Court No. - 36
Case :- SALES/TRADE TAX REVISION No. - 136 of 2021 Revisionist :- The Commissioner, Commercial Tax U.P. Lucknow Opposite Party :- S/S L.G. Electronics Pvt. Ltd. Counsel for Revisionist :- Bipin Kumar Pandey Counsel for Opposite Party :- Nishant Mishra
Hon'ble Mahesh Chandra Tripathi,J.
Heard Shri B.K. Pandey, learned Standing Counsel for the revisionist and Shri Tarun Gulati, learned Senior Counsel assisted by Shri Nishant Mishra, learned counsel for the opposite party-respondent.
Present revision under Section 58 (1) of the U.P. Value Added Tax Act (in short "the Act") has been preferred against the order dated 6.3.2020 passed by the Commercial Tax Tribunal, U.P. Lucknow in Second Appeal No.16 of 2008.
Briefly stated the facts relevant for decision of the present case are that the assessee, an Indian company is a subsidiary of L.G. Electronics, Korea (hereinafter referred to as the 'parent company'). On 29.01.1997, the parent company was granted approval by the Government of India (Ministry of Industry), to set up the assessee company - a 100% owned subsidiary company in India to manufacture and market various electrical and electronic appliances including washing machines, refrigerators, air conditioners, colour televisions, audio and video equipments. Then, on 04.11.1997, the Government of India amended its approval letter dated 29.01.1997 and granted further approval to the parent company to manufacture and market (by the assessee company) various electrical and electronic appliances mentioned in the letter dated 29.01.1997 and also Microwaves ovens and PC monitors. In the light of such approval letters, the assessee company was incorporated and consequently engaged in the activity of manufacture and marketing of various electrical appliances and electronic goods.
In the context of the dispute that had arisen, it is seen that the State Government had, vide notification nos. 780 and 781, both dated 31.03.1995, provided for schemes to grant exemption to 'new units' established inside the State and to units engaged in expansion, diversification and modernisation, during the period 01.04.1995 and 31.03.2000. It is a common case between the parties that the aforesaid notifications came to be amended on 16.11.1995, by notification nos. 2760 and 2761, whereby, instead of providing for exemption by way of monetary limit, with respect to other than electronic goods, exemption was provided only with reference to time from the date of start of production. Again, by notification nos. 640 and 641, both dated 21.02.1997, the scheme for exemption was supplemented. Thereby, the State Government notified further exemptions to 'new units' undertaking expansion, diversification, backward integration and modernisation between 01.12.1994 and 31.03.2000, subject to their investment of Rs. 50 crores or more.
It is not in dispute that initially, the assessee did establish a 'new unit' to manufacture colour televisions, washing machines and air conditioners. Upon application made in that regard, DLC granted exemption to the assessee on a total fixed capital investment of Rs. 51,37,35,446/- with effect from the date of first sale - 27.03.1998, for a period of 15 years, upto 200% of that fixed capital investment.
Thereafter, the assessee first diversified to manufacture PCB (Printed Circuit Board) and Microwave Ovens. Though the two commodities PCB and Microwave Oven would have been separately manufactured and investment made in that regard may have been segregated in two parts, however, upon a single application made by the assessee, it was granted exemption on that investment, vide eligibility certificate issued by the DLC dated 27.09.2000. To that extent, there is absolutely no dispute.
Thereafter, the assessee claims to have carried out a second diversification, which for unexplained reasons came to be described (by the assessee) as a joint-venture to manufacture refrigerators and PC monitors. This, the revenue authorities have treated as two separate diversifications, whereas, according to the assessee, it was also a single diversification to manufacture refrigerators and monitors. That decision had also been implemented simultaneously. However, it is the further case of the assessee, that PC monitors are electronic goods whereas the refrigerators were electrical goods. Therefore, there existed certain doubts, as to which of the above noted three notifications would apply to each of those items. To that extent, the assessee has tried to explain its conduct of filing two separate applications - one to seek exemption on manufacture of refrigerators (electrical goods), and other to seek exemption to manufacture PC monitors (electronic goods), upon a legal opinion obtained by it. In any case, the assessee first filed an application on 10.01.2002 with respect to manufacture of refrigerators, and another on 28.12.2002 for manufacture of monitors.
