LexCOMMISSIONER OF TRADE TAX, U.P. versus M/S. MALVIYA CHEMICAL AND PHARMACEUTICAL PRIVATE LIMITED, GHAZIABAD
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A B COMMISSIONER OF TRADE TAX, U.P. v. MIS. MALVIYA CHEMICAL AND PHARMACEUTICAL PRIVATE LIMITED, GHAZIABAD NOVEMBER 15, 2007 [DR.ARIJITPASAYAT AND LOKESHW AR SINGH PANT A, JJ.) C UP. Trade Tax Act, 1948: s.11-Notification No.1093 dated 27.7.1991-Clause (6)- Exemption under-Computation of-Held: Computable on sale of goods in an assessment year in excess of base production- D Requirement of filing returns fi"om month to month and depositing admitted tax while filing return would not mean that exemption could be granted only on sale of goods effected after base production is achieved-Tax paid at the time of filing return would be subject to adjustment at the time of finalization of assessment-Intention. of legislature in that regard is clear and unambiguous. E Assessee had been engaged in the business of manufacture of bulk drugs. It was granted eligibility certificate under s.4A of the U.P. Trade Tax Act under Notification No.1093 dated 27.07.1991 in respect of the expansion undertaken by it to manufacture F paracetamole, which is bulk drug. The base production was fixed at 172.8 MT. During the assessment year 1992-93, total sales made by the assessee from 01.04.1992 to 31.03.1993 was 382.125 MT. According to the assessee, it was entitled for the benefit of exemption under s.4-A of the Act on the turnover of the production of209.325 G MT. It claimed that during the assessment year in dispute, returns had been filed disclosing the total sales made by it and had claimed exemption from payment of tax only to the extent of sales made by it to the extent of 140.75 MT. during the whole year. Assistant Commissioner accepted the books of account and the disclosed H 68 r I 1 COMMNR.OFTRADETAX, U.P. v. MALVIYACHEMICAL // 69 AND PHARMACEUTICAL PVT.LTD. ') turnover but restricted the claim of exemption to the extent of70.325 A MT instead of 140. 75 MT. Assessee filed appeals which were dismissed on the ground that the exemption from payment of tax cannot be claimed upto the period till the base production turnover has not been achieved. On appeal, B Tribunal held that base production has been achieved on 23.09.1992 and, therefore, whatever the sale was made upto 23.09.1992 shall not be entitled for exemption and the assessee was entitled for exemption only after 23.09.1992 on the production in excess of the base production. The High Court found substance in the plea of the c assessee and set aside the order of Tribunal. Hence the present appeal. Dismissing the appeal, the Court HELD: Exemption under Notification dated 27. 7.1999 granted D 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 and balance stock of base production or previous years, shall be deemed to be E 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) and 6 (b) makes it'tlear that the dealer is entitled to claim exemption in respect of the turnover of sale of goods of an F assessment near in excess of the base production. "Assessment Year" has been defined in s. 3 U) to mean the twelve months ending on March 31. lfthat be the case then the extent of entitlement to exemption will depend on the sale of goods in the assessment year minus the base production determined under the Act. Simply G ) because dealer has to file returns from month to month and deposit the admitted tax at the time of filing of the return does not mean that question 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 H 70 SUPREME COURT REPORTS [2007] 12 S.C.R. \ A would be subject to adjustment at the time of the finalization of the f B assessment. Intention of the legislature is clear and unambiguous. Exemption is to be given on the turnover of sale of goods in an assessment year in excess of the base production. [Para 9and10] [80-C-H; 81-A] Commissioner of Trade Tax, UP. v. Modipan Fibres Co., (2006) 6 sec 577, relied on. Modipan Fibres Co. v.
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