IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.1864/1996 Decided on.2.4.2008 M/s. Verma Enterprises. …Petitioner. Versus State of H.P. & others. …Respondents Coram The Hon’ble Mr. Justice Deepak Gupta, Judge. The Hon’ble Mr. Justice Rajiv Sharma, Judge. Whether approved for reporting ?1. No. For the petitioner : Mr. K.D. Sood and Mr. Rajnish K. Lal, Advocates. For the respondents Mr. R.M. Bisht and Mr. Rajesh Mandhotra, Deputy Advocate Generals. Deepak Gupta, J. (oral) The petitioner is a sole proprietorship firm. It applied for the grant of provisional registration for setting up a Small Scale Industrial Unit to manufacture watch parts. Provisional registration was granted to it on 27th May, 1977. Thereafter it appears that it made another application on 29.11.1979 for grant of provisional registration for setting up of a Small Scale Industrial Unit to manufacture mechanical wrist watches. Provisional registration in this regard was granted on 12.12.1979. The petitioner as per the registration certificate Annexure P-8 started manufacturing mechanical wrist watches. The State of Himachal Pradesh on 27th May, 1974 had issued a notification (Annexure P-4) giving exemption from payment of sale/purchase tax to the Small Scale Industries. The Units in existence 1 Whether the reporters of Local Papers may be allowed to see the judgment? Yes. 2 and registered with the Industries Department prior to 12.4.1971 were granted exemption for a period of 3 years and the Units registered and coming into existence after 12.4.1971 were given exemption from payment of sale/purchase tax for five years. This notification dated 27th May, 1974 was superseded by another notification dated 5th May, 1978. In this notification the benefits were reduced and the tax was leviable on the products manufactured and sold by the Small Scale Industrial Units though on a lower rate. The stand of the petitioner is that since the petitioner’s unit was initially registered prior to the notification dated 5th July, 1978 it is entitled to the benefits of notification dated 27th May, 1974 for five years from the date of coming into production and it should be exempted from payment of sales tax. The stand of the State is that initial registration was granted to the petitioner only to manufacture watch parts. This registration was for a period of six months only, which was never extended. Thereafter the petitioner applied for a fresh registration in the year 1979 and thereafter started manufacturing mechanical wrist watches in terms of the fresh registration granted to it. According to the State, the petitioner is only entitled to the benefits of the notification dated 5th July, 1978. The Assessing Officer as well as the Appellate Authority came to the conclusion that the petitioner is not manufacturing watch parts, but is manufacturing mechanical wrist watches and the registration for the same was granted only in the year 1979, and therefore, the petitioner is not entitled to the benefits contemplated in notification dated 27th May, 1974. We have heard M/s. K.D. Sood and Rajnish K. Lal, Advocates for the petitioner and Mr. R.M. Bisht, Deputy Advocate General for the State and perused the record. 3 Reliance has been placed by the petitioner on the initial registration dated 27th May, 1977 as well as paras 5 and 6 of the notification dated 27th May, 1974. We have given our careful consideration to the case. No doubt, under the notification dated 27th May, 1974, the Small Scale Industrial Units coming into existence after 12.4.1971 were to enjoy holiday from sale/purchase tax for a period of 5 years, but in the present case the petitioner did not set up the Small Scale Industry for which it was granted the provisional registration. It was granted provisional registration for setting up a unit to manufacture watch parts. It appears that in the meantime the proprietor of the unit changed his mind and decided to manufacture mechanical wrist watches. He, therefore, applied for fresh provisional registration. The fact that the petitioner had itself applied for fresh registration and not for the renewal of the registration indicates that the petitioner was aware that it was setting up a new industrial unit. This unit was admittedly registered after the issuance of notification dated 5th July, 1978. Therefore, in our considered opinion the Assessing Officer and Appellate Authority were absolutely right in holding that the petitioner is only entitled to the benefits of the notification dated 5th July, 1978 where- after it came into existence and is not entitled to the benefits of the notification dated 27th May, 1974 since the product which it was supposed to manufacture in terms of the registration granted to it in the year 1977 has admittedly not been manufactured by the petitioner firm. Consequently, the petition is without merit and is rejected. There shall be no order as to costs. (Deepak Gupta), Judge. ( Rajiv Sharma), Judge. April 2, 2008 *Awasthi*