Research › Search › Judgment

Allahabad High Court · body

2010 DIGILAW 1289 (ALL)

DHAMPUR SUGAR MILLS v. COMMERCIAL TAX TRIBUNAL

2010-04-21

RAKESH SHARMA

body2010
JUDGMENT RAKESH SHARMA, J. - Heard Ms. Pushpila Bisht, learned counsel for the revisionist and learned standing counsel for the respondents. This value added tax (VAT) revision/trade tax revision is preferred under section 58 of the VAT Ordinance of 2007 assailing the order dated March 26, 2008 passed by the Full Bench of the Trade Tax Tribunal, U.P., Lucknow, the impugned order. The revisionist - corporation has been denied certain benefits accruing to it as spelt out in the notification dated February 21, 1997 issued under section 4A of the U.P. Trade Tax Act, 1948. Some other benefits for which the revisionist - company was entitled were also denied to it. The revisionist is a limited company, registered under the U.P. Trade Tax Act, 1948, Central Sales Tax Act, 1956 and the Value Added Tax (VAT) Act, etc. M/s. Dhampur Sugar Mills Ltd. (hereinafter referred as, "the company") is having its registered office at Dhampur, District Bijnore, U.P. It carries out business of manufacturing of sugar, alcohols, molasses, other by-products and paper. It has several units, sugar mills at Dhampur, District Bijnore, Rauzagaon, District Barabanki, Asmoli, District Moradabad, Asmoli, District Lucknow and other places. The company has its sales depots and offices at various places. In the year 1991 it opened its Dhampur unit for manufacturing chemicals and thereafter in the year 1993 it opened another unit manufacturing particle board at Agahwanpur in District Moradabad. The company's progress continued. It opened another unit for manufacturing sugar in the year 1993 in Rauzagaon District Barabanki and in the year 1995 it established a unit for manufacturing sugar at Asmoli District Moradabad, U.P. The turnover of sales and purchases of all these sugar mills units are assessed by the assessing officer, trade tax/VAT at Dhampur treating M/s. Dhampur Sugar Mills Ltd., as dealer, as per the provisions of section 7 of the U.P. Trade Tax Act and section 9(2) of the Central Sales Tax Act. The company was issued an industrial licence from the appropriate authority for expanding its existing capacity of cane crushing at Dhampur from 9000 to 10000 tonnes per day of sugarcane, at Rauzagaon Sugar Mill crushing capacity was expanded from 2500 to 5000 tonnes per day, at Asmoli (Moradabad) sugar mills it was raised from 2500 to 5000 tonnes per day. The company was issued an industrial licence from the appropriate authority for expanding its existing capacity of cane crushing at Dhampur from 9000 to 10000 tonnes per day of sugarcane, at Rauzagaon Sugar Mill crushing capacity was expanded from 2500 to 5000 tonnes per day, at Asmoli (Moradabad) sugar mills it was raised from 2500 to 5000 tonnes per day. This expansion was allowed to the mills under the provisions of the Industrial (Development and Regulation) Act, 1951. Similarly the company was permitted to raise production of chemicals by the State Excise Department. The expansion scheme was implemented during the period from December 1, 1994 to March 31, 2000. Huge additional investment of Rs. 107.97 crores in fixed capital investment was made by the company. The State Government with the object of increasing more production of goods by the sugar mills and factories and development of the industry had formulated a special scheme for providing tax incentives and other benefits to the industries who were desirous of expanding their production. Specific notification was issued on February 21, 1997 by the State Government under section 4A of the Trade Tax Act. By this notification dated February 21, 1997 the expansions and developments made during the period from December 1, 1994 to March 31, 2000 were covered. The production incentive, tax benefits, etc., were available to such industries in all the districts of the State of U.P. Being covered by the scheme M/s. Dhampur Sugar Mills Ltd., group of industries, the company filed an application before the General Manager, District Industry Centre, Bijnore on May 17, 2000 seeking the above benefits. It claimed exemptions under the notification dated February 21, 1997 on the ground of expansion, diversification and modernization. The application was rejected by an order dated October 31, 2000 on three grounds, namely, (a) a joint application for multiple units is not permissible under the Rules; (b) the application was time-barred; and (c) the company was in arrears of tax for Rs. 1,742.25 lakhs. The company filed an appeal to the Trade Tax Tribunal, against this order. This appeal was rejected by an order dated March 20, 2001. The Trade Tax Tribunal held that every unit was a separate unit and that a joint application could not be made. The company then filed a Trade Tax Revision No. 29 of 2001 before the High Court. This appeal was rejected by an order dated March 20, 2001. The Trade Tax Tribunal held that every unit was a separate unit and that a joint application could not be made. The company then filed a Trade Tax Revision No. 29 of 2001 before the High Court. The High Court had allowed the revision and set aside the orders dated October 30, 2000 and March 20, 2001. The High Court had directed the concerned authority to issue an eligibility certificate under section 4A for the benefit of tax rebate on all goods manufactured as well as on the waste products. The High Court had further directed reimbursement of amounts paid earlier with interest thereon at nine per cent from the date of deposit. This judgment and order passed by the honourable High Court on May 24, 2002 was challenged by the State Government by filing a Civil Appeal No. 6635 of 2003 (Commissioner of Trade Tax, U.P. v. D.S.M. Group of Industries [2005] 139 STC 269) in the Supreme Court of India. This appeal was disposed of with the directions that the matter be remitted back to the Divisional Level Committee which shall decide the application of the revisionist - company on merits within a period of six months from the date of the judgment of honourable apex court. An interim order was granted indicating that the company could not be said to be treated under arrears of tax till the decision is taken by the Divisional Level Committee. The Divisional Level Committee had dismissed the application of the revisionist on April 22, 2006. The said committee did not find the revisionist - company entitled for allowing benefits and incentives. An appeal was preferred to the Full Bench of the Trade Tax Tribunal, Lucknow, U.P. which was registered as Appeal No. 27 of 2006 (M/s. Dhampur Sugar Mills Ltd., Dhampur, Bijnore v. Divisional Level Committee, Moradabad). This appeal was dismissed by the Tribunal on March 26, 2008. The Tribunal has in fact relied on the earlier decision taken by the similar committee on October 31, 2000 against the decision rendered by the Tribunal on March 26, 2008. The revisionist has preferred this revision and the same has been admitted on May 23, 2008. This appeal was dismissed by the Tribunal on March 26, 2008. The Tribunal has in fact relied on the earlier decision taken by the similar committee on October 31, 2000 against the decision rendered by the Tribunal on March 26, 2008. The revisionist has preferred this revision and the same has been admitted on May 23, 2008. The following questions of law have been raised in this revision : (a) Whether the order of the Trade Tax Tribunal is not bad in law because the Tribunal had wrongly disallowed the relief claimed by the revisionist under section 4A of