It is also a fact that the aforesaid two applications came to be considered separately by the DLC. The application to claim exemption for manufacture of refrigerators was allowed by the DLC, vide its order dated 12.05.2003, and in that regard, the assessee was granted exemption on the entire investment of Rs.42 crores made by it. However, the second application filed with respect to PC monitors was rejected by the DLC by its order dated 07.07.2005 treating the same to be diversification separate and distinct from diversification to manufacture refrigerators. Accordingly, the investment of Rs. 8.13 crores, made by the assessee, was found to be below the qualifying limit of 25% of the original fixed capital investment (Rs. 51,37,35,446/-). This order was sought to be reviewed. However, the review application was rejected by the DLC on 24.05.2006. Upon appeal, the Tribunal allowed the assessee's appeal and remitted the matter to the DLC with a finding to the effect that it was clear that the purchases regarding machineries to manufacture both products (that is refrigerators and monitors) was carried out during the same period. Also, the Tribunal found that the DLC had not taken into consideration this material fact while rejecting the application for grant of exemption with respect to investment made to manufacture PC monitors. Accordingly, the Tribunal directed the DLC to record a clear finding considering the relevant material that was also referred to in that order.
Upon remand, the DLC again rejected the application filed by the assessee by its order dated 25.04.2008. This order became the subject matter of second challenge before the Tribunal that came to be decided on 16.05.2012. The Tribunal again allowed the assessee's appeal and set aside the order passed by the DLC and specifically held that there was no bar in two applications being filed by the assessee claiming exemption for single diversification, expansion etc. Thus, the Tribunal observed as under:
"Therefore, a second or supplementary application may be moved and to our mind, there appears no bar in moving separate applications within the time prescribed for grant of Eligibility Certificate."
It was further observed by the Tribunal:
"The issue as to whether diversification undertook by appellant dealer regarding manufacture of refrigerator and monitor is a joint venture, is very material for determination of application moved by appellant dealer regarding grant of Eligibility Certificate for monitor. Therefore, without deciding this issue, the rejection of appellant's application on the ground that two separate applications are not maintainable, appears incorrect."
The matter was again remitted to the DLC to pass a fresh order in view of the observations made by the Tribunal.
The aforesaid order became subject matter of challenge at the instance of the assessee (only), in Sales/Trade Tax Revision No. 815 of 2012 that came to be decided by order dated 22.08.2012. This Court set aside the order of the Tribunal insofar as it had remitted the matter to the DLC and required the Tribunal itself to decide that issue. Relevant to our purpose, the revision was disposed of with the following direction:
"Thus this Court directs the tribunal to decide the issues relating to diversification by way of adding new item of manufacture such as T.V. and monitor on merits and in accordance with law within a period of three months from the date of production of a certified copy of this order being placed by the petitioner within 15 days from today. Needless to say that a proper opportunity shall be given to the assessee. The impugned order of the tribunal dated 16.5.2012 is set aside.
The revision is disposed of as above. No costs."
In compliance of the aforesaid order, the Tribunal has again adjudicated the issue by order dated 22.10.2012 which has given rise to Sales/Trade Tax Revision No.125 of 2013 (L.G. Electronics India Pvt. Ltd. v. commissioner of Commercial Taxes) (in short "the previous revision"), which was finally disposed of by judgment and order dated 24.10.2019. In the previous revision the bone of contention was whether under clause (d) of Explanation (5) of the Section 4A of UPTT Act additional fixed capital investment of Rs.42 crores in refrigerator and Rs.8,13,30,080/- in monitor should be treated as joint diversification in terms of the judgment of Hon'ble Supreme Court in the case of DSM Group of Industries and according the Applicant should be granted exemption under Section 4A and further whether the assessee can be denied the benefit of exemption under Section 4-A, when admittedly the assessee's industrial undertaking has made additional fixed capital investment of more than 25% of the original fixed capital investment. In the previous revision it had been claimed that the assessee simultaneously carried out the diversification work to set up a manufacturing unit for manufacture of refrigerators and monitors, by way of a single diversification exercise. On the basis of list of details of plants, machinery, equipment, apparatus and component to manufacture refrigerators and monitors, it had been claimed that the diversification into manufacture of refrigerators and PC monitors was carried out simultaneously during the year 2000-
01. While considering the previous revision the Court also opined that no evidence was led by the revenue to rebut the claim made by the assessee on the strength of the evidence and the revenue authorities relied on presumptions solely occasioned by the fact that the assessee had filed two separate applications for grant of exemption on manufacture of refrigerators and PC monitors, which ground was found to be irrelevant by the Tribunal itself. In the previous revision the Court has also noticed the contention of the assessee that there was evidence existing on record to establish that the entire diversification exercise to manufacture refrigerators and PC monitors was a single step diversification and the same was prima facie found to be based on evidence on record before the Tribunal. It was also observed that it is not a case where the assessee may not have led any evidence in support of its case. The observations and conclusions of the Tribunal, to the contrary, were found to be perverse. (Ref. Para 30 of the previous revision). The previous revision was disposed of with direction to the Tribunal to consider and decide the matter on the strength of evidence placed before it with further rider "insofar as the correct approach to be followed, that has been settled above." The relevant portion of the judgment dated 24.10.2019 is reproduced hereunder:-
"..........13. Heard Sri Tarun Gulati, learned Senior Counsel assisted by Sri Nishant Mishra, learned counsel for the assessee and Sri B.K. Pandey, learned Standing Counsel for the revenue.
