ALOK INDUSTRIES Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) BY this petition under article 226 of the Constitution, petitioners M/s. Alok Industries and another have challenged the validity, legality and correctness of orders dated September 9, 1991 and January 27, 1992 (contained in annexures 3 and 6 to the writ petition) passed by the Divisional Level Committee, constituted under section 4-A of the U. P. Sales Tax Act (for short, "the Act"), respondent No. 2, whereby petitioners' application claiming exemption under section 4-A of the Act and the review application have been rejected on the ground that the lease deed of the premises on which the unit is installed was not registered on July 2, 1989, which is the date of first sale rather it was registered after July 2, 1989. Without entering into merits of the controversy raised in the petition, it may be mentioned that the matter in issue appears to be fully covered by a Division Bench decision of this Court rendered in P. P. S. Electronics Industries, Kanpur v. Stare of U. P. 1993 UPTC 853, wherein considering the scope of section 107 of the Transfer of Property Act as amended by U. P. Act No. 5 of 1976 it is held that the lease is effective from the date of its registration if the lease period is beyond one year. Giving reference of Mangalore Chemicals and Fertilizers Limited v. Deputy Commissioner of Commercial Taxes [1991] 83 STC 234 (SC); AIR 1992 SC 152, it is ruled that the underlying object of section 4-A of the Act is to promote the growth of industries. This is why clause (c) in Explanation (1) has been added with a view to ensuring that a new unit seeking exemption at least continues uninterruptedly for seven years and that is why clause (c) enjoins upon a manufacturer to obtain a lease of at least seven years, if the unit is established on the rented premises. However, if a valid lease is not taken then the right of the manufacturer to continue unit in the rented premises may be jeopardised. In the instant case assuming that on the date of first sale the lease deed was not registered but admittedly lease was registered on August 6, 1991, therefore, at least from this date, i. e. , with effect from August 6, 1991, certainly the petitioner is entitled to the benefit of section 4-A of the Act. In addition to above, proviso (iv) to sub-clause (1) of clause (6) of section 4-A of the Act is emphatic in this regard which reads as under : " (iv) the unit which has fulfilled all or any of the conditions specified in clauses (a) to (d) of the Explanation (1) on a date later than the date of commencement of the period of facility notified under sub-section (1) shall be deemed to be new unit for entitlement to the facility of exemption from tax only for part of the period, notified under sub-section (1), to be computed from the date on which all the conditions specified in clauses (a) to (d) of the said Explanation (1) are fulfilled, till the end of the period of such facility. " Thus the petitioner is entitled to the benefit of section 4-A of the Act with effect from August 6, 1991. Accordingly in our considered opinion, the impugned orders dated September 9, 1991 and January 27, 1992 are erroneous, therefore, set aside and the case is remanded to the Divisional Level Committee, respondent No. 2 for considering petitioner's application afresh and for deciding the same in the light of observations made above. The writ petition is finally disposed of accordingly. Writ petition disposed of accordingly. .