The matter was remitted to the Tribunal without making any comments on facts and the Tribunal was directed to decide the matter on the strength of evidence placed before it. Now at this stage it is not expected from this Court to take fresh appraisal of the evidences or fact findings recorded by the Tribunal, or submitted for consideration by the revenue/revisionist. The trade tax revision could not be dealt with and decided as an appeal by this Court as an appellate authority. If fact finding authority comes to certain conclusion honestly and bona fidely, the mere fact that Court may have a different perspective of that question, cannot be a ground to interfere with the finding even though another view may be possible. Considering the limited jurisdiction exercisable under the Act such a course is not available. While passing the order impugned, the Tribunal has clearly proceeded to observe:- While passing the order impugned, the Tribunal has no doubt considered para 36 and 37 of the judgment passed by this Court but at the same time has also considered the documents and evidence filed before the Tribunal. The Tribunal ....
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....considered opinion that if the last fact finding authority i.e. the Tribunal has recorded finding of fact, the same cannot be interfered with in the revision provided the finding is perverse or it based on consideration of irrelevant material or not consideration of relevant material. The Court does not find any infirmity or illegality in the finding recorded by the Tribunal. In the facts and circumstances, it cannot be said that there was any question of law involved, which was required to be determined by this Court. In view of above, the revision fails and is accordingly dismissed. The party shall file computer generated copy of such order downloaded from the official website of High Court Allahabad, self attested by the party alongwith a self attested identity proof of the said person (preferably Aadhar Card) mentioning the mobile number to which the said Aadhar Card is linked. The concerned Court/Authority/Official shall verify the authenticity of such computerized copy of the order from the official website of High Court Allahabad and shall make a declaration of such verification in writing. ============= Document 1 "अपीलकरà¥....