14. Present revision was itself admitted on the following questions of law:
"A. Whether under clause (d) of Explanation (5) of the Section 4A of UPTT Act additional fixed capital investment of Rs.42 crores in refrigerator and Rs.8,13,30,080/- in monitor should be treated as joint diversification in terms of the judgment of Hon'ble Supreme Court in the case of DSM Group of Industries and according the Applicant should be granted exemption under Section 4A?
B. Whether for the purposes of clause (d) of Explanation (5) of Section 4-A of the Act, additional fixed capital investment of the 'industrial undertaking' as a whole has to be taken into account or item-wise additional fixed capital investment has to be seen?
C. Whether the Applicant can be denied the benefit of exemption under Section 4-A, when admittedly the Applicant's industrial undertaking has made additional fixed capital investment of more than 25% of the original fixed capital investment?
D. Whether the Tribunal has wrongly relied upon Clause (d) of the above explanation (4) of Section 4A of UPTT Act to hold that the Applicant has himself separately shown the investment in refrigerator and monitor, therefore it cannot be considered jointly for the purpose of Section 4A?"
15. Relying on the plain language of Section 4-A(1) read with proviso as also sub-section 2(c) and 5(b) of the Act as also notification nos. 780 and 781, both dated 31.03.1995, notification no. 2760 dated 16.11.1995 as also notification nos. 640 and 641, both dated 21.02.1997, it has been submitted - plainly, the object for grant of exemption under Section 4-A of the Act was to encourage new investment by the industry to bolster industrial growth in the state. The intent of legislature had been to encourage investment in 'new unit' or any existing unit for expansion, diversification and modernisation and or backward integration or in one of them. With respect to claim of diversification, the only further requirement appears to be that the goods manufactured as a result of diversification must be different from those manufactured before diversification.
16. Insofar as the exemption notifications are concerned, it has been submitted that there is no dispute that the assessee had made investments to carry out diversification to manufacture such goods as were different from the goods earlier manufactured by it. The only doubt that the revenue authorities have raised and persisted with is that the investment made to establish the PC monitor unit, by way of diversification, did not qualify for exemption as investment of Rs. 8.13 crores was not below the statutory limit of 25% initial fixed capital.
17. Heavy reliance has been placed first on the decision of the Supreme Court in Commissioner, Trade Tax, U.P. Vs. DSM Group of Industries, (2005) 1 SCC 657, to submit that the foundation for a valid claim for exemption does not depend on whether there were two applications or whether there were two or more units in which an establishment may have made investment. Referring to the facts in the case of DSM Group (supra), it has been submitted, in that case, there were three separate units established in three separate districts of the State. It had been claimed that investments made by the company which owned all the three units exceeded the prescribed limit of 50 crores. Therefore, that fact alone was held to be determinative to hold the assessee eligible to exemption. The exact investment made in individual units was found to affect the determination of the limit of exemption available on goods manufactured by each unit. That law is stated to have been followed by the Supreme Court till as late as in G.P. Ceramics Private Limited Vs. Commissioner, Trade Tax, Uttar Pradesh, (2009) 2 SCC 90.
18. Also, the principle of purposive construction has been invoked by relying on the decision of the Supreme Court in Commissioner of Sales Tax Vs. Industrial Coal Enterprises, (1999) 2 SCC 607 and Bajaj Tempo Ltd., Bombay Vs. Commissioner of Income Tax, Bombay City-III, Bombay, (1992) 3 SCC 78 to submit that the rule of strict construction may be applied only for the purposes of determining the eligibility to exemption and no further.
19. In so far as there exists credible and sufficient evidence to establish that the assessee had engaged in a common diversification exercise to manufacture both refrigerators and PC monitors, at a single point in time, at the same unit, the investment made in that exercise had to be taken as composite whole and not truncated by looking at the investment made to manufacture refrigerators as distinct and independent of that made to manufacture PC monitors. The fact that the assessee was forced to or; chose to file two separate applications would remain a factor extraneous to the dispute, inasmuch as, such application became necessary on account of separate notifications providing for separate methods of computation of exemption on manufacture of electronic goods and electrical goods. Since the State treated refrigerators and PC monitors differently, the assessee had no choice in the matter but to file separate applications to disclose the facts relevant to each of those two items, more specifically by filing separate applications. In any case that fact has not been found to be adverse to the assessee.
