Summarize the following court judgment. ivil Appeal No. 830 of 1988. 275 From the Judgment and Order Dated 7.12.1987 of the Allahabad High Court in Civil Misc. No. Nil 1987. A.K. Ganguli and Sunil Kumar Jain for the Appellant. Gopal Subramanium and Ashok K. Srivastava for the Re spondents. The Judgment of the Court was delivered by RANGANATHAN	 J. The petitioner is a concern engaged in the business of manufacture of electric motors	 pump sets and their parts. It applied for exemption from sales tax in respect of the goods manufactured by it in terms of a noti fication issued by the State Government on 30.9.1982 under section 4A of the Uttar Pradesh Sales Tax Act	 1948 (herein after called the 'Act '). This application was rejected by a Division Level Committee by an order dated 9.2. 1987 and a further review application was also dismissed on 27.10.1987. Thereupon the appellant filed a writ petition which was also rejected by the High Court by a short order dated 7.12.1987. Aggrieved by this denial of the exemption	 which it claims it is entitled to	 the appellant has preferred this appeal. Section 4A of the Act reads as under: "4 A. Exemption from sales tax of certain goods for specified period (1) Notwithstanding anything co tained in section 3 or section 3 A	 where the State Government is of the opinion that it is necessary so to do for increasing the produc tion of any goods or for promoting the devel opment of in any districts or parts of dis tricts in particular	 it may on application or otherwise	 by notification	 declare that the turnover of sales in respect of such goods by the manufacturer thereof shall	 during such period not exceeding seven years from the date of starting production by such manufacturer	 and subject to such conditions as may be specified	 be exempt from sales tax or be liable to tax at such reduced rate as it may fix. (2)It shall be lawful for the State Government to specify in the notification under sub section (1) that the 276 exemption from	 or reduction in	 the rate of tax shall be admissible (a) generally in respect of all such goods manufactured subsequent to the date of such notification; or (b) in respect of such of those goods only as are manufactured in a new unit	 the date of starting production whereof fails on or after the first day of October	 1982; or (c) only if the manufacturer had not discon tinued production of such goods for a period exceeding six months at a stretch in any assessment year. Explanation For the purposes of this section (i) 'new unit ' means a factory or workshop using machinery	 accessories or components not already used or acquired for use in any other factory or workshop in India but does not include any factory or workshop established on the site of an existing factory or workshop manufacturing the same goods or any addition to or extension of an existing factory or workshop; and (ii) 'date of starting production ' means the date on which any raw material required for use in the manufacture or packing of the specified goods is purchased for the first time or the date of installation of power connection	 where needed	 whichever is later. In pursuance of the above section	 the State Government published a scheme for the grant of exemption from sales tax to certain industrial units in the State. The scheme	 ac cording to its introduction	 had been introduced "in order to encourage capital investment and establishment of new industrial units in the State". It granted exemption to the industrial units established in certain areas of the State during the period from 1.10.1982 to 31.3.1985 and producing certain categories of goods. It is not necessary to refer in detail to the provisions of the scheme or other conditions of exemption. It is sufficient to say that this exemption was conferred only on units established on or after 1.10.1982 but before 31.3.1985. The scheme also makes it clear that though it referred to units "established" this really is a reference to the date of commencement of produc tion by the industrial 277 unit. This is also in accord with the terms of the statute and in particular sub section (2) of 4A. The appellant 's claim to exemption has been rejected on a very short ground	 namely	 that it had not commenced production after 1.10.1982. In the application filed by the appellant for exemption the appellant had mentioned that the date of actual com mencement of use of electricity for production was the 4th of December	 1982	 which was also the actual date of com mencement of production. The appellant also claimed that upto 30.9.1984 it had produced and sold electric motor parts for Rs.2	70	590. The General Managers of the District Indus trial Centers at Deoband and Saharanpur and the Assistant Engineer of the Industrial State of Roorkee endorsed the following recommendation on the application: " . . I have checked with the use of power and other sources that the unit started actual production from 4.12.1982 and the production made is self manufactured and is within the prescribed production capacity. 1 am fully satisfied with the facts produced by the Unit and I recommend that this unit is eligible to get exemption from sales tax/inter state sales tax . with effect from date of production commencement for 5 6 7 years under section 4 A of the Sales Tax Act vide G.O. No. 8244 Bha/18 11 231(A)Bha/39	 dated 30.9.82. " The difficulty in the appellant 's way appears to have been created by a certificate which had been produced by it before the Division Level Committee along with its applica tion. This purported to be a certificate by a firm known as Krishna Trading Co. (in which the proprietor of the appel lant was a partner). This certificate dated 4.12. 