the U.P. Trade Tax Act, 1948 ? (b) Whether the appellate authority as well as the Divisional Level Committee acted in consonance with section 4A of the U.P. Trade Tax Act, 1948 while passing the impugned order ? (c) Whether the benefit on all types of alcohols could be denied to the revisionist against the provisions of notification dated February 21, 1997 issued under section 4A and contrary to the admitted documents and record for expansion during the period covered by this notification ? (d) Whether the Trade Tax Tribunal order is bad in law for denying the benefit of waste products and power by ignoring condition 3(e) of the notification dated February 21, 1997 issued under section 4A of the U.P. Trade Tax Act ? (e) Whether the Trade Tax Tribunal is correct in law in not considering the claim of the appellant for Asmoli unit as a new unit against the dictum of the honourable Supreme Court order dated December 9, 2004 ([2005] 139 STC 269) ? (f) Whether the Trade Tax Tribunal is correct in law in not following its own principle adopted in the impugned order for calculating the base production of sugar and molasses in case of expansion of the Asmoli unit ? (g) Whether the Trade Tax Tribunal is correct in law in denying the benefit to Mansurpur factory on any reason other than that mentioned in the order of the Divisional Level Committee ? (h) Whether the Trade Tax Tribunal is correct in law in denying the benefit of Mansurpur Sugar Mills when the respondent for the purpose of assessment of tax had accepted earlier that the Mansurpur Sugar Mills is branch of the Dhampur Sugar Mills Ltd., and against this acceptance no appeal was filed ? (h) Whether the Trade Tax Tribunal is correct in law in denying the benefit of Mansurpur Sugar Mills when the respondent for the purpose of assessment of tax had accepted earlier that the Mansurpur Sugar Mills is branch of the Dhampur Sugar Mills Ltd., and against this acceptance no appeal was filed ? (i) Whether the Trade Tax Tribunal is correct in law in ignoring the provisions of section 4A for not allowing the benefit of Mansurpur Sugar Mills against the provision of section 4A(5) of the Act ? (j) Whether the respondents were legally right in holding the claim of the Mansurpur Sugar Factory as time-barred ? (k) Whether the Divisional Level Committee and the appellate authority erred in rejecting the benefit on additional investment made by the revisionist which has been admitted and certified by the chartered accountant ? (l) Whether the certificate issued by the chartered accountant as per clause 5(c) of the notification dated February 21, 1997 could have been ignored ? (m) Whether the benefit claimed by the revisionist under the notification dated February 21, 1997 could have been denied despite acceptance of the eligibility for the benefit under the said notification ? (n) Whether the Department and the appellate authority was right in applying the case of Kajaria Ceramics [2005] 141 STC 406 (SC) when the issue was already settled in respect of the revisionist by the Supreme Court in its judgment and order dated December 9, 2004 ([2005] 139 STC 269) ? (o) Whether the Trade Tax Tribunal is correct in law in denying the investment of power plant and on investment through leasing against the Explanation 4 of section 4A of the Act ? Miss Pushpila Bisht, learned counsel for the revisionist - company, has placed before the court the chronology of events as stated above. According to her M/s. Dhampur Sugar Mills Ltd., having its registered office at Dhampur, District Bijnore, established its plant in 1991 for manufacturing chemicals, namely, acetic acid, acetic anhydride and acetaldehyde. The company has grown up further and expanded its operations as indicated in the foregoing paras. According to her M/s. Dhampur Sugar Mills Ltd., having its registered office at Dhampur, District Bijnore, established its plant in 1991 for manufacturing chemicals, namely, acetic acid, acetic anhydride and acetaldehyde. The company has grown up further and expanded its operations as indicated in the foregoing paras. The learned counsel for the revisionist - company contended that the company, M/s. Dhampur Mills Ltd., is a manufacturer and is registered as a dealer with Trade Tax Department under rule 6A with the assessing officer at Dhampur District Bijnore, U.P., for all its factories situated within the State of Uttar Pradesh. M/s. Dhampur Sugar Mills Ltd. (company) after investing an amount of more than 50 crores during the period December 1, 1994 to March 31, 2000 for purposes of expanding the capacity of their sugar mills at Dhampur District Bijnore, U.P., Rauzagaon, District Barabanki and for establishing a new unit in 1995 at Asmoli District, Moradabad as well as also undertook expansion of their existing capacity of Asmoli during the period from 1995 to March 31, 2000 as also making the investment for purposes of expansion for the product manufactured (alcohol, acetic acid, acetaldehyde and acetic anhydride) before December 1, 1994. The investment for purposes of producing diversified goods, namely, ethyl acetate, carbon dioxide and oxalic acid was also made during the period December 1, 1994 to March 31, 2000. Notification No. TT-2-640/11-9(460)-94 dated February 21, 1997 as well as Notification No. 641 were issued in exercise of powers under section 4A of the U.P. Trade Tax Act, 1948 by the Trade Tax Department providing for exemptions in clause (6) of the Explanation of section 4A to be granted to an undertaking which made a fixed capital investment of Rs. 50 crores or more for expansion, modernization or diversification or backward integration. The revisionist - company on May 17, 2000 finding themselves eligible under Notification Nos. 640 and 641 dated February 21, 1997 for claiming the exemption on the additional fixed capital investment made during the period from December 1, 1994 to March 31, 2000 exceeding the investment of Rs. 50 crores in expansion and diversification had filed their application before the General Manager, District Industry Centre, Bijnore. 640 and 641 dated February 21, 1997 for claiming the exemption on the additional fixed capital investment made during the period from December 1, 1994 to March 31, 2000 exceeding the investment of Rs. 50 crores in expansion and diversification had filed their application before the General Manager, District Industry Centre, Bijnore. The application of the revisionist - company was rejected by an order dated October 31, 2000 by the Divisional Level Committee on three grounds, namely : (a) A joint application for multiple units is not permissible under the Rules. (b) The application was time-barred. (c) The company was in arrears of tax for Rs. 1,742.25 lacs. The revisionist filed appeal against the above order before the Trade Tax Tribunal which was rejected by the Trade Tax Tribunal vide its order dated September 20, 2001. The Trade Tax Tribunal while rejecting the appeal held that every unit was a separate unit and a joint application of different factories was not permissible as per conditions mentioned in section 4A of the U.P. Trade Tax Act, 1948 read with Rules framed thereunder. On filing revision the same was allowed by the High Court on May 24, 2002 and directions were issued to the concerned authorities to issue an eligibility certificate under section 4A for the benefit of trade tax rebate on all goods manufactured as well as on the waste products under notification dated December 21, 1997. Being aggrieved by the decision of the honourable High Court the Revenue went in appeal before the honourable Supreme Court and filed