20. In that regard, it has also been submitted, even at the stage of first diversification, while granting the eligibility certificate, the DLC itself clearly specified the items PCB and microwaves separately in the eligibility certificate dated 27.09.2000 for the purpose of computation of exemption on each of those commodities. Therefore, it has been submitted that, the State authorities themselves construed scheme of exemption and implemented scheme of exemption so as to treat the total investment as a composite investment to fix eligibility to exemption and to bifurcate the same only for the purpose of computing the limit or extent of that exemption.
21. As to the facts of the case, relying on various documents that are stated to have been filed by the assessee before the Tribunal, it has been submitted, besides the original approval letters issued by the Government of India wherein refrigerators and PC monitors were clearly mentioned as goods to be manufactured by the assessee, the annual report of the assessee for the period ending 31.03.2000, contained a clear recital and announcement of the management of the assessee company to start manufacture of refrigerators and PC monitors, which manufacturing units were projected to commence production in July, 2001 and May, 2001 respectively. Then, as a fact, it has been claimed that the assessee simultaneously carried out the diversification work to set up a manufacturing unit for manufacture of refrigerators and monitors, by way of a single diversification exercise.
22. Relying on a list of details of plants, machinery, equipment, apparatus and component to manufacture refrigerators and monitors, it has been submitted that the diversification into manufacture of refrigerators and PC monitors was carried out simultaneously during the year 2000-01. Emphasis has been laid on the fact that the assembly lines that were the main component of the plant and machinery used to manufacture those goods were purchased by two separate invoices raised on the assessee on same date, being February 26, 2001. All these documents are claimed to be existing on the record of the Tribunal. Then referring to the written arguments that were placed before the Tribunal, it has been further emphasised that this issue was specifically raised by disclosing (based on evidence on record), the date of Commercial Invoice to purchase separate assembly lines for the two products as common i.e. 26.02.2001 and the date of first investment in plant and machinery for refrigerators as 01.02.2001 whereas that for PC monitors as 15.11.2000. Further, the date of starting production of PC monitors was 11.5.2001 whereas that of refrigerators was 11.07.2001. It also, established existence of a single diversification.
23. Also, it has been submitted, no evidence was led by the revenue to rebut the claim made by the assessee on the strength of the evidence noticed above. The revenue authorities relied on presumptions solely occasioned by the fact that the assessee had filed two separate applications for grant of exemption on manufacture of refrigerators and PC monitors, which ground was found to be irrelevant by the Tribunal itself.
24. Coming to the impugned order of the Tribunal, learned Senior Counsel would submit that the Tribunal has completely failed to appreciate the applicability of the ratio of the decision in the case of DSM Group (supra). Referring to that decision, it has been emphasised that the decision of the Supreme Court in Commissioner of Trade Tax, U.P. and Anr. Vs. Kajaria Ceramics Ltd., (2005) 11 SCC 1 was a case which would fall in the exception to the rule laid down by the Supreme Court in DSM Group (supra).
25. Opposing the present revision, learned Standing Counsel would submit that sufficient opportunity had been granted to the assessee by the Tribunal to bring on record the evidence to establish that the diversification exercise was a single business venture. In fact, the assessee failed to bring such evidence on record the minutes of the meeting of it's own Board of Directors indicating that the diversification exercise was carried out as a single exercise. Referring to the same, the Tribunal has rightly rejected the claim made by the assessee. Insofar as the present assessee has also not brought on record any estimate, plan, drawing, etc to establish that the exercise of diversification was one and not two, the Tribunal has not erred in dismissing the appeal filed by the assessee and in distinguishing the ratio in the case of DSM Group (supra). As to rule to be applied, learned Standing Counsel would submit that the Tribunal has not erred in placing the burden on the assessee to establish that it was the a single diversification. In absence of the burden to prove being discharged, the Tribunal has rightly rejected the appeal.
26. Having heard learned counsel for the parties and having perused the record, in the first place, as a rule, it cannot be disputed that at the threshold i.e. to determine whether the assessee was eligible to exemption a strict rule of interpretation had to be enforced. However, undisputedly, the assessee did engage in diversification upon establishing manufacturing facility to manufacture refrigerators and PC monitors. No goods similar to those were being manufactured by it, earlier. Thereafter, a purposive construction has to be made. In paragraph nos. 11 and 12 of the Supreme Court decision in Industrial Coal (supra) held as:
"11. In CIT v. Straw Board Mfg. Co. Ltd. [1989 Supp (2) SCC 523 : 1990 SCC (Tax) 158] this Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd. v. CIT [(1992) 3 SCC 78] it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision.
