- (1.) Present revision under Section 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") is directed against the order of the Full Bench of the Tribunal dated 1st December, 2006. The brief facts of the case giving rise to the present revision are that the applicant is a proprietorship concern and established a factory at village Raibha, Bodla Bichpuri Achhnera Road, Tehsil Kerawal, District Agra for the manufacture of thinner, rubber solution and varnish. The applicant was registered under the U.P. Trade Tax Act and Central Sales Tax Act. It was claimed that in the unit, first purchase of the raw material was made on 15th January, 2001. The first production was made on 26.09.2001 and first sale was made on 11.10.2001. The applicant claimed that it was new unit as contemplated under Section 4-A of the Act and for the exemption on the turnover of the manufactured product an application under Section 4-A of the Act was moved on 30th October, 2001. It was claimed that the land and building were taken on lease initially vide agreements dated 6.7.1999 and 21.07.1999 which were not the registered lease deed, but subsequently, a registered lease deed was executed on 29.09.2001. The total investment claimed to have been made on the land, building, machinery etc was at Rs. 24,45,176.45 paise which includes investment towards land and building at Rs. 8,60,262/- and the balance amount relates to the machinery, pumping set, tanks, pipe fitting, mixture etc. It was claimed that in the unit six tanks have been installed. It was claimed by the applicant that it had carried on test production on 5.4.2000 by mixing material manually by hand and whatever the goods have been prepared in test production, the same was sold for Rs. 4,800/- on 5.4.2000 on the same day. Thereafter the machinery were installed and the electricity connection was also installed on 10.9.2001. The General Manager, District Industries Centre, Agra initially issued provisional Registration Certificates as S.S.I. Unit on 15.07.1999 and later on when the production was started in the Unit and a permanent Registration Certificate was issued on U0.2001 showing the date of production as 27.09.2001.
(2.) The exemption was claimed under Notification dated 24.08.2000 issued under Section 4-A of the Act. The exemption application was rejected ex-parte by the Divisional Level Committee. Against the order of the Divisional Level Committee, applicant filed appeal before the Tribunal which was allowed vide order dated 16.01.2004 and the matter was remanded back to the Divisional Level Committee for decision afresh. Tribunal has remanded back the matter with the direction to the Divisional Level Committee to issue show cause notice showing the grounds on which it preferred to reject the application. In pursuance thereof, appears that show cause notice was issued by the Divisional Level Committee or 27.02.2004 which has been replied by the applicant on 31.03.2004. The Divisional Level Committee has again rejected the application vide order dated 25.01.2005. Against the said order, the applicant preferred an appeal before the Tribunal which was decided vide order dated 5.7.2005. Tribunal by the aforesaid order again remanded back the matter to the Divisional Level Committee. Being aggrieved by the said order, applicant filed Trade Tax Revision No. 1152 of 2005 before this Court. This Court vide order dated 14.09.2005 allowed the revision, set aside the order of the Tribunal and remanded back the matter to the Tribunal to decide the appeal afresh on merit. Tribunal by the impugned order dismissed the appeal Tribunal has held as follows: We have gone through the copy of the lease deed, filed by the appellant. The first lease deed was executed on 6.7.1999 by Baleshwar Prasad Agarwal as first party and Asian Petro Chemicals through its proprietor Pankaj Kumar Agarwal S/O Baleshwar Prasad Agarwal as second party. The first party is the owner and the second party is tenant. In this lease deed, which was executed before the notary, Agra, there is no description of any tank. Subsequently on 21.07.1999 a deed was executed as an agreement deed and a clarification has been added to the deed that on the plot, which has been lease out, an old tank is situated which is embedded to earth. The second party will have the right to use of the tank and if necessary may be removed by the second party and the first party will have no objection. So it appears that only after 15 days, this deed was executed. This deed has been executed for the purpose of showing the existence of tank on plot No. 1040 which belong to the father of the proprietor of the unit Sri Baleshwar Prasad Agarwal. In the first deed dated 6.7.1999 which was executed, pointing out this fact in para-3 that the tenancy will start from 1.5.1999 for twenty years. It is a permanent lease and Under Section 17(b) of the Indian Registration Act, 1908, this document is compulsorily registrable. The lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent will be required registration and affect of non registration has been dealt with Under Section 49 of Indian Registration Act, which contains as follows: No document required by Section 17 (or by any provision of the Transfer of Property Act, 1982) to be registered shall- (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction effecting such property or conferring such power, unless it has been registered. (provided that an unregistered document affecting immovable property and required by this Act, or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of Section 53-A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument. So, it appears that the deed dated 6.7.1999 is inadmissible in evidence and the addition in that deed by agreement dated 21.07.1999 is also inadmissible. The appellant was realizing the legal lacunae and subsequently has executed a registered lease deed from Balashwar