- (1.) The order under appeal was delivered by a Division Bench of the High court at Allahabad on a writ petition filed by the respondents. The appeal by special leave is filed by the State.
(2.) The respondents are engaged in the business of manufacturing rubber belting. They sought an exemption from the payment of sales tax under the provisions of Section 4-A of the U. P. Sales Tax Act on the ground that the machinery that they used in their unit was new. The claim was rejected by the divisional Level Committee which found that the respondents had used an old boiler. The High Court observed that even assuming that the total cost of the machinery was Rs 3,88,840, as averred by the State, the question for consideration was whether the machinery could be branded as old simply because an old boiler worth Rs 18,400 had been used. The High Court followed an earlier decision, namely, Amit Plastic Industry v. Divisional level Committee, Meerut where it had been held that if a substantial part of the machinery was new, then the claim under Section 4-A could not be rejected merely on the ground that a part of the machinery, of insignificant value, was old. Accordingly, the writ petition by the respondents was allowed.
(3.) For the purposes of Section 4-A of the U. P. Sales Tax Act, a new unit, during the period with which we are concerned here, has been explained to be one "using machinery, accessories or components not already used, or acquired for use, in any other factory or workshop in India". Learned counsel for the State drew our attention to the judgment of this Court in State Level committee v. Morgardshammar India Ltd. and submitted that the judgment of the Allahabad High Court in the case of Amit Plastic Industry had, implicitly, been set aside. In any event, he submitted that the respondents had used a boiler of the value of Rs 18,400 on their own showing and this was not something of such insignificant value that it could be ignored.;