12. We find that the object of granting exemption from payment of sales tax has always been for encouraging capital investment and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industry in the State. If the test laid down in Bajaj Tempo Ltd. case [(1992) 3 SCC 78] is applied, there is no doubt whatever that the exemption granted to the respondent from 9-8-1985 when it fulfilled all the prescribed conditions will not cease to operate just because the capital investment exceeded the limit of Rs 3 lakhs on account of the respondent becoming the owner of land and building to which the unit was shifted. If the construction sought to be placed by the appellant is accepted, the very purpose and object of the grant of exemption will be defeated. After all, the respondent had only shifted the unit to its own premises which made it much more convenient and easier for the respondent to carry on the production of the goods undisturbed by the vagaries of the lessor and without any necessity to spend a part of its income on rent. It is not the case of the appellant that there were any mala fides on the part of the respondent in obtaining exemption in the first instance as a unit with a capital investment below Rs 3 lakhs and increasing the capital investment subsequently to an amount exceeding Rs 3 lakhs with a view to defeat the provisions of any of the relevant statutes. The bona fides of the respondent have never been questioned by the appellant."
27. It also cannot be disputed that the burden to establish that the assesse had made a single diversification to manufacture refrigerators and PC monitors rested on the assessee. It was a special fact in the knowledge of the assessee. Therefore, the burden would remain on the assessee to prove the same and for the revenue authorities to rebut such evidence as the assesse may produce. To that extent, the Tribunal has not erred in its approach. In fact, the Tribunal has also itself found (in its order dated 16.5.2012) that mere filing of two separate applications for diversification to manufacture refrigerators and monitors would be inconsequential. That finding was never assailed by the revenue. In fact, the Tribunal had gone to the extent of holding that the assessee's application could not be rejected merely because two separate applications had been filed. Thus, it is to be seen whether thereafter, the Tribunal has correctly dealt with the matter.
28. It is here that the Tribunal's approach is lacking. The Tribunal appears to have completely over-looked the most material part of the evidence relied upon by the assessee. In that, it had relied on the original approval letters issued by the Government of India dated 29.1.1997 and 4.11.1997 wherein it clearly disclosed its intent to set up a unit to manufacture, amongst others, refrigerators and PC monitors. Then the assessee is a public limited company. In its annual report for the period ending 31 March, it appears, it had been specifically stated as under:
"Despite increased competition, your Company is confident of garnering a higher growth in its products during the year 2001. The Company is planning to introduce many new models, thus making the company with the widest range of models in all its product category. During the year 2000, the Company has started work to add a Refrigerator Plant to its existing production facilities which would be operational by July 2001. The Company is planning to start assembling of Monitors in India in May 2001."
29. Not only such position appears to have been made clear in such public document, but also the assessee substantiated the same by adducing corroborative evidence in the shape of same date invoices dated 26.2.2001 to purchase vital machineries, being separate assembly lines to manufacture PC monitors and refrigerators. Further corroborative evidence appears to have been filed in the shape of details of plant and machinery, equipments, parts and components, etc. purchased to set up the manufacturing facilities for refrigerators and monitors. Those dates overlapped or ran parallel. Moreover, the date of first investment; starting production and; first sale for the two goods PC monitors and refrigerators were very close to each other as appear to be prima facie supportive of the claim made by the assessee -15.11.2000 and 01.02.2001 being the dates of first purchase of plant and machinery for PC monitors and refrigerators respectively. Similarly, 11.05.2001 and 11.7.2001 were the closely arising dates of start of production of PC monitors and refrigerators, respectively. Even the date of first sale of PC monitors was 30.05.2001 whereas that of refrigerators was 18.07.2001.
30. Therefore, the contention of the assessee that there was evidence existing on record to establish that the entire diversification exercise to manufacture refrigerators and PC monitors was a single step diversification, is prima facie found to be based on evidence on record before the Tribunal. It is not a case where the assessee may not have led any evidence in support of its case. The observations and conclusions of the Tribunal, to the contrary, are found to be perverse.
