M. KATJU, J. ( 1 ) THIS writ petition has been filed against the impugned order of the Divisional Level committee, Meerut dated March 30, 1991 whereby the review application of the petitioner under section 4-A of the U. P. Sales Tax, 1948 (now known as U. P. Trade Tax Act) has been rejected. ( 2 ) HEARD learned counsel for the parties. ( 3 ) SECTION 4-A provides for a tax holiday or exemption from payment of sales tax for new industries for a few years so as to encourage new industries being set up in the State. ( 4 ) THE petitioner is a partnership firm which established a new industrial unit for the manufacture of sodium silicate at its factory situate at Hapur Road, Meerut. The petitioner applied for registration with the Director of Industries as a small-scale industries and it was granted registration certificate dated August 6/7, 1984 by the Directorate of Industries, U. P. , vide annexure 1 to the writ petition. The petitioner then applied for exemption under section 4-A vide annexure 2 to the writ petition. However, the respondent No. 2 rejected the petitioners application under section 4-A on the ground that the petitioner had purchased a machine (Digester) for a sum of Rs. 44,706 on February 5, 1984 from M/s. Nanda Chemicals, Ghaziabad, who are manufacturing the same goods which the petitioners are manufacturing. True copy of the order dated December 10, 1987 is annexure 3 to the writ petition. ( 5 ) THEREAFTER, the petitioner filled a review application before the Divisional Level Committee on march 28, 1988 vide annexure 4 to the writ petition. In this application it was mentioned that the said machinery (Digestor) was neither used by M/s. Nanda Chemicals, Ghaziabad, nor it was acquired for use by the said concern. The delivery of the Digestor was never taken by M/s. Nanda Chemicals, Ghaziabad, from the fabricators M/s. Karim Engineering Works, Ghaziabad, but the delivery of the machine was taken by the petitioner directly from M/s. Karim engineering Works. The delivery of the Digestor was never taken by M/s. Nanda Chemicals, Ghaziabad, from the fabricators M/s. Karim Engineering Works, Ghaziabad, but the delivery of the machine was taken by the petitioner directly from M/s. Karim engineering Works. It was mentioned in the review application that although M/s. Nanda chemicals, Ghaziabad, had ordered for the fabrication of the said machinery by M/s. Karim engineering Works but the business of M/s. Nanda Chemicals was closed on December 31, 1982 and the said machinery was never acquired for use by M/s. Nanda Chemicals and in fact delivery was never taken by the said concern. ( 6 ) IN the review application it was pointed out that M/s. Nanda Chemicals has closed its business on December 31, 1982 and information about the closure was given to the Sales Tax Officer, ghaziabad, on January 8, 1983 and this fact was mentioned in the assessment order of M/s. Nanda Chemicals, Ghaziabad, for the assessment year 1982-83 vide annexure 5 to the writ petition. It was mentioned in the review application that since the order for fabrication of the digestor was given by M/s. Nanda Chemicals, hence the saidconcern only gave challan to the petitioner but no bill was given. The Digestor was sent by the consignor M/s. Karim Engineering works to the petitioner directly as consignee vide transport receipt annexure 6 to the writ petition. The petitioner specifically made a request in the review application that an enquiry be made by the Sales Tax Officer, Ghaziabad, regarding the closure of the business of M/s. Nanda chemicals in December, 1982 and also as to whether M/s. Nanda Chemicals had ever sold the digestor to the petitioner in 1984 or whether any delivery was taken by M/s. Nanda Chemicals. In spite of this request no enquiry in this connection was made by the respondent No. 4 and the review application was rejected by the impugned order dated February 21, 1989 vide annexure 7 to the writ petition. ( 7 ) AGGRIEVED the petitioner filed writ petition No. 519 of 1989 before this Court which was allowed on February 5, 1990, Calcutta Silicate and Chemical Industries v. State of U. P. 1990 uptc 516. vide annexure 8 to the writ petition and the matter was remanded to the respondent no. 2 vide, judgment dated February 5, 1990. ( 7 ) AGGRIEVED the petitioner filed writ petition No. 519 of 1989 before this Court which was allowed on February 5, 1990, Calcutta Silicate and Chemical Industries v. State of U. P. 1990 uptc 516. vide annexure 8 to the writ petition and the matter was remanded to the respondent no. 2 vide, judgment dated February 5, 1990. A perusal of the said judgment shows that the court held that the respondent No. 2 did not address itself to the question whether delivery of the digestor has ever taken by M/s. Nanda Chemicals, Ghaziabad, or whether the petitioner directly took delivery of the same. ( 8 ) WHEN the matter came again before the respondent No. 2 the petitioner filed an application stating that the petitioner had taken delivery of Digestor directly from the fabricator M/s. Karim engineering