- (1.) OM PRAKASH, J. The only question arising for consideration in this writ petition filed by the petitioner, a private limited company, engaged in the business of manufacture of single super phosphate a chemical fertilizer, is as to what is the date of its starting production.
(2.) IT is averred that the petitioner started dealing in chemical fertilizer, acids, chemicals, etc. , with effect from April 1, 1982 and was granted power connection on August 23, 1982 of minimum 5 H. P. load which is usually sanctioned for a commercial establishment, situate in an industrial area. IT is averred that since the petitioner started its because its business as a dealer in the industrial area, minimum 5 H. P. load was sanctioned through no industry was set up in the industrial area at that time. Attracted by a scheme dated September 30, 1982 (annexure 1 to the supplementary-affidavit), it is averred that the petitioner establishment a unit in the industrial area for the manufacture of single super phosphate during the period commencing from, October 1, 1982 to October 18, 1982 and raw material was purchased on October 2, 1982 which was utilised on October 11, 1982. The unit was registered as small-scale industry on October 11, 1982 and according to the petitioner first sale was effected on November 14, 1982. To take benefit of the scheme dated September 30, 1982, the petitioner made an application under section 4-A of the U. P. Trade Tax Act (briefly, "the Act") seeking an eligibility certificate on the ground that it was established after October 1, 1982 which was rejected by an order dated September 30, 1989 (annexure 4 to the writ petition ). The petitioner then made a review application before the Divisional Level Committee (respondent No. 2) On January 9, 1990 which too was rejected by the impugned order dated May 3, 1991 (annexure "7" to the writ petition) on the ground that the petitioner had purchased raw material on July 2, 1982 and obtained power connection on August 23, 1982 and, therefore, in the case of petitioner date of starting production was August 23, 1982. Since benefit of the scheme dated September 30, 1982 was available only to those unit which were set up during the period from October 1, 1982 to March 31, 1985, respondent No. 2 refused to grant the eligibility certificate to the petitioner. From the scheme dated September 30, 1982 (annexure 1 to the supplementary-affidavit), it was manifest that its main object was to give tax exemption to small, medium or large industrial unit which was set up during the period form October 1, 1982 to March 31, 1985. The claim of the petitioner is that it started its production on October 2, 1982 when raw material was purchased and prior to that the petitioner was simply a dealer in chemical fertilizer, acid, chemicals, etc. In para 7 of the counter-affidavit, it is averred that the petitioner made purchases of raw material on July 2, 1982 and obtained power connection on August 23, 1982 and, therefore, the date of granting power connection was the date of starting production in the case of the petitioner. Sri Bharat Ji Agrawal, learned counsel for the petitioner, submits that the date of starting production in the case of the petitioner has to be determined in the light of the rules which are contained in the Government order dated September 30, 1982 (annexure 2 to the supplementary-affidavit ). Rule 8 of such Rules requires the General Manager to consider several aspects for determining the date of starting production. When an application is made seeking and eligibility certificate, the General Manager has to determine as to when power connection was obtained and from which date power was used in connection with the actual production. He has to ensure that at least twenty-five per cent of the total load sanctioned was used for actual production and not for setting up a unit. The General Manager is also required to ascertain as to when raw material was purchased for the first time. If sanction of power connection precedes the date of purchase of raw material then exemption will be available from the date of purchase of raw material but if power connection was obtained after the date of purchase of raw material then exemption will be available from the date of obtaining the power connection. In view of such position emerging from the rule, Sri Bharat Ji Agrawal submits that the rules stress upon commencement of actual production and not an artificial definition. According to the respondents, of the two dates, namely, the date of purchasing raw material and the date of obtaining power connection whichever is later is the date of production. This, according to Sri Bharat Ji Agrawal is artificial definition of staring production but the rules as contained in the Government Order dated September 30, 1982 (annexure 2 to the supplementary-affidavit), argues Sri Bharat Ji Agrawal emphasis upon the actual date of production. We find force in the submission of Sri Bharat Ji Agrawal. When specific rules are made governing the date of starting production, there is no warrant to take resort to an artificial definition of the date of starting production.
(3.) IN para 5 of the supplementary-counter-affidavit reference has been made to the U. P. Sales Tax (Amendment) Act, 1984 (U. P. Act No. 22 of 1984) which shall be deemed to have come into force on October 12, 1983. Section 5 of the Amendment Act of 1984 substituted Explanation (ii) to section 4-A as follows : " (ii) 'date of starting production' means the date on which any raw material required for use in the manufacture or packing of the specified goods is purchased for the first time or the date of installation of power connection, where needed, whichever later. " Relying on Explanation (ii) which defines the date of starting production learned Standing Counsel submits that as in the case of the petitioner, power connection was installed later and, therefore, August 23, 1982 when power connection installed, became the date of starting production. We are not impressed by such submission of the learned Standing Counsel. The amending Act, i. e. , the U. P. Act No. 22 of 1984 was deemed to have come into force on October 12, 1983 and, therefore, Explanation (ii) as substituted by section 5 of the amending Act will not apply to the case of the petitioner. The date of starting production in the case of the petitioner will be determined by the rules as contained in the Government order dated September 30, 1982 (annexure 2 to the supplementary-affidavit) which requires the General Manager to determine as to when the power connection was installed and whether at least twenty-five per cent of the total load sanctioned was utilised in connection with the actual production and not merely for setting up a unit. Once this condition is fulfilled then if power connection precedes the date of purchase of raw material then the date of purchasing raw material will be the date of starting production and if the power connection was installed later then the date of installation of power connection will be taken as the date of starting production.;