31. In the case of Kajaria Ceramics (supra), that assessee had consistently claimed to have filed three separate applications to the DLC stating therein that it had started production on specified dates and that it had undertaken three successive expansions during the period 1990 to 1994. Subsequently, that is on 21.11.1994 i.e. after the last expansion claimed by Kajaria Ceramics (supra), it withdrew all earlier applications and filed a revised application thereby claiming, for the first time, that it had carried out a single expansion during the period 12.08.1988 to 28.03.1994. Such claim came to be rejected by the DLC, which order was rejected by the Tribunal, however, this Court had allowed the claim made by Kajaria Ceramics (supra). Upon appeal filed by the State before the Supreme Court framed issue no.2 as below:
"II. Whether the respondent's claim of one integrated expansion from 12,000 TPA to 60,000 TPA during the period 12-8-1988 to 28-3-1994 is sustainable in fact or in law?"
32. Dealing with that issue, the Supreme Court had held that it was never the onus of the revenue to prove that there were three separate expansions. Admittedly Kajaria Ceramics had later changed its stand and claimed existence of a single scheme of expansion carried out in three phases as against its earlier stand of having engaged in three separate expansions. Considering that crucial fact, the Supreme Court reasoned that the onus to establish a single expansion in three phases remained undischarged at the hands of that assessee/Kajaria Ceramics.
33. It was in that factual context, the Supreme Court further observed that the scheme of expansion would necessarily warrant estimates, plants, drawings etc. It then observed, there was not a single piece of evidence, to establish that the expansion was a single step exercise carried out by that assessee. On the contrary, it was found that with respect to each three expansions, separate industrial licences had been applied for and obtained by that assessee. Moreover, separate negotiations had also been entered into at each stage. Therefore, in the face of such evidence, it was concluded that there were three separate expansions carried out by that assessee.
34. Such evidence has not been shown to exist in the present case. In fact, at present, the entire evidence appears to indicate at least on prima facie basis that the decision to diversify and its implementation was a single effort made by the assesse, which for unexplained reasons, came to be described as joint-venture. However, that word description is of no legal consequence. Therefore, the Tribunal has failed to consider material evidence filed by the assesse and record any finding on that. It also appears, at least at this stage, that the revenue authorities had not rebutted such evidence by filing any other evidence.
35. In the facts of this case, the finding recorded by the Tribunal that the case of the assessee is similar to that of the Kajaria Ceramics (supra) and invoking that rule is wholly misplaced. In any case, in the case of Kajaria Ceramics (supra), the Supreme Court did not lay down a rule of evidence that for a single diversification or expansion, it was always necessary for the assessee to bring on record estimates, plants, drawing, etc. It was in the facts of that case that such observations appear to have been made. No specific rule or evidence has been prescribed either under the Act or the Rule framed thereunder. It would remain a matter to be considered and decided on the facts of each prescribed case. Thus, the assessee was not obliged to lead any particular evidence to establish its claim or else to face rejection. However, it was always open to the revenue to rebut that evidence or lead its own evidence to defeat the claim of the assessee. At present, it is not clear if that evidence had been led. In any case the findings of the Tribunal are found to be lacking.
36. Again, reference made by the order of the Tribunal to the minutes of the Board of Directors, though relevant, but as noted above, the same was not the only evidence to be considered by it. On the face of it, the minutes of the meeting, as extracted in the order of the Tribunal, referred to the date of start of production of two items, namely refrigerators and PC monitors. However, the same are not such as may lead to the conclusion that, two mutually exclusive or separate diversification had been taken by the assessee to manufacture those items.
37. There is also no apparent self-contradiction in the claim made by the assessee. It had consistently stated that it had filed two applications under legal advice owing to different treatment of the two items, namely refrigerators and monitors under the relevant exemption notifications. It had also referred to the own interpretation/treatment offered by the State authorities in granting exemption, specific to the investment made to manufacture each commodity. Thus, the assessee had relied on the certificate issued with respect to the diversification to manufacture PCB and Microwave Ovens vide eligibility certificate dated 27.9.2000. That issue has also remained from being thrashed out by the Tribunal.
38. Accordingly, I find that the Tribunal has misdirected itself in approach and, therefore, its order cannot be sustained. As to what would be the conclusion to be drawn on facts, is not being commented upon in this order. That would remain for the Tribunal to consider and decide on the strength of evidence placed before it. Insofar as the correct approach to be followed, that has been settled above.
39. In view of the above, the questions of law (as framed above) remain unanswered.
40. Accordingly, the order of the Tribunal is set aside and the matter is remitted to it to pass a fresh, strictly in accordance with law, keeping in mind the observations made above.
41. The aforesaid exercise may be completed as expeditiously as possible, preferably within a period of six months from the date of production of certified copy of this order.
