RAMRAJ RICE MILLS Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) HEARD the learned counsel for the petitioner and the learned Standing Counsel. In view of the exchange of affidavits as also agreed to by the learned counsel for the parties, the petition is being disposed of finally at the stage of admission. The petitioner seeks quashing the order dated March 19, 1988 (annexure "3") rejecting the petitioner's application for grant of exemption under section 4-A of the U. P. Sales Tax Act, 1948 and order dated May 28, 1988 (annexure "5") rejecting the review application. The petitioner made an application under the aforesaid provision for grant of the eligibility certificate, which is rejected by the respondent No. 2. The rejection is on the ground that the lease deed is not registered nor it contains period of lease; petitioner though has a generator, but the same has not been mentioned in the list of machinery nor its vouchers have been vouched and finally, the unit was closed from April 1, 1986 to October 20, 1986 that is to say, for a period of more than six months at a stretch, hence the unit is not entitled for exemption. Petitioner thereafter filed review along with registered lease deed further stating that it purchased generator from M/s. Jeewan Diesels, Delhi on November 6, 1985, annexing its vouchers. Further case is that since generator is not within the meaning of machinery of the unit hence voucher was not filed earlier. However, petitioner's review was also rejected on May 28, 1988. The petitioner has challenged the said orders. The case of the petitioner is that the requirement of registered lease deed came into effect from March 6, 1988, by means of a circular and prior to that, there was no such requirement specially when the petitioner had started its production on October 18, 1984. Reliance was placed on Commissioner's clarificatory circular dated February 1, 1988, that a unit starting production prior to March 6, 1986, which is the petitioner's case, the requirement of a registered lease deed has been relaxed. So far as the first contention is concerned, it is covered by a decision of this Court in Shakti Oil Industries v. State of U. P. 199l UPTC 466. It has been held by virtue of explanation, as substituted by the U. P. Ordinance No. 17 of 1990, condition regarding lease for the period of not less than seven years is inapplicable to unit starting production before March 6, 1986. It was held that the application under section 4-A of the U. P. Sales Tax Act cannot be rejected on the ground that the lease deed was not registered on the date of starting production hence the impugned order rejecting the application of the petitioner on the ground that the lease deed being not registered on the facts of the case is not sustainable. Coming to the second ground, namely rejection on the ground of the petitioner not submitting the vouchers for the generator at the time of claiming exemption, it is contended that the generator having been purchased on November 6, 1985, from M/s. Jeewan Diesels, Delhi after filing of the exemption application, the same could not be incorporated in the list of vouchers, hence the same could not be filed along with the said exemption application, but the same was filed subsequently along with the review application and that ought to have been considered by the respondent No. 2. The second contention is that the generator was used for producing electricity hence it could not be said to be machinery. Thus, the findings even otherwise of the respondent No. 2 could not be accepted. We find this question is also covered by the decision of this Court reported in 1991 UPTC 514 (Arian Electrical Company v. State of U. P. ). In this case, it was held that in view of the amendment by U. P. Ordinance No. 17 of 1990, it was not necessary for a power connection to be in the name of the unit nor the generator used by a unit should belong to the said unit. This decision supports the case of the petitioner; hence finding of respondent No. 2 of the absence of vouchers pertaining to generator disentitles the petitioner for grant of eligibility certificate is also not sustainable. In view of this decision and also the decision in Neel Kamal Oil Mill v. State of U. P. 1994 UPTC 606, the matter is covered as against the respondents and hence the rejection of the petitioner's claim on the second ground by the respondent No. 2 is also not sustainable. Finally, rejection of the petitioner's claim on the ground that the petitioner's unit was closed for a period more than six months, the finding is that in view of the closure from April 1, 1986, to October 20, 1986, the period being more than six months, the petitioner is not entitled to the grant of exemption. The contention on behalf of the petitioner is that even if it is treated to be a closure within six months, he is entitled for exemption at least for the period the unit has continuously run, that is to say, till March 31, 1986. Reliance was placed by the petitioner on the Commissioner's circular dated March 17, 1988, for the said relief. On behalf of the respondent the learned Standing Counsel, urged that this will apply only to a unit which is declared as a sick unit and since the petitioner's unit was not declared as a sick unit, it would not be entitled for the same. We would not like to enter into a controversy which is not relevant in this case. Once it is not disputed that the petitioner's unit continued without any break for more than six months, that is, till March 31, 1986, there is no justification for the respondent to decline to grant the eligibility certificate to the petitioner at least till March 31, 1986. With the above observations, the writ petition is allowed. The order dated March 28, 1988, rejecting the review application of the petitioner (annexure "5" to the writ petition) and order dated March 19, 1988 (annexure "3") is hereby quashed with the direction to respondent No. 2 to issue the eligibility certificate to the petitioner in the light of the observations made by this Court earlier. In the circumstances of the case, the parties will bear their own costs. Petition allowed. .