JUDGMENT Rajes Kumar, J.
1. Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 19th February, 2004 relating to the assessment year, 2000-2001.
2. The dealer/Opposite party (hereinafter referred to as "dealer") has established a new unit for the manufacturing of cement. Under the U.P. Trade Tax Act, cements liable to tax at the rate of 12 percent under the Notification No. KA.N1-2-306/XI dated 29.01.2001 including surcharge. The dealer claimed exemption under Section 4-A of the Act being a new unit. The Divisional Level Committee issued eligibility certificate granting exemption w.e.f. 21.11.1998. As per the notification, the dealer was not liable to pay any tax for two years. Assessing authority has allowed full exemption upto 20.11.2000. There is no dispute in this regard. However, for the period from 21.11.2000 to 31st March, 2001, dealer was entitled for exemption to the extent of 75 percent of the tax which comes to 9 percent and liable to pay tax at the rate of 3 percent. There is no dispute in this regard also.
3. Apart from exemption claimed under Section 4-A of the Act, dealer also claimed exemption under Section 4-AA of the Act and Notification No. TT-2-779/X1-9 (226)/94- U.P. Act 15/48-Order-95 dated 31.03.1995 issued in exercise of power under Section 4-AA of the Act to the extent of 25 percent of the 12 percent rate of tax i.e. 3 percent over and above exemption available under Section 4-A of the Act. There is no dispute that the dealer fulfilled the requirements of the notification issued under Section 4-AA of the Act and entitled for exemption. In view of the above, dealer claimed exemption of 9 percent under Section 4-A of the Act and 3 percent exemption under Section 4-AA of the Act and in this way claimed full exemption from tax during the year under consideration. Assessing authority allowed 9 percent exemption under Section 4-A of the Act, but under Section 4-AA of the Act allowed the exemption only to the extent of 25 percent of the 3 percent, which was the balance tax payable after the exemption under Section 4-A of the Act. First appeal filed by the dealer was rejected. Dealer filed second appeal before the Tribunal, which has been allowed by the impugned order.
4. Tribunal allowed the exemption at the rate of 3 percent under Section 4-AA of the Act over and above 9 percent exemption under Section 4-A of the Act. Tribunal held that the assessing authority erred in allowing the exemption to the extent of 25 percent of the 3 percent under Section 4-AA of the Act. Being aggrieved by the order of the Tribunal, Revenue has filed the present revision.
5. Heard learned Counsel of the parties.
6. Learned Standing Counsel submitted that the Tribunal has erred in allowing 3 percent exemption under Section 4-AA of the Act, while exemption was permissible only to the extent of 25 percent of the 3 percent tax which was payable during the year under consideration after allowing 9 percent exemption under Section 4-A of the Act. Learned Counsel for the dealer relied upon the order of the Tribunal.
7. Having heard the learned Counsel for the parties, I have perused the order of the Tribunal and the authorities below.
8. Section 4-AA of the Act and Notification No. TT-2-779/XI-9 (226)/94-U.P . Act 15/48-Order-95 dated 31.03.1995 reads as under:
Section 4-AA. Concession in rate of tax to certain industrial units.
Notwithstanding anything contained in this Act, the State Government may, by notification, grant concession by such percentage in the rate of tax, not exceeding twenty five, on the sale of goods manufactured by such industrial unit which provides employment to the persons belonging to the Scheduled Castes, Scheduled Tribes, other backward classes of citizens and minorities in such proportion to the total employment being provided by such industrial units and subject to such conditions and restrictions, as may be specified therein.
Explanation:- For the purpose of this section the expression other backward classes of citizens shall have the meaning assigned to it in the Uttar Pradesh Public Services Reservation for Scheduled Castes, Scheduled Tribes and other Backward Classes, Act, 1994 and the expression "minorities" shall have the meaning assigned to it under Article 30 of the Constitution of India.
Notification No. TT-2-779/XI-9 (226)/94- U.P. Act 15/48-Order-95 dated 31.03.1995 In exercise of the powers under Section 4-AA of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act. No. XV of 1948), the Governor is pleased to grant, with effect from April, 1, 1995, a concession of twenty-five percent in the rate of tax to such industrial units in the private sector as are registered under the Factories Act, 1948 and provide employment to the persons belonging to Scheduled Castes and Scheduled Tribes, other Backward Classes of Citizens and Minorities at the rate respectively of not less than 23 percent., 27 percent and ten percent of the total employment being provided by such industrial unit subject to the following conditions and restrictions:
Conditions and restrictions:
(1) An industrial unit may be granted concession in the rate of tax only if it files before the concerned assessing authority upto 31st December of the succeeding assessment year a certificate:
(a) of the District Magistrate to the effect that the person who has been provided employment belongs to the category of Scheduled Castes or Scheduled Tribes or Other Backward Classes of Citizens or Minorities, as the case may be.
(b) of an officer not below the rank of an Assistant Labour Commissioner to the effect that such industrial unit has provided employment to the persons belonging to Scheduled Castes, Scheduled Tribes, Other Backward Classes of Citizens and Minorities in the required proportion to the total employment during whole or part or parts of the assessment year concerned.
(2) The industrial unit shall be entitled to the concession in the rate of tax only during the period in which employment in the required proportion to the total employment has been provided to persons belonging to the Scheduled Castes, Scheduled Tribes, Other Backward Classes of Citizens and Minorities. Explanation:
For the purposes of this notification, the term "total employment" shall include only the persons who contribute to the Fund established under Employees, Provident Fund and Miscellaneous Provisions Act, 1952.
9. Section 4-AA of the Act starts with non obstante clause i.e. "notwithstanding anything contained in this Act" and. therefore, Section 4-AA of the Act has overriding effect over other sections of the Act. Under Section 4-AA of the Act, dealer is entitled for the exemption over and above the exemption applicable under Section 4-A of the Act. Section 4-AA of the Act and the Notification No. TT-2-779/X1-9 (226)/94- U.P. Act 15/48-Order-95 dated 3 1.03.1995 provides exemption to the extent of 25 percent of the rate of tax. Rate of tax means a general rate of tax applicable to the commodity. Cement was taxable at the rate of 12 percent and, therefore, under Section 4-AA of the Act, exemption available was 25 percent of 12 percent i.e. 3 percent. Section 4-AA of the Act does not speak about the exemption of 25 percents on the payable during the year under consideration. It provides exemption of 25 of the rate of tax. In this view of the matter, order of the Tribunal is legally correct and is hereby upheld.
10. In the result, revision fails and is. accordingly, dismissed.