the Civil Appeal No. 6635 of 2003 ([2005] 139 STC 269). The honourable Supreme Court while deciding the appeal aforementioned framed the following questions for its consideration : (a) Whether one application can be filed or each unit of industrial undertaking needs to file separate application ? (b) Whether the application filed on May 17, 2000 can be said to be time-barred ? and (c) Whether the company was in arrears of tax for Rs. 1,742.25 lacs or any other amount ? The honourable Supreme Court vide its judgment and order dated December 9, 2004 ([2005] 139 STC 269) set aside the order passed by this honourable court, which directed for the issuance of eligibility certificate and remitted the matter back to the Divisional Level Committee to decide the application on merits within a period of six months. The honourable Supreme Court vide its judgment and order dated December 9, 2004 ([2005] 139 STC 269) set aside the order passed by this honourable court, which directed for the issuance of eligibility certificate and remitted the matter back to the Divisional Level Committee to decide the application on merits within a period of six months. While deciding the matter the honourable Supreme Court has held and decided that M/s. Dhampur Sugar Mills Ltd., the company is an industrial undertaking and is manufacturer of the goods for all its factories within State of Uttar Pradesh and it is a "dealer" in terms of section 8A of the U.P. Trade Tax Act, 1948 read with rule 6A of the U.P. Trade Tax Rules, 1948 and Central Sales Tax Act, 1956 with the Sales Tax Department with its principal place of business at Dhampur for all its factories. The honourable Supreme Court further held in its judgment and order dated December 9, 2004 ([2005] 139 STC 269) that it is the company which is paying the tax and therefore it is the company which would be getting the exemption from tax. Further the honourable Supreme Court in its order dated December 9, 2004 passed in Civil Appeal No. 6635 of 2003 ([2005] 139 STC 269) had come to the conclusion that the rejection of application on the ground that a joint application cannot be submitted is wrong and a joint application is permissible. On the issue of arrear of tax, the honourable Supreme Court had directed the committee that during the period of stay order the company cannot be said to be in arrears of tax. It further held that the application submitted cannot be treated as time-barred as per section 4A. The honourable Supreme Court further clarified and directed the Divisional Level Committee to determine whether factually there has been any expansion, modernization or diversification and also to determine to what extent the expansion, modernization, modernization after December 1, 1994 and before March 31, 2000 had taken place. Further the General Manager, District Industry Centre, Bijnore, was directed to consider whether clause 3(b) of the notification is applicable and whether the expansion, modernization and diversification now claimed is not in respect of any exemption already claimed on expansion, modernization and diversification which was granted to the company or any of its units earlier in notification of 1991. Further the General Manager, District Industry Centre, Bijnore, was directed to consider whether clause 3(b) of the notification is applicable and whether the expansion, modernization and diversification now claimed is not in respect of any exemption already claimed on expansion, modernization and diversification which was granted to the company or any of its units earlier in notification of 1991. Further the General Manager, District Industry Centre, Bijnore and Divisional Level Committee was directed to decide the application of the revisionist on the principle of law laid down by the honourable Supreme Court in its order dated December 9, 2004 ([2005] 139 STC 269) on merit. It had also directed that any information in case needed for allowing the benefit available to the revisionist under notification dated February 21, 1997 may be sought from other district as also from the company. Pursuant to the aforesaid judgment and order of the honourable Supreme Court dated December 9, 2004 ([2005] 139 STC 269), the General Manager, District Industry Centre, Bijnore and Divisional Level Committee had sought the information from the revisionist and also requested for the single application for all its units with a copy of each unit, separately on form XLVI. The revisionist submitted the desired information, the General Manger, District Industry Centre, Bijnore and Trade Tax Department physically visited the factories of the revisionist. According to their report submitted to the Divisional Level Committee it was found that actually expansion, diversification had taken place during the period December 1, 1994 to March 31, 2000. However, the joint report was not provided to the revisionist and the Divisional Level Committee took a decision on the application of the revisionist vide order dated May 24, 2005 and once again the Divisional Level Committee held that : (a) The company is defaulter. (b) The investment ascertained by the Divisional Level Committee is less than Rs. 50 crore. (c) The company has not achieved the base production based on 80 per cent installed capacity. Being aggrieved by the decision of the Divisional Level Committee the revisionist preferred an appeal against this order dated May 24, 2005 before the Trade Tax Tribunal, Lucknow, i.e., Appeal No. 59/2005 under section 4A of the Act. 50 crore. (c) The company has not achieved the base production based on 80 per cent installed capacity. Being aggrieved by the decision of the Divisional Level Committee the revisionist preferred an appeal against this order dated May 24, 2005 before the Trade Tax Tribunal, Lucknow, i.e., Appeal No. 59/2005 under section 4A of the Act. The Trade Tax Tribunal by its order dated September 22, 2005 set aside the decision of the Divisional Level Committee as it found that the Divisional Level Committee had not analyzed the facts correctly and therefore, it directed the Divisional Level Committee to issue a show-cause notice on all the points and after affording opportunity of hearing to the revisionist pass a reasoned and speaking order on all the points mentioned in show-cause notice. The Divisional Level Committee in compliance with the direction of the Trade Tax Tribunal issued a show-cause notice to the revisionist vide its letter dated December 7, 2005. Pursuant thereto the revisionist submitted its detailed reply to all the points raised in the show-cause notice. The Divisional Level Committee, thereafter, constituted the sub-committee of the Officer of Industries Department as also the Trade Tax Department to submit their "joint inspection report" after verifying and checking the datas submitted by the revisionist for the purposes of benefit claimed by them under notification dated February 21, 1997. The "joint inspection report" was drawn after visiting the factories and was submitted by the District Industry Centre as well as the Trade Tax Department to the Divisional Level Committee. The Divisional Level Committee accepted the "joint inspection report" and passed an order dated March 27, 2006 for issuance of eligibility certificate under section 4A in terms of notification dated February 21, 1997, making this joint inspection report as a part of its order dated March 27, 2006. The Joint Director of Industries communicated the said order in the shape of eligibility certificate vide its order Nos. 189-94 dated April 22, 2006. The revisionist being partly aggrieved by the aforesaid order filed appeal No. 27 of 2006 before the Trade Tax Tribunal, Lucknow. The Trade Tax Tribunal, Lucknow vide its order dated March 26, 2006 passed by the Divisional Level Committee. 