Prasad Agarwal, the first party on 24.09.2001. In that deed there is no description of the old tank. So from the perusal of the registered deed it transpires that on 24.09.2001, there was no tank in existence. But at the time of survey dated 25.07.1999 and 11.05.2000 the tank was found in which there was storage of 12,000 ltrs. Imported kerosene oil Shows the existence of the old tank has been established by the two survey dated 25.07.1999 and 11.05.2000. At the time of survey dated 24.01.2003, the said old tank was removed, but in the first unregistered lease deed dated 6.7.1999, there is no mention of the old tank. For correction of the mistake an agreement was executed dated 21.07.1999 which is unregistered and both the agreements are inadmissible for want of evidence and on 24.09.2001 subsequently a registered lease deed was executed by Sri Baleshwar Prasad Agarwal, the owner of the plot number 1040 and Pankaj Kumar Agarwal, the proprietor of the Unit. In that deed there is no mention of the old tank so it appears that after the date of production, the old tank was removed, but it is proved that the tank was not part of the plot, at the time of lease. It was procured or purchased by the appellant and the old tank was being used for production purposes. The learned Counsel for the appellant has argued that the tank is not a machinery. No doubt, the tank is not a machinery. The argument of the learned Counsel for the appellant is correct. Under Section 4-A(2), "New Unit" has been defined as after March 31,1999 means a factory or workshop set up by a dealer after such date and satisfying the conditions laid down under this Act or rules or notifications made there under with regard to such factory or workshop and includes an industrial unit manufacturing the same goods at any other place in the state or an industrial unit manufacturing any other goods on, or adjacent to, the site of an existing factory or workshop, but does not include (a) any factory or workshop using machinery, plant, equipment, apparatus or components already used or acquired for use in any other factory or workshop in India other than boilers and generators and other than any machinery, plant, equipment, apparatus or components sold to it by any Government Company or any Corporation owned or controlled by the Central or State Government. So it appears that not only machinery, but the plant, equipment, apparatus or components, already used or acquired for use in any other factory or workshop in India, other than boilers and generators and other than any machinery, plant, equipment, apparatus or components sold to it by any Government Company or any Corporation owned or controlled by the Central or State Government, will not be entitled to exemption Under Section 4 of the Act. No doubt, the tank is not a machinery, but it is a part of plant. So the old tank which naturally has been used in any other factory, debars the appellant from availing the benefit of Section 4 of the Act. No other point have been pressed before us. As the old tank was used which was part of the plant and which had been already used in other unit so there is no need to decide any other point. So considering the entire facts and circumstances of the case, we are of the view that this appeal has got no force and must be dismissed. The appeal is dismissed and the order dated 25.1.2005, passed by the Additional Director of Industries, Agra Division, Agra is confirmed.
(3.) Heard Sri R.R. Agrawal, learned Counsel for the applicant and Sri B.K. pandey, learned Standing Counsel. Learned Counsel for the applicant submitted that the old tank was embedded to earth which came to the applicant along with land which was taken on lease. He submitted that the said tank was not used in the manufacturing. For the purposes of manufacturing six new tanks have been installed. He submitted that the old tank was found at the time of surveys dated 25.07.1999 and 11.05.2000, but subsequently it was removed and was not found at the time of surveys dated 20.04.2002 and 30.01.2003. He submitted that on the date of production and first sale i.e. on 26.09.2001 and 11.10.2001 respectively, the old tank was not available. It is also submitted that the old tank was never used in the manufacturing of the product. The value of the old tank has also not been included in the capital investment. The old tank was removed and it was lying as a scrap. He submitted that the value of the old tank in the form of scrap was very nominal and thus, having regard to the total investment, its value being negligible is liable to be ignored. He further submitted that it has to be examined whether the new unit in substance had come into existence or not. In support of his claim, he relied upon the decision in the case of Progressive Components (Pvt.) Ltd., Agra v. Commissioner of Trade Tax,2000 UPTC 131, Sonar Metal Industries v. The State of U.P. and Ors.,2003 22 NTN 103, H.M. Industries and Anr. v. Sales Tax Officer and Anr.,2003 22 NTN 354, Bajaj Tempo Ltd., Bombay v. Commissioner of Income Tax, Bombay, 1992 UPTC 857, Kanta Granites Pvt. Ltd v. Commissioner of Trade Tax, U.P., 2004 40 STR 1077 and Mahabir Paints and Adhesives Pvt. Ltd., Kanpur v. Commissioner of Sales Tax,2006 43 STR 236. Sri B.K. Pandey, learned Standing Counsel submitted that the trial production was started on 5.4.2000. The trial production was also covered within the definition of production as contemplated under Section 4-A of the Act. He submitted that at the time of survey dated 11.5.2000 old tank was found filled with Kerosene Oil, which was the raw material for the manufacture of thinner and, therefore, it is clear that the old tank had been used in the manufacturing and since the old tank has been used in the manufacturing, the unit is not eligible for exemption in view of the definition of the new unit provided in Explanation-II of Section 4-A of the Act.;