JANTA MACHINE TOOLS versus STATE OF U.P. & ORS.

JANTA MACHINE TOOLS versus STATE OF U.P. & ORS.

Trial production does not constitute commencement of commercial production for the purposes of sales tax exemption under Section 4A and the relevant notification. The date of purchase of raw material or installation of electricity is determinative. The appellant commenced production on 4.12.1982, after obtaining electricity connection, thus is entitled to exemption.

Parties
Appellant: Janta Machine Tools; Respondents: State of U.P. & Ors.
Jurisdiction
India
Judgment Date
19 January 1989
Procedural Posture
Civil Appeal / Appeal by Special Leave From Judgment and Order Dated 7.12.1987 of the Allahabad High Court in Civil Misc. No. Nil 1987
Outcome
Appeal allowed
Legal Topics
Sales Tax Exemption, Commencement of Production Under Section 4 a
Tax Law Sales Tax Exemption Commencement of Production Under Section 4 a

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Parties

Janta Machine Tools

Appellant

State of U.P. & Ors.

Respondents

Procedural Posture

Civil Appeal / Appeal by Special Leave From Judgment and Order Dated 7.12.1987 of the Allahabad High Court in Civil Misc. No. Nil 1987

Legal Issues

  1. 1 Whether trial production can be treated as commencement of production for purposes of sales tax exemption under Section 4A
  2. 2 What is the relevant date for commencement of production under Section 4A and notification

Ratio Decidendi

Trial production does not constitute commencement of commercial production for the purposes of sales tax exemption under Section 4A and the relevant notification. The date of purchase of raw material or installation of electricity is determinative. The appellant commenced production on 4.12.1982, after obtaining electricity connection, thus is entitled to exemption.

Court Disposition

Appeal allowed

Orders

  • The rejection of appellant's application for exemption is quashed.
  • The appellant is entitled to exemption in terms of the notification dated 30.9.1982.