189-94 dated April 22, 2006. The revisionist being partly aggrieved by the aforesaid order filed appeal No. 27 of 2006 before the Trade Tax Tribunal, Lucknow. The Trade Tax Tribunal, Lucknow vide its order dated March 26, 2006 passed by the Divisional Level Committee. Miss Pushpila Bisht, learned counsel for the revisionist has assailed the order on the following grounds : In the present case the Divisional Level Committee while passing the order on allowing the benefit under notification dated February 21, 1997 had come to the conclusion that (i) the revisionist is not defaulter, (ii) that their application is within time, (iii) that certificate of chartered accountant which was specific condition laid down under the notification for allowing the benefit as mentioned in its earlier order dated May 24, 2005 had been submitted by the revisionist, (iv) that the expansion in Asmoli Sugar Mill, Rauzagaon Sugar Mill, Dhampur Sugar Mills had taken place during the period mentioned in notification. Further the "joint inspection report" submitted to the Divisional Level Committee reported that the expansion in acetic acid, acetaldehyde, acetic anhydride and alcohols had taken place in the chemical division of the Dhampur Sugar Mill Ltd. These products were manufactured before December 1, 1994. The diversification of ethyl acetate, oxalic acid and carbon dioxide was undertaken after December 1, 1994 and the first date of production of ethyl acetate is April 1, 1996, oxalic acid is May 25, 1995 and carbon di-oxide is June 16, 1997. The Divisional Level Committee taking note of the joint inspection report had not allowed the benefit of expansion on all types of alcohols, waste products and power. The Divisional Level Committee had also not allowed the benefit to Asmoli as a new unit being established in 1995, although the revisionist's claim was there for it as new unit in 1995, as investment of more than Rs. 50 crores was claimed in the application filed under notification dated February 21, 1997 and was also shown separately. The Divisional Level Committee had considered the investment up to December 22, 1999 in Rauzagaon factory; up to December 8, 1999 in Asmoli factory; up to 1998 in chemical division and up to March 2000 in sugar mill at Dhampur. The deduction which has been made by the Divisional Level Committee in the investment is against the benefit allowed under notification dated February 21, 1997. The deduction which has been made by the Divisional Level Committee in the investment is against the benefit allowed under notification dated February 21, 1997. The notification allowed the total investment made from December 1, 1994 to March 31, 2000. The Divisional Level Committee has wrongly calculated the period of benefit for ethyl acetate and oxalic acid. It should have been for 15 years from the date of production of each diversified goods and not from the first date of production of one of the diversified goods. It should have been for ethyl acetate from April 1, 1996 to March 30, 2011, oxalic acid from May 25, 1995 to May 24, 2010, and carbon di-oxide from June 16, 1997 to June 15, 2012 according to section 4A(2) and condition laid down in notification for diversified goods. Further the Divisional Level Committee had wrongly not allowed the benefit to the company as a whole but had allowed amount of benefit to each factory separately and also the amount of benefit of exemption was ascertained on commodity basis. The Divisional Level Committee has also wrongly not granted the benefit of Mansurpur Sugar Mill being registered as the branch of the company situated at Mansurpur District Muzaffarnagar, U.P. The Trade Tax Tribunal while disallowing the benefit of Asmoli as a new unit had given the reasoning that the claim of new unit of Asmoli was not before the Divisional Level Committee in the application submitted by the revisionist, whereas this contention is absolutely incorrect as the benefit of Asmoli as a new unit being established in 1995, was claimed by the revisionist for its investment as new unit in 1995, as investment of more than Rs. 50 crores was claimed in the application filed under notification dated February 21, 1997 and was also shown separately. 50 crores was claimed in the application filed under notification dated February 21, 1997 and was also shown separately. Further the Trade Tax Tribunal had disallowed the benefit of Mansurpur Sugar Mill on the reasoning that it is an independent unit and it has further held that the Divisional Level Committee had allowed the amount of investment to each factory as per the areas of each factory correctly and the Divisional Level Committee had given the reasoning that whatsoever investment under section 4A is allowable is allowed by the Divisional Level Committee and whatsoever deduction is being done is in terms of decision of the honourable Supreme Court order in the matter of Kajaria Ceramics ([2005] 141 STC 406). The learned counsel for the revisionist has drawn attention of the court to the following details : Chemical Division The matter in respect of the same is contained in page 21 of the joint inspection report wherein the base production of chemical division is mentioned. It is mentioned therein that the chemical division first of all had shown the expansion of existing products being manufactured by them. Acetic acid, acetaldehyde, acetic anhydride and alcohols were manufactured earlier and the expansion of these products had undertaken after December 1, 1994. That the expansion on these products as per this report had started with effect from December 1, 1994 and the production of each commodity of the earlier five years was mentioned as under in the Joint report on page 21 : ------------------------------------------------------------------------------ 1990-91 1991-92 1992-93 1993-94 ------------------------------------------------------------------------------ Chemicals (in qtls.) acetaldehyde 100 22706 54371 56726 ------------------------------------------------------------------------------ Acetic acid 0 10517 23963 21805 ------------------------------------------------------------------------------ Acetic anhydride 0 0 0 431 ------------------------------------------------------------------------------ Rectified spirit ... ... 295580 1452280 ------------------------------------------------------------------------------ Special denatured spirit ... ... 