42. With the aforesaid observations, the present revision stands disposed of."
In response to the judgment and order passed in the previous revision the Tribunal considering the evidences, facts and judgments cited before it allowed the Second Appeal No.16 of 2008 vide order impugned dated 6.3.2020 with an observation that the assessee simultaneously carried out the diversification work to set up a manufacturing unit for manufacture of refrigerators and monitors, by way of a single diversification exercise.
The order impugned is challenged by the revenue in the present revision on the ground that once the matter was remitted to the Tribunal, it was incumbent upon the Tribunal to consider the evidences and facts independently without being influenced by the previous revisional order. It is contended that without touching the merit and evidences the Tribunal solely relied upon the previous revisional order and in arbitrary manner decided the matter, which is unsustainable and contrary to the mandate of the previous revisional order.
Per contra, learned counsel for the respondents has vehemently opposed the revision and submitted that the order impugned has been passed strictly in accordance with law and there is no infirmity in it. In support of his submissions he has placed reliance on the judgment in Commissioner of Sales Tax, U.P.
v. Kumaon Tractors & Motors, (2002) 9 SCC 379, wherein it has been held that the High Court has limited jurisdiction to interfere with the order of Tribunal. Interference can be made only on the question of law, which has to be precisely stated or formulated. Reliance has also been placed on the judgment in Commissioner of Trade Tax, U.P. v. J.U. Pesticides & Chemical P. Ltd., 2008 (224) E.L.T. 19 (SC), wherein it has been held that the High Court has limited jurisdiction under Section 11 of U.P. Trade Tax Act, 1948 in appeal. High Court not to interfere with orders of departmental authorities and the Tribunal, on question of appreciation of factual aspects. It was further held that if fact finding authority comes to certain conclusion honestly and bona fidely, the mere fact that Court may have a different perspective of that question, cannot be a ground to interfere with the finding even though another view may be possible. Learned counsel for the respondents has also placed reliance on the judgments in Commercial of Sales Tax v. Swadeshi Metal Works, Sales Tax Revision Nos.75, 76, 77 and 79 of 1986 decided on 30.07.1986; Commissioner of Trade Tax v. New Brij Sudh Deshi Ghee Store, Trade Tax Revisions Nos.499 and 502 of 1999 decided on 12.9.2002 and Commissioner, Commercial Tax v. Dabur India Ltd., Sales/ Trade Tax Revision Nos.441 of 445, 447, 448, 450, 451, 453, 455, 463 to 465 467 and 507 to 509 of 2014 decided on 25.09.2014.
Heard rival submissions, perused the record and respectfully considered the judgments cited at Bar.
The Revision No.125 of 2013 was admitted on the following questions of law:-
"A. Whether under clause (d) of Explanation (5) of the Section 4A of UPTT Act additional fixed capital investment of Rs.42 crores in refrigerator and Rs.8,13,30,080/- in monitor should be treated as joint diversification in terms of the judgment of Hon'ble Supreme Court in the case of DSM Group of Industries and according the Applicant should be granted exemption under Section 4A?
B. Whether for the purposes of clause (d) of Explanation (5) of Section 4-A of the Act, additional fixed capital investment of the 'industrial undertaking' as a whole has to be taken into account or item-wise additional fixed capital investment has to be seen?
C. Whether the Applicant can be denied the benefit of exemption under Section 4-A, when admittedly the Applicant's industrial undertaking has made additional fixed capital investment of more than 25% of the original fixed capital investment?
D. Whether the Tribunal has wrongly relied upon Clause (d) of the above explanation (4) of Section 4A of UPTT Act to hold that the Applicant has himself separately shown the investment in refrigerator and monitor, therefore it cannot be considered jointly for the purpose of Section 4A?"
In previous revision, after perusal of record, the Court has opined in para 26 that in the first place, as a rule, it cannot be disputed that at the threshold i.e. to determine whether the assessee was eligible to exemption a strict rule of interpretation had to be enforced. However, undisputedly, the assessee did engage in diversification upon establishing manufacturing facility to manufacture refrigerators and PC monitors. No goods similar to those were being manufactured by it, earlier. Therefore, a purposive construction has to be made. Reliance had also been placed on para 11 and 12 of the judgment of Hon'ble Apex Court in Commissioner of Sales Tax Vs. Industrial Coal Enterprises, (1999) 2 SCC 607. The Court further observed that it also cannot be disputed that the burden to establish that the assesse had made a single diversification to manufacture refrigerators and PC monitors rested on the assessee. It was a special fact in the knowledge of the assessee. Therefore, the burden would remain on the assessee to prove the same and for the revenue authorities to rebut such evidence as the assesse may produce. Finally in the previous revision the Court held that the Tribunal has misdirected itself in approach and, accordingly, the order dated 22.10.2012 passed by the Full Bench of the Commercial Tax Tribunal, Lucknow in Appeal No.16 of 2008 under Section 4-A of the U.P. Trade Tax Act, 1948 was held to be unsustainable. The matter was remitted to the Tribunal without making any comments on facts and the Tribunal was directed to decide the matter on the strength of evidence placed before it.