1981 reads as follows: "It is certified that the Trial Production of Kupla Bhatti was made today is 4.12.1981 expenses for which were incurred by our compa ny by purchasing raw material for its own ex penses under the agreement dated 15.5.1981 entered into. M/s Janta Machine Tools was assured by the company to supply very soon all the remaining machines and installing them and making its trial production at its own ex penses. " The Division Level Committee	 while rejecting the applica tion 278 dated 9.2.1987	 essentially gave only one reason for the rejection. It was stated that the date of the alleged trial production was really the date of commencement of production and this fell prior to 1.10.1982. As stated earlier the assessee preferred a review appli cation pointing out that the trial production could not be treated as commencement of actual production. This review application was disposed of on 27.10.1987. In its order the Committee observed: "On joint inquiry into the reality of your unit being conducted by the General Manager and sales tax officer of Deoband Industries Department they have reported that Shri Suresh Datt Sharma the proprietor of M/s Janta Ma chine Tools is partner of one third share in M/s Krishna Trading Company also. No purchase of raw material was declared by M/s Krishna Trading Company in the year 198 1 82	 and therefore	 the certificate of trial production issued by M/s Krishna Trading Company on 4.12. 1981 is baseless and untrue. In joint inquiry report it is also clear that your unit has purchased from M/s Krishna Trading Company Kupla etc. of Rs.69	000 on 21.5.81	 whereas M/s Krishna Trading Company have declared sale of Rs. 13	035 only in 198 1 82 as per file of the Sales Tax Department. In the joint inquiry Report it is also mentioned that your unit got electricity on 21.11.1982 and on inquiry the unit informed that the trial production was done with the help of a generator. Your unit could not give any certificate for purchasing or hiring a generator and now it has declared to have hired the generator for 4 5 hours from M/s Mitra Industries Deoband. In the inquiry report it is also made clear that a unit cannot use a generator of other unit without prior permission of the electricity depart ment. xx xx xx On the above discussion it is concluded that the unit in question wants to (get) illegal benefit of exemption from sales tax by produc ing wrong facts. The trial production done by M/s. Krishna Trading Company on 4.12. 1981 is proved to have been done by the unit in ques tion itself and not by them. Thus	 the unit was established before l. 10.82. The unit established before 1.10.82 is therefore not entitled to exemption from sales tax. " 279 In our opinion	 the rejection of the assessee 's applica tion proceeds on a total misconception of the facts. The conclusion of the Division Level Committee is that produc tion was commenced by the appellant on 4.12.81 but this conclusion is based on no evidence. It is true that the appellant produced a certificate showing that some produc tion was done on 4.12. 1981 but the appellant 's case was that this was merely a trial production. It is not quite clear whether the District Level Committee completely doubts any trial production having taken place at all	 or whether its conclusion is that there was a trial production	 on 4.12.1981. If its conclusion is the former one	 it does not affect the appellant 's claim. Assuming that the Committee has come to the conclusion that the production on 4.12.81 was conducted not by M/s Krishna Trading Company but by the appellant itself	 the fact still remains that what had happened on that date was only trial production. The mere fact that a certificate by M/s Krishna Trading is disbe lieved cannot lead to the conclusion that the assessee had produced goods on 4.12.81. If one is to go by the definition contained in the explanation to section 4A for determining when the production started	 one has to concentrate on the date of purchase of raw materials or on the date on which the electricity was brought into use for commercial produc tion. The appellant 's claim that it had manufactured goods by 30.9.1984 is not denied. Production had	 therefore	 commenced before 31.3. There is no suggestion by the Department or the Committee	 and there is no material to show that the appellant had purchased raw materials suffi cient to carry out normal commercial production at any time prior to 1.10.82. It is an admitted fact that the assessee was able to obtain electricity for use for commercial pro duction only in November 1982. This lends support to the appellant 's contention that the production could not have been effected by the assessee prior to that date. In fact	 this is a point on which emphasis is laid in the order dated 27.10.1987. That being so	 there is no iota of evidence or material on the basis of which the appellant 's claim that it had started production in December 1982 could have been rejected. On the other hand	 the recommendation and endorse ment of the General Manager	 District Industries Centre	 which has been extracted earlier	 also supports the appel lant 's contention that it had started production on 4.12.1982 and this report was given after verifying the actual position on the spot. For the reasons above mentioned we are of the opinion that the denial of the exemption to the appellant under the notification dated 30.9.82 was not justified. The rejection of the appellant 's application in this regard is quashed and the appellant is declared entitled to the 280 exemption in terms of the notification. We should not be understood	 however	 to have expressed any opinion as to the amount of exemption available to the appellant under the notification. That will be a matter for consideration of the authorities in respect of each of the years concerned in respect of which the claim is made for exemption. The appeal stands allowed	 but in the circumstances	 we make no order as to costs. G.N. Appeal allowed.