192545 181744 ------------------------------------------------------------------------------ Thus the impugned order of not allowing the benefit on all types of alcohol about the base production is against the reported facts in joint report which is part of the Divisional Level Committee decision, as the Divisional Level Committee has admitted in its joint inspection report the expansion of alcohol had been undertaken by the revisionist, thus the revisionist is entitled for the benefit of alcohol of all types. As per sub-section (2) of section 4A is it lawful on the part of State Government to allow the benefit on all the goods manufactured by the unit as also in terms of clause (c) of sub-section (2) of section 4A to allow the benefit in respect of those goods only which are manufactured which had undertaken expansion, diversification or modernization on or after April 1, 1990. The notification dated February 21, 1997 in clause (1)(b) also allows the benefit in respect of goods manufactured in a unit which had undertaken expansion, modernization or diversification on or after December 1, 1994 but not later than March 31, 2000 in the areas mentioned in column 2 of annexure to the notification. The chemical division situated in Dhampur District Bijnor is mentioned in the area in column 2 of the annexure to the notification dated February 21, 1997. There is no bar in not allowing the benefit on expansion of alcohol in notification dated February 21, 1997 or in section 4A. Clause (1)(b)(i) read with clause (4A)(2)(c), the additional production in the case of expansion or modernization as a result of such expansion or modernization in excess of base production is eligible for relief of the amount of tax under notification 1997 to the extent investment is made or 15 years whichever is earlier. The relief for the amount of tax is admissible to the company on diversified goods from the date of production. In the revisionist case, the benefit of 15 years under notification dated February 21, 1997 on oxalic acid available from May 25, 1995 to May 24, 2000, on ethyl acetate from April 1, 1996 to March 31, 2011 and carbon di-oxide from June 16, 1997 to June 15, 2012. The Divisional Level Committee had allowed the exemption for 15 years on oxalic acid from May 15, 2000 to May 24, 2010 whereas on ethyl acetate and carbon di-oxide had restricted the period to May 24, 2000 which is against condition laid down in the notification dated February 21, 1997 read with section 4A. The learned counsel for the revisionist had read various paras and observations recorded by the honourable Supreme Court of India in its judgment and order dated December 9, 2004 ([2005] 139 STC 269). The learned counsel for the revisionist had read various paras and observations recorded by the honourable Supreme Court of India in its judgment and order dated December 9, 2004 ([2005] 139 STC 269). Directions and guidelines have been issued by the honourable Supreme Court as to how the decision is to be taken by the Divisional Level Committee and the tax authorities. She has read the judgment rendered by the Tribunal and various observations made by the Divisional Level Committee to submit that the Tribunal has not conceded the matter in the light of directions given by the honourable apex court. Unnecessary facts, i.e., restriction on expansion, etc., were imported in the order. In the present case expansion was not taken by the company during the period from December 1, 1994 to March 31, 2000. Detailed and sufficient material were placed before the Divisional Level Committee and the Tribunal to assist it in taking a just and proper decision. The benefit granted to each factory and commodity wise was also against the spirit and object of the notification dated February 21, 1997. The chartered accountant certificate was not dealt with, it was excluded from consideration. This court was taken to the chartered accountant's certificate, details of investment in plant and machinery and other additional expenses incurred by the company. Certainly the production was increased. The company had invested in diversified goods during the relevant period. The chartered accountant certificate ought not to have been ignored. Adequate investment was made to procure an additional turbine and captive power plant. The learned counsel for the revisionist has submitted that Commissioner of Trade Tax v. Kajaria Ceramics Ltd. [2005] 141 STC 406 (SC) is not relevant in the set of circumstances. The honourable Supreme Court in its abovementioned judgment has dealt with the issues and made observations and recorded findings in the judgment which are binding on the respondents. The facts in the revisionist case are entirely different and even the notifications in both the cases are different. The benefit of investment made in Mansurpur Sugar factory was also to be provided to the company. The revisionist has already suffered. It has been litigating for several years seeking its due from the respondents. The facts in the revisionist case are entirely different and even the notifications in both the cases are different. The benefit of investment made in Mansurpur Sugar factory was also to be provided to the company. The revisionist has already suffered. It has been litigating for several years seeking its due from the respondents. The company had established a case and as a matter of fact one case see on the site of the mills that the production, milling capacity has been increased during the relevant years, huge additional investment was made by no stretch of imagination. It can be said that the company has not multiplied its operations and increase the production capacity. It is evident from the excise tax returns, details of annual sugar production and other statutory documents and registers. Hypertechnical view has been taken in denying benefits of the revisionist. The learned standing counsel appearing for the State of U.P. has opposed the submissions of the learned counsel for the revisionist. He has drawn attention of the court to the findings and observations made by the Trade Tax Tribunal. As per learned standing counsel the Trade Tax Tribunal has dealt with all the issues properly, considered the report of the Divisional Level Committee, the observations made by the honourable apex court have been taken into consideration, detailed reasoned and speaking order has been passed by the Tribunal. The learned standing counsel has lead the court to various paras of the counter-affidavit/objections. The revisionist - company was not entitled for the benefits of exemptions arising out of notification dated February 21, 1997. He has read section 4A of the U.P. Trade Tax Act, 1948 and the relevant paras of the notification dated February 21, 1997. According to him for the purpose of exemption each unit is considered to be a separate entity to avail of the benefits of notification and investment of Rs. 50 crores or more must be in respect of one unit only. According to him the present company making a capital investment of Rs. 50 crore or more in its various units cannot be clubbing the units to claim an exemption under the said notification. The application itself was made belatedly. The company was in arrears of taxes and, therefore, was not entitled to the benefits of notification. According to him the present company making a capital investment of Rs. 50 crore or more in its various units cannot be clubbing the units to claim an exemption under the said notification. The application itself was made belatedly. The company was in arrears of taxes and, therefore, was not entitled to the benefits of notification. As per learned standing counsel the term "unit" refers not to an industrial undertaking as a whole but to a unit of the company. "The first date of production of goods" consequent upon the expansion, modernization or diversification of the undertaking in question should be a date falling at any time after March 31, 1980. This cannot refer the multiple manufacturing concern of the dealer taken collectively. The small units application seeking benefits was not placed before the Divisional Level Committee. The company had not installed a new power plant, they were using an old turbine. The joint inspection report does not support the case of the revisionist. The recommendation of the Divisional Level Committee and the decision taken by the Tribunal is just and proper and the same is unassailable. The learned counsel for the revisionist responded to the submissions put forth by the learned standing counsel and has led the court to the observations made by the honourable Supreme Court. According