Now at this stage it is not expected from this Court to take fresh appraisal of the evidences or fact findings recorded by the Tribunal, or submitted for consideration by the revenue/revisionist. The trade tax revision could not be dealt with and decided as an appeal by this Court as an appellate authority. If fact finding authority comes to certain conclusion honestly and bona fidely, the mere fact that Court may have a different perspective of that question, cannot be a ground to interfere with the finding even though another view may be possible. Considering the limited jurisdiction exercisable under the Act such a course is not available.
While passing the order impugned, the Tribunal has clearly proceeded to observe:-
"अपपीलकररर्ता ककं पनपी दररर प्रस्रतुर सरक्ष्यय , सकंदररर्तार रविधधिक व्यविस्थरओकं, रविज्ञरप्तियय एवि न्यररयक रनरर्तायय पर समग्र रूप ससे रविचरर करनसे पर अपपीलकररर्ता ककं पनपी दररर रफफ्रीधजिरटर वि ममॉरनटर कर रनमरर्तार एक हपी रविरविधिपीकरर कसे अकंररर्तार रकयर जिरनर प्ररपीर हहोरर हहै |" While passing the order impugned, the Tribunal has no doubt considered para 36 and 37 of the judgment passed by this Court but at the same time has also considered the documents and evidence filed before the Tribunal. The Tribunal has opined that there was single diversification for carrying out the work to set up manufacturing unit for manufacture of refrigerators and monitors. These are findings of fact, which cannot be interfered with by this Court in revisional jurisdiction. The revenue has not been able to place any material, which may indicate that the finding recorded by the Tribunal are based on no evidence or passed on irrelevant consideration.
This Court in its judgment dated August 13, 2002 passed in S.T.R. No. 25 of 2001, Naseer (Driver) v. Commissioner of Trade Tax, U.P. 2002 UPTC 1043 has observed that "this Court is not expected to take fresh appraisal of the evidences or fact findings recorded by the Tribunal, or submitted for consideration by applicant/ revisionist or the High Court shall formulate the question of law itself or allow any other question of law to be raised by the parties at the revision stage and the High Court shall after hearing the parties to revision, deal, adjudicate, or decide or answer such question of law even affirmatively or negatively. The trade tax revision could also not be dealt with and decided as an appeal by this Court as an appellate authority in exercise of its jurisdiction under Section 11 of "the Act" unless the law point or the question of law if any involved or it is shown that such finding of Tribunal is perverse based on no evidence, or no material on record or is otherwise arbitrary on the face of it which no court or authority could accept having regard to the prevailing facts and circumstances of a given case. The findings of learned Tribunal cannot be upset".
Hon'ble the Apex Court in Commissioner of Sales Tax, U.P. v. Kumaon Tractors & Motors, (2002) 9 SCC 379 has held that Section 11 of U.P. Trade Tax Act confers limited jurisdiction to interfere with the order of the Tribunal only on the question of law, which required to be precisely stated and formulated.
From the facts discussed by the Tribunal, it is apparent that the Tribunal arrived at finding of fact after adducing the evidence produced by the assessee and by the revenue that there was single diversification for carrying out the work to set up manufacturing unit for manufacture of refrigerators and monitors. In any set of circumstances, it cannot be said that the order passed by the Tribunal is in any way illegal or erroneous.
This Court is of the considered opinion that if the last fact finding authority i.e. the Tribunal has recorded finding of fact, the same cannot be interfered with in the revision provided the finding is perverse or it based on consideration of irrelevant material or not consideration of relevant material. The Court does not find any infirmity or illegality in the finding recorded by the Tribunal. In the facts and circumstances, it cannot be said that there was any question of law involved, which was required to be determined by this Court.
In view of above, the revision fails and is accordingly dismissed.
The party shall file computer generated copy of such order downloaded from the official website of High Court Allahabad, self attested by the party alongwith a self attested identity proof of the said person (preferably Aadhar Card) mentioning the mobile number to which the said Aadhar Card is linked.
The concerned Court/Authority/Official shall verify the authenticity of such computerized copy of the order from the official website of High Court Allahabad and shall make a declaration of such verification in writing.
Order Date :- 27.7.2021 SP/