PASWARA PETROCHEM LIMITED Vs. COMMISSIONER OF TRADE TAX

JUDGEMENT

(1.) This present trade tax revision has been filed under Section 11 of the U.P. Trade Tax Act, 1948 (in short called "the Act") against the order dated December 31, 2001 passed in Appeal No. 58 of 2001 dismissing the above appeal affirming the order dated April 3, 2001 of Divisional Level Committee, Meerut. Heard Sri Bharatji Agarwal, learned Senior Advocate with Rakesh Ranjan Agarwal, learned Advocate for the applicant as well as learned Standing Counsel for the revenue-respondent.

(2.) The brief facts necessary for adjudication of the present revision are that the applicant, a public limited company incorporated under the Indian Companies Act, 1956, was granted exemption for a period of eight years from April 25, 1999 to April 24, 2007 on a fixed capital investment of Rs. 2,76,13,000. The first date of production was April 19, 1999 whereas, the date of first sale was April 25, 1999. The installed annual production capacity of the unit was 25,200 MT. The Divisional Level (Trade Tax Exemption) Committee, Meerut, by its order dated November 11, 1999 allowed the application of the applicant and granted exemption from payment of tax to the extent of Rs. 3,71,49,000 being 150 per cent of the fixed capital investment, i.e., Rs. 2,76,13,000. A copy of eligibility certificate dated November 11, 1999 is enclosed as annexure 1 to the revision. The applicant installed second plant for undertaking expansion with fixed capital investment of Rs. 3,04,37,000 after achieving 80 per cent production of the installed annual production capacity of 20,759.213 MT, whereas 80 per cent comes to 20,160 MT and started commercial production in the second plant on December 29, 1999 by undertaking expansion scheme as per Explanation (5) to Section 4-A of "the Act".

(3.) The first installed capacity of the plant was 25,200 MT per year and the installed capacity of the second plant was 42,000 MT, thus the total capacity for exemption was 67,200 MT. The production and sales of industrial solvent of the first plant from April, 1999 and continued up to March, 2000 was 34,397.658 MT, whereas, up to month of December, 1999 the applicant achieved more than 80 per cent production of the installed capacity of the first plant, therefore, the applicant applied for expansion after achieving base production under expansion scheme of the second plant. On the recommendation of the General Manager, District Industries Centre, Meerut, for the grant of eligibility certificate under the expansion scheme the Divisional Level Committee, Meerut, considered the application dated May 25, 2000 (annexure 5) of applicant to issue an eligibility certificate under expansion scheme. Along with the application, the applicant also appended copy of the chart of production of the first plant and the second plant. A true copy of the composite chart is annexed as annexure 4 to the revision. A perusal of chart it is apparent that up to December 28, 1999 the applicant had achieved production of 20,759.213 MT whereas up to March 31, 2000 the total production of the first plant was 22,680 MT. The total production of the second plant after undertaking expansion from December 29, 1999 was 11,717.195 MT. The D.L.C. rejected the application on April 3, 2000 and later on the Divisional Level Committee (DLC) by its order dated July 3, 2000 also rejected the review application preferred by the applicant under Rule 25(3)(e) of the U.P. Trade Tax Rules, 1948.