JUDGMENT A.N. Varma, J.
1. The petitioners are carrying on business of manufacture and sale of steel pipes and tubes claiming to be a new unit and entitled to the exemption from sales tax under Section 4-A of the U.P. Sales Tax Act, 1948. The petitioners filed an application for the grant of an eligibility certificate. The application was considered by the Divisional Level Committee. It found that the petitioners were a new unit which would be deemed to have gone into production on October 3, 1983, within the meaning of explanation (1) to Section 4-A of the U.P. Sales Tax Act. The application was, however, rejected on the short ground that the petitioners' unit was registered under the Factories Act, 1948, subsequently, i.e., on January 1, 1985. The Divisional Level Committee appears to be of the view that inasmuch as this registration under the Factories Act took place after the unit had gone into production, the petitioners could not be granted eligibility certificate.
2. The view taken by the Divisional Level Committee is manifestly unsustainable in law. The basic thing to be found for examining an application under Section 4-A of the U.P. Sales Tax Act is whether the industrial unit applying for that benefit is a "new unit" as contemplated by Section 4-A and if it is found that it complies with the provisions of Section 4-A as well as the notifications issued thereunder the certificate has to be granted. In the present case we found that the petitioners were granted a registration certificate under the Factories Act on January 1, 1985. The condition contemplated by the notification issued by the Government on the subject has thus been fully complied with. Under these notifications in the case of unit in which the capital investment exceeds Rs. 3,00,000, one of the requirements is registration under the Factories Act. The date of the registration under the Factories Act, however is not relevant for the purpose of deciding whether the eligibility certificate should be granted or not. Once the unit is registered under the Factories Act, the unit becomes entitled to the grant of eligibility certificate provided it complies with the other conditions laid down under the notifications as well as under Section 4-A of the U.P. Sales Tax Act. The Divisional Level Committee was hence clearly wrong in rejecting the petitioners' application on the ground that the registration certificate was granted under the Factories Act to the petitioners subsequently to the date on which the petitioners' unit went into production. It may, however, be mentioned incidentally that the registration certificate granted to the petitioners under the Factories Act was subsequently amended whereby it was made effective from October 3, 1983. Thus on the findings recorded by the Divisional Level Committee itself the petitioners were entitled to the grant of the eligibility certificate.
3. In the result, the petition succeeds and is allowed. The impugned order passed by the Divisional Level Committee dated August 27, 1986 (annexure 7 to the writ petition) is quashed. The Divisional Level Committee is directed to issue eligibility certificate to the petitioners within one month of the date on which a certified copy of the order is filed before the Joint Director of Industries, Meerut, the convener of the Divisional Level Committee.