LexCOMMISSIONER, TRADE TAX, U.P. versus M/S. D.S.M. GROUP OF INDUSTRIES
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A COMMISSIONER, TRADE TAX, U.P. v. MIS. D.S.M. GROUP OF INDUSTRIES DECEMBER 9, 2004 B [S.N. VARIA VA AND DR. AR. LAKSHMANAN, JJ.] Trade Tax : U.P. Trade Tax Act, 1948-Section 4-A-Trade Tax-Exemption- C Notification granting exemption to undertaking manufacturing goods which made a fzxed capital investment of Rs. 50 crores or more in expansion, modernization or diversification-Joint application for claim of exemption by company having multiple units-Rejection of, on the ground that the application was joint, time barred and the company in arrears of tax- D On appeal held : Plain reading of the Notification shows that for expansion, modernization and diversification, industrial undertaking is considered to be a unit-Unit refers to more than one unit-Clause (b) of Section 4- A (6)(5) clearly indicates that reference is to industrial undertaking as a while and not a unit of industrial undertaking-For expression expansion, modernization there is no qualifYing words 'in any one unit '-Furthermore, E manufacturer is entitled to the benefit of exemption if application is made at later date though benefit would be limited-Also manufacturer cannot be said to be in arrears of tax-Hence, the Assessing Authority and the Tribunal erred in rejecting the application and the order of High Court upheld-However, order of High Court directing issuance of Eligibility Tax F and directing reimbursement not correct-Hence that part of the order set aside-Matter is remitted back. Words and Phrases : Unit and Industrial Undertaking-Meaning of in the context of Section G 4-A(6/(5) of the U.P. Trade Tax Act, 1948. By a Notification certain exemption from payment of trade tax was granted to an undertaking which made a fixed capital investment of Rs. 50 crores or more in expansion, modernization or diversification or H backward integration. 798 • - COMMR., TRADE TAX, U.P. v. MIS. D.S.M. GROUP OF INDS. 799 Respondent-company has more than one unit in different localities. A Company's principal place of business is at District B. It filed joint application before the General Manager of District B for claiming exemptions under the Notification on the grounds of expansion, diversification and modernization. Assessing Authority rejected. the application on the ground that a joint application for multiple units was B not permissible and was time barred; and that the company was in arrears of tax. Trade Tax Tribunal rejected the appeal. High Court set aside the order of the Tribunal an allowed the Revision. It directed the Authority concerned to issue an Eligibility Certificate under Section 4- A of the U.P. Trade Tax Act, 1948 for benefit of tax rebate and reimburse the amount paid earlier. Hence the present appeal. c Appellant contended that term 'Unit' refers not to the industrial undertaking as a whole but to a unit of the Company and each unit is considered to be a separate entity; that the Company making a capital investment of Rs. fifty crores or more in its various units cannot club D the units to claim exemption under the Notification but the investment has to be in respect of one unit only; that the increase in production in respect of any one particular manufacturing concern under expansion or modernization should be compared with the pre-existing figure of 'base production' of that concern only; that claus.e (d) of Section 4- A(6)(5) brings out the necessity of giving the narrow meaning to the expression 'industrial undertaking'; that under clause (e) the enhanced portion of the undertaking should be established within the same district in which the existing industrial unit is established having reference only to one manufacturing concern at a time which is undergoing expansion etc. and the district in which it is located and not to all the existing industrial units belonging to the dealer, that expression 'base production' in explanation can have reference only to the production capacity or production figures in respect of the one 'existing industrial unit' which is undergoing expansion etc; that the application was time barred; and that the Company was in arrears of tax and as such not entitled to the benefit to the Notification. Disposing of the appeal, the Court E F G HELD : l.l. The Preamble to the Notification· shows that the capital investment of Rs. fifty crore or more has to be in a new unit or H 800 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R. A in expansion,
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