The State Government in pursuance of Section 4A of the Act formulated and published a scheme for grant of exemption from Sales Tax	 to encourage capital investment and estab lishment of new industrial units which were established during the period from 1.10.1982 to 31.3.1985 and producing certain categories of goods. Though the scheme referred to units established	 it actually referred to the date of commencement of production. The appellant	 a concern engaged in the business of electric motors	 pump sets and their parts	 applied for the exemption. The appellant claimed that the date of actual commencement of use of electricity for production was 4th December	 1982 and that was the actual date of commencement of production. The same was endorsed by the General Manag ers	 District Industrial Centers and the Assistant Engineer concerned	 while recommending the application. But the difficulty had arisen on account of a certificate attached to the application for exemption. It was given by a firm which had entered into an agreement with the appellant for supply of machines and installation. According to the cer tificate	 trial production commenced on 4.12.1981. The Division Level Committee	 before which the application was filed	 rejected it	 saying that the date of trial production was really the date of commencement of production and it fell prior to 1.10.1982. The appellant preferred a review claiming that trial production could not be treated as commencement of actual production. The review application was also dismissed and it was held that the unit was estab lished before 1.10.1982 and	 therefore	 was not entitled to the exemption. Thereafter	 the appellant filed a writ peti tion before the High Court. It was rejected. 274 Claiming that it is entitled to the exemption	 the appellant has preferred this appeal	 by special leave. Allowing the appeal	 HELD: 1.1 The appellant is entitled to the exemption	 in terms of the notification dated 30.9.1982. The rejection of the application for exemption proceeds on a total misconcep tion of facts. The conclusion that production was commenced on 4.12.1981 is not based on any evidence. It does not affect the appellant 's claim even if there was any doubt about the trial production having taken place at all. Wheth er trial was conducted by the other firm or the appellant itself	 the fact remains that only trial production took place on 4.12.1981. The mere fact that the certificate is disbelieved cannot lead to the conclusion that the appellant had produced the goods on 4.12.1981. [279A D] 1.2 To go by Section 4A of the Act to determine the date of commencement of production	 the date of purchase of raw material or the date on which electricity was brought into use would be relevant. The appellant 's claim that it had manufactured goods by 30.9.1984 is not denied. Production had	 therefore	 commenced before 31.3.1985. There is no suggestion by the Department or the Committee	 and there is no material to show that the appellant had purchased raw materials sufficient to carry out normal commercial produc tion at any time prior to 1.10.1982. It is an admitted fact that the assessee was able to obtain electricity for use for commercial production only in November 1982. This lends support to the appellant 's contention that the production could not have been effected by the assessee prior to that date. In fact	 this is a point on which emphasis is laid. That being so	 there is no iota of evidence or material on the basis of which the appellant 's claim that it had started production in December 1982 could have been rejected. On the other hand	 the recommendation and endorsement of the Gener al Manager	 District Industries Centre also supports the appellant 's contention that it had started production on 4.12.1982 and this report was given after verifying the actual position on the spot. [279D G] 2. As regards the amount of exemption available to the appellant	 it is a matter for consideration of the authori ties in respect of each of the years concerned in respect of which the claim is made for exemption. [280B]