to her all these points have already been dealt with and taken note of by the honourable apex court. The same issue cannot be raised. These issues have already been settled. I have heard learned counsel for the parties and perused the record and the judgments rendered by the honourable apex court on December 9, 2004 ([2005] 139 STC 269), report of the Divisional Level Committee and the judgment rendered by the Tribunal, impugned in this revision. There appears to be substance in the submissions of learned counsel for the revisionist. In the present case the respondents had admitted that the period of establishing a new unit or undertaking expansion, modernization and diversification for grant of exemption under the terms of notification dated February 21, 1997 was December 1, 1994 to March 31, 2000, both the dates being inclusive. The restrictions imposed in the joint inspection report, which is now a part of the Divisional Level Committee's report and is also a part of Trade Tax Tribunal's order is not proper. The restrictions imposed in the joint inspection report, which is now a part of the Divisional Level Committee's report and is also a part of Trade Tax Tribunal's order is not proper. It has erroneously restricted the expansion up to 1999 in sugar mill Asmoli, Moradabad, Rauzagaon, Barabanki and in case of chemical division of the company up to 1998. This restriction of expansion is not provided in the notification. In my opinion this order has been passed in a manner as if the Tribunal is sitting in appeal over the decision of the honourable Supreme Court dated December 9, 2004 ([2005] 139 STC 269) passed in Civil Appeal No. 6635 of 2003. The relevant portion of the honourable Supreme Court's order is quoted below : "The Committee will also have to determine to what extent there has been expansion, modernization and/or diversification after December 1, 1994 and before March 31, 2000." The above directions have not been implemented in its true spirit. Any expansion undertaken by the revisionist during the period December 1, 1994 to March 31, 2000 is to be considered for allowing the benefit. A perusal of the certificate issued by the Divisional Level Committee for chemical shows that it had considered the period of expansion up to March 31, 2000 and granted the benefit from May 15, 2000 to March 31, 2012 for acetic acid, acetaldehyde, acetic anhydride and alcohol. Therefore, the observations in the joint inspection report to this extent that the period of expansion is to be taken up to 1998 has not been accepted by the Divisional Level Committee while issuing eligibility certificate. The Divisional Level Committee taking the contrary view for the purpose of considering the additional fixed capital investment up to 1998 in chemical plant instead of considering the investment made up to March 31, 2000 the relevant period. Clear specific directions of the Supreme Court of India in its judgment have been excluded from consideration. It is noteworthy that the benefits granted to each factory and commodity wise is against the spirit of notification dated February 21, 1997 as also against the spirit of section 4A and this is clear from the decision rendered by the honourable Supreme Court on December 9, 2004 ([2005] 139 STC 269) in the case filed by the Revenue against the revisionist. In the said judgment the honourable Supreme Court while considering clause (c) of section 4A(6)(5) has decided that it is not necessary for the authorities to decide whether the production capacity had increased by twenty-five per cent in the undertaking or a unit is to be considered. Even if production capacity of only the unit/units, in which expansion, modernization or diversification has taken place, is to be taken into account then also it would not show that the entire investment is to be only in one unit. The very fact that this clause is dealing with all the aspects, i.e., expansion, modernization and diversification shows that in most cases they would be in separate units. Further the honourable Supreme Court has decided that undoubtedly the industrial undertaking may diversify in any of the units but it does not mean that it is the unit and not the industrial undertaking which is diversifying. In the company, production has certainly increased by enhancing the crushing capacity. It is the result of modernization, diversification, development and substantial investment. The honourable Supreme Court while considering sub-clause (d) of section 4A(6)(5) expressed its view that clause (d) makes it clear that it is the industrial undertaking and not a unit which is making the additional fixed capital investment. Thus it is the company who has to arrange for the additional fixed capital and deduction of depreciation is not necessary. It is the company which has made the investment and it is the company which is paying tax and would be getting the benefits of exemption. The honourable Supreme Court while considering sub-clause (e) of section 4A(6)(5) has decided the location of units at different places of industrial undertaking is in the contest of expansion, diversification and modernization refers the term "unit" it refers to industrial undertaking. Thus an expansion of one unit at the same location or a modernization of any unit or a diversification in an existing unit would suffice. A new unit may not be at a different place but an expansion, modernization must be at the place/places where the existing units of the industrial undertaking are situated and operative. Thus an expansion of one unit at the same location or a modernization of any unit or a diversification in an existing unit would suffice. A new unit may not be at a different place but an expansion, modernization must be at the place/places where the existing units of the industrial undertaking are situated and operative. In the present case the honourable Supreme Court after considering the arguments advanced by the Revenue on the basis of production as per Explanation 6 of first provision that the base production is to be determined not merely unitwise but even goodswise, because one unit is manufacturing more than one goods but not undertaking expansion, etc., in respect of all such goods. The observations made by the apex court have been ignored. Further the honourable apex court has also provided that even if the figures are to be in respect of only one unit it should mean that the entire investment of Rs. 50 crores or more must be in one unit only. Separate figures of each unit in which expansion, modernization or diversification has taken places may be worked out. The preamble and the plain reading of the relevant notification shows that for expansion, modernization and diversification need not be in one unit. It is the undertaking which is considered to be the "unit". As per the honourable Supreme Court judgment dated December 9, 2004 ([2005] 139 STC 269) which is quoted below : "... A plain reading of the notification shows that for 'expansion, modernization and diversification' it is the industrial undertaking which is considered to be the 'unit'. This is also clear from fact that in the notification wherever the words 'expansion, modernization or diversification' are used, there is no qualifying words to the effect 'in any one unit'. In none of the clauses is there any requirement of the investment being in one unit of the industrial undertaking. Words to the effect 'in a particular unit' or 'in one unit' are missing. To accept Mr. Sunil Gupta's submission would require adding words to a notification which the Government purposely omitted to add. Even