COMMISSIONER OF TRADE TAX, U.P., LUCKNOW versus MIS. MODIPAN FIBRES COMPANY

Citation: [2006] SUPP. 4 S.C.R. 236 · Decided: 02-08-2006 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

A 
COMMISSIONER OF TRADE TAX, U.P., LUCKNOW 
v. 
MIS. MODIPAN FIBRES COMPANY 
AUGUST 2, 2006 
B 
[ASHOK BHAN AND MARKANDEY KA TJU, JJ.] 
Taxation: 
Trade tax-Notification No. 1093 dated 27. 7.1991-Exemption under-
C Entitlement to-Held: Dealer entitled to exemption on the turnover of sale of 
goods in an assessment year in excess of the base production-UP. Trade 
Tax Act, 1948-Section 4-A. 
The question which has arisen for consideration in the present appeal 
D is whether the respondent-assessee is entitled to avail the exemption under 
Notification No.1093 dated 27.7.1991 on the basis of the turnover of sale 
E 
F 
of goods in an assessment year minus the base production or on the sale 
of goods after achieving the base p~oduction. 
Dismissing the appeals, the Court 
HELD: 1. The purpose of granting exemption under the Notification 
dated 27.7.1999 was to promote the development of certain industries in 
the State. By the said notification exemption from payment of tax or 
reduction in rate of tax was granted to new units as also to the units which 
had undertaken expansion, diversification or modernization. (241-C-DI 
2. The units of the dealers (respondents) are covered by Clause (l-
B)(a) of the Notification. Exemption granted is on the turnover of sales of 
quantity of goods manufactured in excess of base production. Under clause 
6(a) of the said Notification, turnover of sale of goods in any assessment 
year to the extent of quantity covered by the base production of that year 
G and balance stock of base production of previous years, shall be deemed 
to be turnover of the base production. Under clause 6(b) of the Notification, 
the facility of exemption can be availed on the turnover of goods in "any 
assessment year" in excess of the quantity referred to in sub-clause (a) of 
clause 6. A conjoint reading of Clause (1-B) (a), clause 6(a) & (b) makes 
H 
236 
COMMR OFTRADE TAX.UP. LUCKNOW v.MODIPAN FIBRES COMPANY [BHAN, 1123 7 
it clear that the dealer is entitled to claim exemption in respect of the A 
turnover of sale of goods of an assessment year in excess of the base 
production. "Assessment Year" has been defined in Section 3 U) to mean 
the twelve months ending on March 31. The extent of entitlement to 
exemption depends on the sale of goods in the assessment year minus the 
base production determined under the Act. Simply because dealer has to B 
file returns from month to month and deposit the admitted tax at the time 
of filing of the return does not mean that qut:stion of exemption on the 
turnover of the production in excess of the base production can be 
considered only after the base production is achieved. Returns filed every 
month and the tax paid would be subject to adjustment at the time of the 
finalization of the assessment. Intention of the legislature is clear and C 
unambiguous. Exemption is to be given on the turnover of sale of goods 
in an assessment year in excess of the base production. 1241-D-H; 242-AI 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1760-1761 
of 2001. 
From the Order dated 8.3.2000 of the High Court of Allahabad in 
Trade Tax Revision No. 1071 and 1072 of 1997. 
WITH 
C.A. Nos. 1762-1765/2001 
Dr. R.G. Padia, Rajeev Dubey, Rashmi Singh, for Kamlendra Mishra, 
Jmran Ahmad Abbasi and Rachna Srivastava for the Appellant. 
A.K. Ganguli, A.T. Patra, Ramesh Singh, Nipun Malhotra (for O.P. 
D 
E 
Khaitan & Co.), Dhruv Agarwal and Praveen Kumar for the Respondents. 
F 
The Judgment of the Court was delivered by 
BHAN, J. This order shall dispose of Civil Appeal Nos. 1760-1761 of 
200 I and 1762-1765 of 200 I as the point involved in all these appeals is 
common. The High Court had also disposed of the revision petitions by a G 
common order. These appeals are directed against a common order passed by 
the High Court of judicature at Allahabad in Trade Tax Revision No. I 071-
1072 of 1997 whereby the High Court allowed the revision filed by the 
respondent-assessee (hereinafter referred to as "the respondent") and set aside 
the order of the Trade Tax Tribunal-Bench-2, Ghaziabad (for short "the 
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238 
SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R. 
A Tribunal"). Before adverting to the facts, it is necessary to mention a few 
preliminary facts on the statutory provision of the U.P. Trade Tax Act, I 948 
(for short "the Act") and the Notification No. 1093 dated 27.7. 1991 issued 
under Section 4-A of the Act. 
Section 4-A inter alia empowers the State Government to exemp

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