Works and the payment was in fact made by the petitioner by various cheques and in cash on various dates. True copy of the said application dated May 4, 1990 is annexure 9 to the writ petition. In the meantime the petitioner also received a letter dated April 7, 1989 from m/s. Nanda Chemicals, admitting the fact that its business was closed on December 31, 1982 and although it gave an order to the fabricator for the Digestor but as it could not carry on its business hence the delivery of the Digestor had not been taken by it. The petitioner came into contact with M/s. Nanda Chemicals and it was agreed that the petitioner will pay the advance amount to the fabricator and take the delivery directly from it. True copy of the letter dated April 7, 1989 is annexure 10 to the writ petition. M/s. Karim Engineering Works had also issued a certificate dated April 7, 1989 stating that delivery of the said Digestor was taken by the petitioner vide annexure 11 to the writ petition. In spite of this voluminous evidence in favour of the petitioner the respondent No. 2 rejected the review application by order dated March 30, 1991 annexure 12 to the writ petition. Aggrieved this writ petition has been in this Court. ( 9 ) A counter-affidavit has been filed and we have perused the same. In paragraphs 6 and 7 it has been stated that the machinery, i. e. , the digestor was old and hence the petitioner was not entitled for exemption. Aggrieved this writ petition has been in this Court. ( 9 ) A counter-affidavit has been filed and we have perused the same. In paragraphs 6 and 7 it has been stated that the machinery, i. e. , the digestor was old and hence the petitioner was not entitled for exemption. In paragraph 19 it is admitted that M/s. Nanda Chemicals, Ghaziabad, had closed its business but the petitioners application was rejected because M/s. Nanda Chemicals had placed the order for fabrication of digestor from M/s. Karim Engineering Works. ( 10 ) A rejoinder affidavit has also been filed and we have perused the same. ( 11 ) IN the impugned order dated March 30, 1991 it has been stated in paragraph 3 that it was m/s. Nanda Chemicals which placed the order for digestor and the challan has been given to it and it has paid Rs. 40,000 in this connection. Hence it was held that M/ s. Nanda Chemicals has used the digestor and therefore it has to be held to be an old machinery. ( 12 ) IN our opinion the impugned order is wholly arbitrary and illegal and deserves to be quashed. It is not denied in the counter-affidavit that M/s. Nanda Chemicals closed its business on december 31, 1982, rather in paragraph 19 of the counter-affidavit this fact has been admitted. This Court had earlier by its judgment dated February 5, 1990 Calcutta Silicate and Chemical industries v. State of U. P. 1990 UPTC 516. , annexure 8 to the writ petition had directed the respondent No. 2 to address itself to a question whether the delivery had been taken directly by the petitioner or by M/s. Nanda Chemicals, Ghaziabad, but this question has been totally ignored in the impugned order. The facts and evidence in the case clearly shows that the delivery was given by M/s. Karim Engineering Works directly to the petitioner and not to M/s. Nanda chemicals as is evident from the letter of M/s. Nanda Chemicals dated April 7, 1989, annexure 10 to the writ petition and the certificate of M/s. Karim Engineering Works dated April 7, 1989, annexure 11 to the writ petition. Hence in our opinion the machinery (digestor) has to be held to be new and not old, and the observation to the contrary in the impugned order is wholly arbitrary, illegal and without any basis. Hence in our opinion the machinery (digestor) has to be held to be new and not old, and the observation to the contrary in the impugned order is wholly arbitrary, illegal and without any basis. ( 13 ) IN Ajay Engineering Corporation v. State of U. P. 1995 UPTC 1041 a division Bench of this court held that the rejection of a review application holding the machinery to be old without adverting to the relevant documents filed by the petitioner is illegal. The same view was taken in a. S. Cables v. State of U. P. 1995 UPTC 772. ( 14 ) IN Sushil Oil Industry v. State of U. P. 1995 UPTC 1177 a division Bench of this Court held that an enquiry conducted behind the back of the petitioner while disposing of the application under section 4-A is not binding. ( 15 ) IN Commissioner of Sales Tax v. Industrial Coal Enterprises [1999] 114 STC 365; 1999 uptc 250, the Supreme Court held that the purpose of section 4-A is to promote development of industries and hence the provision has to be liberally construed. ( 16 ) ON the facts of the case we therefore hold that the machinery was new and the review application was arbitrarily and illegally rejected by the impugned order. ( 17 ) WE, therefore allow this petition and quash the impugned order dated March 30, 1991 and december 10, 1987 and direct that the petitioner shall be given eligibility certificate as prayed for by the petitioner with all consequential benefits. .