otherwise, the purpose of notification being to encourage increased production and to give benefit to industries which have invested rupees fifty crore or more in the State and whose production has thus increased, an interpretation must be given which would extend benefit to such industries. Even otherwise, the purpose of notification being to encourage increased production and to give benefit to industries which have invested rupees fifty crore or more in the State and whose production has thus increased, an interpretation must be given which would extend benefit to such industries. There would be no purpose in denying, an industry which has invested rupees fifty crore or more and whose production in the State has as a result increased, the benefit of the exemption granted by this notification merely because the whole of the investment is not in any particular unit. Thus even where the investment is made by the company in more than one units, so long as the total investment is rupees fifty crore or more, the benefit of the notification would be available. Such benefit would then be distributed in the manner set out in the Schedule depending on where a unit in which expansion, diversification or modernization has taken place, is situated. ..." The judgment and order dated December 9, 2004 ([2005] 139 STC 269) further provides that the apex court has also clarified that clause (b) of preamble of notification that it is in respect in a unit which has undertaken expansion, modernization or diversification between December 1, 1994 to March 31, 2000. Admittedly the revisionist - company has carried out expansion, diversification during this period. It has been further clarified by the apex court that in none of the clause there is any requirement of the investment being made in one unit of the industrial undertaking; words to the effect in a "particular unit" or "in one unit" are missing. In the present case the chartered accountant's certificate has not given due consideration. The curtailment of investment made during the period December 1, 1994 to March 31, 2000 duly certified by chartered accountant is erroneously done in the joint inspection report. The Divisional Level Committee in its earlier order of 2005 had categorically denied the exemption on the specific condition of not submitting the certificate of chartered accountant for the additional fixed capital investment made in plant and machinery. In the joint inspection report it is reported to the Divisional Level Committee that certificate from chartered accountant certifying the investment in plant and machinery had been submitted for the period December 1, 1994 to March 31, 2000. In the joint inspection report it is reported to the Divisional Level Committee that certificate from chartered accountant certifying the investment in plant and machinery had been submitted for the period December 1, 1994 to March 31, 2000. The relevant provisions contained in clause 3(i) of the notification which is reproduced as under : "3(i) that the unit shall after close of every assessment year during which exemption from, or reduction in the rate of tax is admissible but not later than thirty days of the approval of its balance sheet by concerned authority of the unit submit to the assessing authority a certificate from a chartered accountant in respect of each assessment year. Such certificate shall contain the following details, - (a) additional fixed capital investment made during the assessment year; (b) cumulative additional fixed capital investment made from or after December, 1, 1994 up to the close of such assessment year; and (c) amount of tax exemption from, or reduction in the rate of tax availed of by the unit during the assessment year and from or after December 1, 1994 up to the close of the such assessment year; (d) the facility of exemption from, or reduction in the rate of tax under this notification shall not be available to such industrial units as are notified by the State Government." The revisionist has submitted that the investment made even for the first year is less than 50 crores and there is excess production even in first year, the relief of tax is to be granted under notification dated February 21, 1997 as certified by chartered accountant. Similarly this additional fixed capital investment is to be cumulated year-wise from December 1, 1994 to March 31, 2000. In case additional fixed capital investment is less than Rs. 50 crores, the relief of exemption shall not be available to such unit where additional fixed capital investment is less than Rs. 50 crores during the period December 1, 1994 to March 31, 2000. The counsel for the petitioner is right in saying that in view of this specific condition, the investment on plant and machinery certified by chartered accountant cannot be disturbed by any other authority, i.e., the statutory authority, for purposes of investment is chartered accountant under section 4A read with notification dated February 21, 1997. The counsel for the petitioner is right in saying that in view of this specific condition, the investment on plant and machinery certified by chartered accountant cannot be disturbed by any other authority, i.e., the statutory authority, for purposes of investment is chartered accountant under section 4A read with notification dated February 21, 1997. In view of this the revisionist is entitled for the benefit on the additional fixed capital investment as mentioned above by calculating the amount to the extent of 150 per cent on fixed capital invested in District Bijnore, 200 per cent additional fixed capital investment in area Moradabad and Barabanki. This is certified by the chartered accountant. In this case the revisionist has invested in diversified goods (ethyl acetate, carbon di-oxide, oxalic acid) during the period December 1, 1994 to March 31, 2000 which was Rs. 18,95,66,897 as per chartered accountant's certificate and balance investment is towards expansion being undertaken by the dealer, Dhampur Sugar Mills Ltd., in different factories situated in different areas of the State and, therefore, the revisionist is entitled for the benefits. The eligible amount of investment available to the company cannot be apportioned factory-wise or commodity-wise as already indicated in the foregoing paras. The revisionist is not claiming any additional fixed capital investment made on land and building during the period December 1, 1994 to March 31, 2000. The deduction made on account of effluent treatment plant and electric motor, transformers, fire fighting equipment is against the Explanation of clause (4)(b)(ii) or Explanation to section 4A(6). The clause (ii) reads "investment as is necessary under some statutory obligation" is to be allowed. Therefore, in view of the aforesaid, the effluent treatment plant is now a statutory requirement under (environmental laws), U.P. Pollution Control Board; electric motor and transformers and electrical panel are statutory requirement under the Electricity Act and fire-fighting equipment are statutory requirement under the Prevention and Safety Act. Therefore, the deduction made from the investment in this regard has been erroneously done and is against the provision of section 4A of the U.P. Trade Tax Act, 1948. Therefore, the deduction made from the investment in this regard has been erroneously done and is against the provision of section 4A of the U.P. Trade Tax Act, 1948. In order to allow the benefit on equipment given on lease, the revisionist has replying on the provision sub-clause (4)(b)(i) of Explanation (6) of section 4A which is reproduced below : "investment, whether by means of purchase, hire or lease in such plant, equipment, apparatus, components and machinery as is necessary for the establishment or running of the factory or workshop." The deduction made in power plant has been erroneously done and in this regard the revisionist has drawn attention of the court on clause 4(e) of Explanation 6 of section 4A which reads as under : "The facility of exemption from or reduction in the rate of tax on the basis of fixed capital investment in a captive power plant will be available when the unit does not sell the power which is in excess of its consumption to any person other than the Uttar Pradesh State Electricity Board and in case the unit sells such excess power to person other than the said board, the unit will be liable to pay the tax on the sale of its manufactured goods on pro rata basis along with the interest in accordance with the provisions of sub-section (1) of section 8." The denial of investment made in power plant on the reasoning that it is an old plant is against the provision mentioned in clause (4)(c) because there is no word that old or new captive power plant is to be established. Naturally without addition of power generating capacity the crushing capacity of sugarcane in the mills cannot be increased. More power is to be generated and needed due to the increased crushing in the mills. The State Government has avoided the word "old" or "new" in this clause and it is only the investment made in power plant during the period December 1, 1994 to March 31, 2000 is to be considered. Since the production and crushing capacity had admittedly increased the benefits must be accorded to the revisionist - company. The revisionist has indicated that the joint inspection report states that the survey was conducted in 1997 and this "power plant" at the relevant time was established. Since the production and crushing capacity had admittedly increased the benefits must be accorded to the revisionist - company. The revisionist has indicated that the joint inspection report states that the survey was conducted in 1997 and this "power plant" at the relevant time was established. The period of 1997 comes within the period December 1, 1994 to March 31, 2000. The survey report as mentioned in the joint inspection report nowhere says that captive plant was established before December 1, 1994. The other reasoning for disallowing the investment in captive power plant of Rauzagaon factory that as per joint inspection report it is reported that the surplus power generated by Rauzagaon factory is supplied to UPSEB. In this regard it was explained by the counsel that surplus supply of power to UPSEB is not a disqualification for reducing the fixed capital investment. In support of this contention the revisionist has drawn attention of the court upon clause (4)(e) of Explanation 6 to section 4A which is reproduced above. The deduction made in additional fixed capital investment is not admissible under section 4A read with notification dated February 21, 1997. In the opinion of this court the Kajaria Ceramics case is based on different set of circumstances. The expenses disallowed in Kajaria Ceramics case are on four items of expenditure which are not the part of additional fixed capital investment claimed by the revisionist as per notification of 1997. The relevant para in Kajaria Ceramics Ltd. [2005] 141 STC 406 (SC) is as under : "The four items of expenditure which the High Court accepted, viz., interest paid on loans by financial institutions, expenses in connection with a right issue of shares, expenses on foreign technicians or foreign travel do not reflect the value of the items forming part of the fixed capital investment for the purposes of this Act. ..." It is noted that the observations made in the decision of the honourable Supreme Court dated December 9, 2004 ([2005] 139 STC 269) while adjudicating the dispute between the present parties shall prevail over on any other observations of the honourable Supreme Court in a different matter. The said judgment is binding on the parties. The facts in revisionist's case are entirely different from that of Kajaria Ceramics case and even the notifications in both the cases are different. The said judgment is binding on the parties. The facts in revisionist's case are entirely different from that of Kajaria Ceramics case and even the notifications in both the cases are different. The said case may not come to the rescue of the respondents. The observations and directions contained in the above judgment have to be complied with by the respondents. It was also submitted that the benefit on investment made in Mansurpur Sugar Factory is admissible to the revisionist - company since it is a branch of Dhampur Sugar Mills Ltd., as decided by the Trade Tax Tribunal and the investment made in Mansurpur may be allowed as Dhampur Sugar Mills Ltd., Mansurpur had applied separately before the General Manager, District Industry Centre, Muzaffarnagar and their application was rejected by Divisional Level Committee, Muzaffarnagar against which they had filed an appeal before the Trade Tax Tribunal, Lucknow. The Trade Tax Tribunal, Lucknow, had decided the appeal as they had also filed revision against this order before this honourable High Court. The revisionist has submitted that instead of granting the exemption separately to Mansurpur Sugar Mills it may be granted in this very revision to the Dhampur Sugar Mills who is the "dealer" for the sales effected at Mansurpur. The revisionist - company is entitled for this benefit. The revisionist has drawn attention of the court that already 10 years from the date of notification had expired and three different rounds of litigation have taken place in this matter. The period of relief is already over on May 24, 2000 and it is also submitted that during the period the eligibility certificate was not granted to the revisionist, erroneous assessments were made and huge demands were created and the said demanded amounts have also been realized from the revisionist by adopting the coercive measure. In view of the above discussion, this court is of the opinion that the order dated March 26, 2008 deserves to be set aside and the revision deserves to be allowed. Accordingly, the revision is allowed, the questions have been answered accordingly. In view of the above discussion, this court is of the opinion that the order dated March 26, 2008 deserves to be set aside and the revision deserves to be allowed. Accordingly, the revision is allowed, the questions have been answered accordingly. The orders dated March 26, 2008 passed by the Trade Tax Tribunal, Lucknow, U.P. in Appeal No. 27 of 2006 (Dhampur Sugar Mills Ltd. v. Divisional Level Committee) and the decision of the Divisional Level Committee, Moradabad dated March 27, 2006, only to the extent which disallows the benefits as claimed by the revisionist are set aside. The Additional Director, Industries, Moradabad is directed to issue the eligibility certificate under section 4A of the Act to the revisionist - company, preferably within a month from the date of presentation of a certified copy of this judgment and order, entitling it to the benefit of tax rebate on all the goods manufactured, waste products, bye-products, etc., to the revisionist, M/s. Dhampur Sugar Mills Ltd. (including its branches). The revisionist shall be entitled to all the benefits admissible to it as per abovementioned notification dated February 21, 1997. The revisionist shall be entitled to the reliefs claimed in the revision. All the necessary consequences shall follow.