DIVISIONAL LEVEL COMMITTEE AND ANR. .._ I v. . ~-·

HARSWARUP DRUM UDYOG

FEBRUARY 2, 1999 [ B

[M. SRINIVASAN AND U.C. BANERJEE, JJ.]

U.P. Sales Tax Act, 1948: Section 4A. ,.

• Sales Txemption from-Respondent's application dated c 28.1.1992 for exemption of sales tejection--Ground that the registration of the lease deed was made on 27.3.1990 after the date of the first sale, namely, 19.5.1989 and, therefore, the lease deed having been registered after the date of the availability of the facility of exemption, the respondent was not entitled to claim the benefit of section 4-A-High Court held that the lease D deed having been registered on 27.3.1990, the respondent was entitled to get the exemption with effect from the date-However, it did not made clear whether the respondent would get exemption for a period off our years from 27.3.1990-Appeal before Supreme Court-Held, Sub-section (1) of Section -,..

4-A itself contemplates the grant of exemption whether 'wholly or

E partly'-Theref ore, an asses see can get exemption for a part of the period subject to fulfilment of all the conditions--!n the present case, the relevant condition is found in sub-cluase (c) of Clause 1 of Explanation to Section 4(1) A-:ln the present case though the lease was taken by respondent much earlier but the registration was made only on 27.3.1990-The lease being one

F for a period of seven years, required registration and will satisfy the requirement of the Section from the date of registration-Hence the High Court was right i~ holding that all the conditions are fulfilled on 27.3.199()-[n the present case, sub-section 5 of section 4A governs the situation-The respondent no doubt applied for exemption for the entire period but the conditions

G were fulfilled only on 27.3.1990 and the exemption can be granted only for the remaining period after that date-:ln other words, the respondent will be entitled to exemption for a period of 3 years 1 month and 4 days from 27.3.1990.

• ._..,,,,,,,, CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3543 of

H 1996.

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DIVISIONAL LEVEL COMMITTEE v. HARSW ARUP DRUM UDYOG 337

---.- From the Judgment and Order dated 5.12.94 of the Allahabad High A Court in C.M.W.P. No. 485 of 1992.

Avadh Behari Rohtagi, R.B. Misra, (Sunil Kumar) (NP). Jitendra Mohan Sharma, Dr. Meera Aggarwal and Ramesh Chandra Mishra for the appearing parties.

B ",

• The following Order of the Court was delivered :

...

The Divisional Level Committee constituted under Section 4-A of the U.P. Sales Tax Act, 1948 (for short "the Act"), and the State of U.P. are aggrieved by the order of the High Court passed in Civil Misc. Writ c - Petition No. 485 of 1992 quashing the order of the Committee rejecting an application filed by the respondent for exemption from payment of sales tax under Section 4-A of the Act.

2. The order of the Joint Director of Industries rejecting the application of the respondent dated 28.1.1992 shows that the rejection was on the D ground that the registration of the lease deed was made on 27.3.1990 aft:::r the date of the first sale, namely, 19.5.1989 and, therefore, the lease deed having been registered after the date of the availability of the facility of exemption, the respondent was not entitled to claim the benefit of Section 4-A. The High Court has held that the lease deed having been registered E on 27.3.1990, the respondent was entitled to get the exemption with effect from that date. The High Court has not, however, made it clear whether the respondnet would get exemption for a period of four years from 27.3.1990.

3. Learned counsel for the appellants contends that the respondent F not having fulfilled all the conditions prescribed in Section 4-A of the Act - for getting the exemption on the date on which the first sale was effected, is not entitled at all to get the exemption for any period whatsoever.

According to him, the relevant date for grant of exemption is the that date of first sale as contemplated by sub-section (1) of Section 4-A of the Act. G According to him, if on that date, all the conditions are not fulfilled and they are fulfilled at a later date, the assessee will not be entitled to get the - exemption. . -

4. We are unable to agree with this contention. Sub-section (1) of Section 4-A itself contemplates the grant of exemption whether 'wholly or H

SUPREMECOURTREPORTS.

[1999] 1 S.C.R.

A partly'. That is sufficient to indicate that an assessee can get exemption for a part of the period subject to fulfilment of all the conditions. In the present case, the relevant condition is found in sub-clause ( c) of clause 1 of Explanation to the Section. Under that clause, a land or building or both should be owned or taken on lease for a period not less than seven years B by the dealer concerned. In the present case though the leave was taken much earlier, the registration was made only on 27.3.1990. The lease being one for a period of seven years, required registration and will satisfy the requirement of the Section from the date of registration. Hence the High Court is right in holding that all the conditions are fulfilled on 27.3.1990.

5. Sub-section (5) of Section 4-A reads as follows to the extent

relevant:

"(5) A manufacturer shall be entitled to the facility of exemption from, or reduction in, the rate of tax notified under sub-section

(1) -

xxx xxx xxx xxx

(b) if he applies for such facility later than the date specified in clause (a) only for a part of the period notified under sub-section

(1) which shall be computed from the date of application till the E end of the period of facility;

xxx xxx xxx xxx

In the present case, the said sub-section governs the situation. The respondent no doubt applied for exemption for the entire period but the F conditions were fulfilled only on 27.3.1990 and the exemption can be granted only for the remaining period after that date. In other words, the respondent will be entitled to exemption for a period of 3 years 1 month and 4 days from 27.3.1990. In the present case, there is no dispute with regard to the other conditions set out in the Section having been fulfilled G by the respondent.

6. Learned counsel for the appellants contends that the matter should be remitted back to the High Court inasmuch as the respondent did not apply for exemption for a part of the period and the application was for the entire period of four years. We are unable to accept this contention.

H There is no need for remitting the matter as all the facts are clear. The

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DIVISIONAL LEVEL COMMITfEE v. HARSWARUP DRUM UDYOG 339

respondent has no doubt applied for a larger relief but the court is entitled A to mould the relief and grant a smaller relief than what is prayed for.

7. In the circumstances of the case, the judgment of the High Court is confumed with the clarification that the, exemption will be for a period of 3 years 1 month and 4 days from 27.3.1990. The appeal is dismissed with the above clarification, with costs.

T.N.A.

Appeal dismissed.