SC Cancels Chhota Rajan's Bail in 2001 Jaya Shetty Murder Case  ||  NCLAT: Workmen Can Claim Dues Post-Layoff If They Worked After Corporate Debtor's Notice Issuance  ||  NCLAT: Debt Can be Proved Through Any Documentary Evidence, No Written Contract Needed.  ||  Madras HC: Railway Authorities Can't Deboard Valid-Ticket Passengers Heading to Protest  ||  Delhi HC: Women’s Entry into Army Corps Can’t be Restricted; Vacant Male Posts Must be Open to Women  ||  Delhi HC: Pressuring Husband to Cut Ties With His Family Amounts to Cruelty; Ground For Divorce  ||  Bombay HC: Magistrate Need Not Pass Preliminary Order U/S 145 CrOC If HC or SC Directs Inquiry  ||  Delhi HC Allows Woman to Terminate 22-Week Pregnancy from False Promise of Marriage  ||  Supreme Court: Reasons Omitted In an Order May be Considered In Specific Circumstances  ||  SC: Execution of Arbitral Award Cannot be Stalled Just Because Section 37 Appeal is Pending    

AMD Industries Limited (Earlier known as Ashoka Metal Decor Pvt. Ltd.) vs. Commissioner of Trade Tax, Lucknow and Ors. - (Supreme Court) (09 Jan 2023)

Exemption provisions are to be read as they are and to be construed literally and should be given a literal meaning

MANU/SC/0017/2023

Other Taxes

The manufacturer – original revisionist has preferred the present appeal feeling aggrieved with the impugned judgment and order passed by the High Court by which the High Court has confirmed the order passed by the Trade Tax Tribunal, and the Assessing Officer holding that for the goods manufactured, the Appellant is not entitled to the exemption under Section 4-A (5) of the U.P. Trade Tax Act,

In the case of “expansion or modernization”, the exemption shall be available, if there is an additional production as a result of such modernization or expansion. In the present case, present Court is concerned with the case of “diversification”. Therefore, the goods manufactured after diversification must be different goods from the goods manufactured before such diversification. As per the settled position of law, in case of an exemption notification/exemption provision, the same is required to be construed literally and the person claiming the exemption must satisfy all the conditions of exemption provision.

In the present case, the Appellant was manufacturing / producing “Spun Line Crown Cork” used for sealing the glass bottles. With the use of modern technologies, now the Appellant is manufacturing “Double Lip Dry Blend Crowns”, which is also used for sealing the glass bottles. The earlier product being manufactured by the Appellant was used for sealing glass bottles and subsequently the additional product produced with the use of modern technology is also being used for the same purpose namely, “sealing glass bottles”. Therefore, the same cannot be said to be manufacturing of goods different from being manufactured before such diversification.

As per the settled proposition of law, the exemption provisions are to be read as they are and to be construed literally and should be given a literal meaning. Giving the literal meaning to the exemption provision namely, Section 4-A, it cannot be said that the Appellant is entitled to the exemption as claimed.

When the provisions of the Act unequivocally provides that the “diversification” can be considered only in a case where “goods of different nature” are produced, and only then the exemption shall be available. The goods manufactured on “diversification” must be a “different”, “distinct” and a “separate” good in nature. In the present case, the goods manufactured on use of advance and/or modern technology cannot be said to be a different commercial activity. The High Court has not committed any error in refusing to grant exemption to the appellant. Appeal dismissed.

Tags : GOODS   EXEMPTION   ENTITLEMENT  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved