JUDGMENT Prakash Krishna, J.
1. The petitioner has challenged the orders dated March 31, 1988 and June 2, 1988 rejecting the petitioner's application for grant of eligibility certificate under Section 4-A of the U.P. Sales Tax (now "Trade Tax") Act, 1948 by the Divisional Level Committee.
2. The petitioner is a partnership firm registered under the Partnership Act and it established a new industry to manufacture oil in the year 1983. The petitioner was also carrying on the business of oil-seeds (telhan). The petitioner's application for the grant of eligibility certificate was rejected solely on the ground that the unit besides production of oil is also doing trading business of telhan, vide. annexure 3 to the writ petition. The said order is dated March 16, 1988 communicated to the petitioner by moans of fetter dated March 31, 1988. Thereafter the petitioner filed review application and also placed reliance upon the circular of the Commissioner of Trade Tax, dated February 25, 1988 with respect to the new units established in between October 1, 1982 to March 31, 1990. However, the said review application was also dismissed. The certified copy of the order rejecting the review application was not annexed along with the writ petition. However, this Court on December 7, 1988 directed the Standing Counsel to file the copy of the order passed on the review application, by which the review application was rejected. The said order has been filed as annexure CA-1 to the counter-affidavit sworn by Sri Shyam Sundar Chaurasia filed on behalf of District Industries Centre. A perusal of the same shows that the review application was also rejected on the same ground. Aggrieved against the aforesaid two orders the present writ petition has been filed.
3. On behalf of the respondents two counter-affidavits on similar allegations have been filed. It has been stated that the date of commencement of production is March 31, 1983 and the application for the grant of eligibility certificate was rejected in view of the report given by the Deputy Commissioner (A), Sales Tax, Allahabad, by letter No. 1450 dated May 26, 1988. In the said report it was stated that "the unit apart from production and sale of oil and oil cake is also engaged in trade of oil seeds". Oil seeds is used for manufacture of oil and oil cake. As per CST registration certificate the unit is "authorised for trading of oil-seeds". An apprehension was expressed in the said letter that the petitioner can avail double benefit of exemption causing loss to the State exchequer and that the statement of the petitioner that they do not do trading of produced items an'd no tax evasion is involved is incorrect and baseless.
4. We have heard Sri Shashi Kant, counsel for the petitioner and Sri S.P. Kesarwani, Standing Counsel, for the respondents
5. From the undisputed facts it is clear that the petitioner has established a new unit of manufacturing oil. It is also not disputed that the petitioner is also carrying on the trading business of oil seeds. The Divisional Level Committee has rejected the application of the petitioner for grant of eligibility certificate only on the ground that the petitioner is also carrying on the trading business of oilseeds. In this connection the circular dated February 25, 1988 of the Commissioner is relevant. Paragraph 4 of the circular states :
"Shasan ko yeh bhi sandarkhit kiya tha ki agar nayee ikayee dwara kisi vastu ke kraya vikraya ka bhi vyopar kiya jata ha to asisi ikayee bhee choot kee patra hogi. Shasan ne yeh nirdesh diye hain ki aisi ikai ko swayam ke dwara nirmit mal ki vikri par choot diye jane men koyee aapatti nahin hai kintu yeh sunisb.il kar liya jay ki aisi vastu jinka kray vikray ka vaipar kiya ja raha hai, ikayee dwara utpadit vastuon se bhinn ho, taki karapvanchan kee koyee gunjaysh na rahe."
6. Counsel for the petitioner has submitted that in view of the said circular the rejection of the application for grant of eligibility certificate by the Divisional Level Committee is totally illegal. In paragraph 9 of the writ petition the petitioner has placed reliance upon the said circular dated February 26, 1988 of Commissioner of Sales Tax. In reply the respondents in the counter-affidavit have not stated even a single word as to how the said circular is not applicable to the facts of the petitioner's case. Reply to paragraph 9 of the writ petition has been given in paragraph 3 of the affidavit of Sri S.B.P. Gupta, Sales Tax Officer, Grade II. In another counter-affidavit of Sri Shyam Sundar Chaurasia only an apprehension has been mentioned in paragraph 10 that the unit can evade tax by resale of unpaid oil-seed to such customer who can avail facilities under Section 4-A.
7. Having considered the respective submissions of the parties, we are of the opinion that the orders rejecting the application for grant of eligibility certificate are based on irrelevant considerations and the petitioner is entitled for exemption under Section 4-A even if it was trading in oil-seed. There is no such condition under Section 4-A that a person who is also doing trading business cannot carry on manufacturing unit of a different commodity. Even the circular issued by the Commissioner of Trade Tax does not impose any such condition. On the contrary it says that the bar has only been imposed for not trading in the product and not with the raw material. The oil-seed is not the product of the unit of the petitioner and it was also not the case of the respondents either before the Divisional Level Committee or before this Court that the petitioner is aJso carrying on the trading activities in oil or oil cake.
8. In view of the above the writ petition is allowed. The impugned orders dated March 16, 1988, communicated by the letter dated March 31, 1988 (annexure 3 to the writ petition) and the order dated June 2, 1988 filed as annexure CA-1 to the counter-affidavit rejecting the review application of the petitioner are quashed. Since no other ground was taken for refusing to grant eligibility certificate to the petitioner, we direct the respondents to issue the requisite eligibility certificate to the petitioner under Section 4-A of the U.P. Trade Tax Act forthwith.